Communist Party of the Philippines
2 May 1998 - Brussels
www.icsbrussels.org , ics[at]icsbrussels.org
Starting in the middle of 1997, the Ramos façade of Philippine economic progress was finally unmasked. A sharp devaluation of the local currency (which currently stands at around P38 to a dollar from P25:$l last July 1997) preceded a rise in interest rates, bankruptcies of small and medium enterprises, unemployment, a sharp rise in the costs of living and a general deterioration of the standard of living of the Filipino workers and peasants.
The current economic crisis is the result of the policies of liberalisation, deregulation and privatisation imposed by the U.S. imperialist-led International Monetary Fund (IMF), World Trade organisation and other such entities. These policies exacerbated the neo-colonial orientation of the Philippine economy enabling monopoly capitalist corporations to accumulate even greater superprofits.
The prevailing semicolonial and semifeudal conditions in the Philippines allow foreign monopoly capitalists to wantonly exploit the Filipino workers and people in general. Through their dominance, they impede domestic industrialisation. They take advantage of this non-industrialised state by promoting the production of cheap agricultural, mineral and other raw materials for export and setting-up low value-added production lines which take advantage of the cheap costs of Philippine labour.
The Philippine industrial working class remains small compared to the peasantry owing to the small industrial base. The industrial working class is exploited principally by foreign monopoly capitalists and their local big bourgeois counterparts. They are extremely exploited due to the terrible prevailing wage relations reinforced by the policies and laws which are extremely skewed against the interests working class.
The international crisis of monopoly capitalism forces the imperialists to intensify its exploitation of the working class in order for them to accumulate even greater profits. The U.S.-Ramos regime has broken down all pretensions at economic freedom to allow foreign monopoly corporations to wantonly export the natural and human resources of the Philippines. To make the Philippines attractive to foreign big capitalist investors, the regime promotes laws and policies violating the workers, fundamental political and economic rights.
Impact of intensification of imperialist exploitation and crisis on Filipino workers
1. Since '85,-90 percent of commodities have large imported content, a devaluation of the currency leads to increase in the prices of daily necessities. As a result, the value of labour power of Filipino workers has increased. In the Philippines, there is chronic inflation that leads to a continuing rise in the value of labour power. By the end of 1997, the daily cost of living for an average family has reached P387.82. By January 1998, the daily cost of living has reached P410.00, and around P430 by April 1998.
2. The price of labour power, or wages, does not coincide with the value of labour power. The legal minimum wage for the national capital region is set at P195 a day which is not even half of the daily cost of living. This has resulted in the drastic deterioration in the standard of living of Filipino workers and their families, especially in terms of nutrition and daily food intake, shelter and health care. The inability to cope with the increasing costs of living is the greatest impetus which spur the workers to vigorously struggle for a P100 increase in the daily minimum wage which is essentially a struggle to prevent the fall of wages.
3. The devaluation of the local currency is advantageous to the foreign monopoly capitalists. Using the same US$7.8 which before the currency devaluation could command 8 hours of labour power, they could now command more than 12 hours of labour-power or an additional 4.15 hours of surplus labour after the currency was devalued by more than 50%. The devaluation of the currency, has therefore served to increase the surplus value and profits being pocketed by the big foreign capitalists.
4. Because there is no substantial industrial base in the Philippines, there is a permanently abnormal high rate of unemployment. The dominance of foreign big corporations impede the growth of and debilitate local industry. Currently, more than 20% of the Philippine labour force are unemployed and more than 50% are underemployed. The entry of foreign capital does not help ease unemployment. From January to March 1997, there was a decrease of 21% in new employment despite a 130% in foreign investments.
5. According to government statistics, the unemployment rate is less than 8%, even lower than some industrialised countries in Europe. Government deflates the number of unemployed by (a) not counting as part of the labour force women home-makers and others who are practically part of the labour force but who are not considered to be actively seeking employment; (b) counting as employed even those who are only temporarily employed at the time of the survey; (c) counting as employed those who are self-employed (such as small-store owners) who for practical intents are unemployed.
6. Unemployment is further worsened by the recent economic and financial crisis. In the first quarter of 1998 alone, 43,712 workers were laid-off according to a government study. In 1996, according to a study by the Employers Confederation of the Philippines (ECOP), 600 garments and textile factories closed down. 3,000 workers in the manufacturing sector were laid-off in 1996.
7. Due to the recent sharp currency devaluation, enterprises (especially small and medium enterprises) were burdened by the sudden increase in the value of their loans and regular principal payments. To recoup their losses, banks are raising interest rates on loans. As a result, a big number of such small and medium enterprises are declaring bankruptcies and folding-up.
8. The abnormally high unemployment rate weighs down on the wages of the Filipino workers. This is starkly exhibited by the system of placement or employment agencies wherein several agents (who act in behalf of workers seeking employment) compete by making the lowest bid (lowest wage) to employers. As a result, a great number of employers do not even provide minimum wages. According to a government study, a third of all companies violate the minimum wage law. The figures may be actually higher. For instance, 65% of security agencies pay wages below the minimum.
9. Various forms of 'flexible' labour further oppress the Filipino workers. These new systems of employment are practised widely by employers, especially by big foreign capitalists. Among the most widespread are casualisation and contractualisation (either direct hiring of part-time workers or indirect hiring through the mediation of placement agencies); out-jobbing (usually by garment factories where certain portions of the assembly-line, especially labour-intensive hand production, are typically subcontracted to agents who then hires household based workers to do the specific job); and flexible work schedules such as job rotations to reduce expenses for overtime pay and increase productivity per worker. These various forms of 'flexible' labour denies or impedes the exercise of the most common rights accorded to regularly employed workers such as the right to organise and collective action. Moreover, such employment schemes enables the capitalists to press down on the wages of the workers and, thus, increase their profits.
According to a government study, since 1992 more than a third of employed workers (36.2%) are part-time workers. From 1988-1990, 40% of foreign-owned electronics firms hired temporary or casual workers.
Laws Textile which exports shirts mainly to the US for such clients as JC Penney has only 390 regular workers but 1,700 contractuals which are mostly semi-skilled new recruits from the government's technical training schools and are contracted for only three months at a time
Shoemart is one of the biggest department store chains in the Philippines. Shoemart has an estimated 20,000 employees, but only 1,731 rank and file employees are categorised as regular workers and protected by the collective bargaining agreement between the union and management. The rest are provided by recruitment agencies and are hired in contracts of less than six months
Manila Bay Hosiery is the main producer of socks. It once employed thousands of workers. It gradually reduced its regular workforce to only 257 at present while it increased the number of contractuals. The management set up an 'independent' shop inside the factory which employs workers on five-month contracts and to which the company subcontracts job orders.
Wyeth Philippines which changed its workweek schedule to what is called the 116-211 scheme where an employee works continuously for six days and gets two days off. As a result, the worker works on Saturdays and Sundays without overtime pay and is forced to work more than 40 hours per work week in violation of the Collective Bargaining Agreement (CBA).
10. The conditions in the workplace are ever deteriorating as the capitalists continuously cut-down on expenses and maximise profits. Even government studies show that 68.6% of factories inspected violate the General Labour Standards.
11. The government promotes the overseas deployment of Filipino workers as a solution to the perennial problem of unemployment. Since 1997, the queues of workers lining-up for overseas work have been growing longer exhibiting the desperation of hundreds of thousands for employment. However, lesser and lesser job opportunities are opening-up in the countries which formerly absorbed excess Philippine labour such as Saudi Arabia and other countries in the Gulf region, South Korea and Malaysia due to their own domestic crises and problems of unemployment. The more than 6 million overseas Filipino workers are essentially part of the unemployed which cannot be absorbed domestically.
12. The government's all-out privatisation drive causes further hardships on the workers. The sale of the entire Manila Waterworks and Sewerage System (MWSS), including all its assets and facilities last August 1 to the companies owned by the Ayala and Lopez families and their foreign partners (Bechtel Industries of the U.S., United Utilities of the U.K., Lyonnaise des Eaux of France) resulted in the laying-off of its 5,600 employees. Although most of these workers were rehired, they were taken in on a probationary basis. The workers, union was not recognised. The government is also planning to privatise the National Power Corporation (NAPOCOR) and hospitals such as the Lung Centre, Heart Centre, Kidney Centre, the Philippine Mental Hospital and the Philippine General Hospital.
Because of the intensified drive of the imperialists to accumulate even greater superprofits resulting in one of the worst economic crisis ever experienced in the Philippines, the standard of living of the Filipino workers has declined to extremely low levels.