The New Year’s economic challenges and labor demands

Published by reposted only Date posted on January 23, 2011

THE 36 million Filipino workers whose quality of life did not improve in 2010 need to face another set of economic challenges this year—a triple whammy of price increases that would further lower their living standards if the necessary interventions will not be put in place on time by the government and social partners.

As the country was celebrating the New Year on January 1, the first whammy hit. Toll in the South Luzon Expressway (Slex), North Luzon Expressway (Nlex) and Subic-Clark-Tarlac Expressway (SCTEx) rose by 300 percent, 11 percent and 43 percent, respectively. The toll-rates hike will result in higher transportation costs and subsequent increases in the prices of commodities which have already risen by 3 percent in December.

Immediately after that, the second whammy struck. Due to the increasing oil tariffs, operators of public utilities such as buses, jeeps and taxis have also filed fare-increase petitions before the Land Transportation Franchising and Regulatory Board (LTFRB). The government body recently allowed taxis to jack up their flag-down rate from P30 to P40, and to charge P3.50 for every 250 meters from the previous rate of P2.50. Soon, buses and jeeps may also be given the go-ahead to raise their fares as the prices of petroleum are expected to further skyrocket this year.

And the third whammy will batter the hapless commuters in March. This month, the Department of Transportation and Communications (DOTC), with the approval of Malacañang, granted a 300-percent fare increase for the Light Rail Transit (LRT 1 & 2) and Metro Rail Transit (MRT). The rate hike will take effect on March 1. Around 80 percent of the 1.2 million commuters who ride the rail system daily are struggling workers.

The killing blow that may be the last straw that will break the camel’s back will come in the middle of the year, when the transitional supply contracts of the privatized assets of the National Power Corp. (NPC) will expire. This would mean that power rates in the distribution-systems services by these assets will soon experience price spikes. This would result in further increases of electricity tariffs as private investors simply pass on to consumers the additional costs they will incur in generating power.

The Trade Union Congress Party (TUCP), the biggest workers sectoral party in the Philippines, is apprehensive over the turn of events that would clearly make the poor workers poorer, as the cost of their daily maintenance will continue to rise without a corresponding augmentation in their incomes.

The daily minimum wage in Metro Manila is only P404—way, way below the approximately P900 ideal daily “living wage” that would really give a worker and his family a shot at decent life.

Aside from very low wages, our workers have to face the threat of job insecurity. The practice of labor contractualization in the country which violates the fundamental rights of workers, including security of tenure, is becoming more massive and cruel.

In lieu of these serious challenges to our workers, the TUCP presents its demands on behalf of workers.

1 Review wage orders. First, the labor party calls on the NCR Regional Tripartite Wages and Productivity Board (NCR-RTWPB) and the National Wages and Productivity Commission to review the existing wage orders and promptly remedy the highly iniquitous situation where labor productivity has been ascending while real wages are fast eroding, leaving our hapless workers more destitute and desperate.

We support the TUCP’s plan to file a P55-across-the-board wage-hike petition in the NCR just to recover the eroded purchasing power of workers’ income. There had been economic growth, fueled by workers productivity, but there was no real increase in wages and dramatic improvement in the quality of life of workers and their families. We condemn the dismissive statements of the Labor secretary regarding the proposed wage hikes of labor sector. The so-called one-year ban does not apply in the present situation as there are supervening events that could warrant the granting of a new round of wage increase. We assert that the workers need to have enough income not only to survive but also to flourish.

Second, TUCP denounces and demands that the practices of contractualization and labor-only contracting must be stopped because they mean retrenchment of regular workers, union busting, job insecurity and the increasing exploitation of working people.

Flexibilization of labor is at the very least counterproductive, and inhuman at very worst.  Contractual workers are oftentimes unhappy with low pay, no benefits and poor working conditions. And unhappy workers will have a hard time to be productive in their work. In the long run, the quality of their service will decline and with that the profits of the company. It is inhuman because contractual workers are vulnerable to abuses and oppression. Give Filipino world-class working standards and they will produce products and goods of world quality.

2 Ban labor-only contracting. We therefore are calling for the prohibition and criminalization of labor-only contracting and the strengthening of the security of tenure of workers. Presently, 80 percent to 90 percent of employed workers do not have job security. They are either contractual, casual, probationary, “on-the-job-trainee”, and other categories under the so-called flexible work arrangements.

TUCP asserts that employers cannot and should not avoid their responsibilities under labor laws using the veil of contractualization and labor-only contracting.  The workers’ rights to decent wages, self-organization, collectively bargain, security of tenure, legally mandated benefits among others must be upheld at all times. Contractualization and labor-only contracting also do not encourage employers to provide incentives for workers to enhance their competencies. Under contractual arrangements, workers development is out of the equation. And they could not have their just share from the profits of their companies.

Contractual employees cannot expect to have substantive improvement in the quality of their lives, including their families. We want to stop these antiworkers practices now!

TUCP also believes that Secretary Baldoz’s wrong decision on the PAL-Palea case will further contribute to the gradual reversal of 40 years of progressive social and labor legislation in the country that were paid for by workers’ tears, sweat and blood.

We are worried that the case of PAL-Palea will be replicated in other corporations. Other local and foreign capitalists will have an imprimatur to practice contractualization as they also would want to maximize the returns for their investments to the detriment of workers.

TUCP filed House Bills 891 and 892 to criminalize labor-only contracting and to strengthen the workers’ right to security of tenure, respectively. These bills were later consolidated with other related bills in the House Committee on Labor and Employment. The approved committee report will be calendared for second reading, plenary debates and amendments.

TUCP cannot allow labor to become a whipping boy even with the blessings of high government functionaries. TUCP will not consent to the illegal, immoral and unconstitutional practice of contractualization and other antilabor schemes to continue unabated.

3 Pass Magna Carta of the Poor bill. TUCP as the chairman of the House Committee on Poverty Alleviation enjoins all the sectors of society to support the enactment of the pending Magna Carta of the Poor Bill. It aims to strengthen the existing antipoverty programs, such as the Conditional Cash Transfer Program of the government. We believe that this piece of legislation will help reduce poverty in our country.

4 Go slow on those PPPs. We urge the government to move with restraint in pursuing public-private partnership (PPP) arrangements in infrastructure development. The history of PPPs in the Philippines has been rife with one-sided relationships. The private corporations end up earning huge revenues and government ends up holding the bag. Ultimately, it is the worker who is the first victim of PPP, and the Filipino taxpayer or the consumer who ends up subsidizing the enormous earnings of the private corporations.

TUCP is apprehensive over government moves to further PPP without appropriate safeguards to protect workers and consumers, especially in the power and water sectors.

PPP is usually the path of least resistance taken up by many cash-strapped governments. PPP is viewed as quick-fix solution to set up needed infrastructure. And yet PPP in the water and power sectors in the Philippines has resulted in particularly problematic high tariffs, allegations of regulatory capture, and clear and visible rent-seeking through take-or-pay contracts.  We still pay for electricity that was never generated. It is an insidious form of capitalism without risk!

The privatization of both Metropolitan Waterworks and Sewerage System (MWSS) and National Power Corp. are both “failed privatizations whose first victims are their own retrenched workers, with the hapless consumers left afterward paying the skyrocketing water and power rates.

TUCP calls on the PPP promoters to bring workers and consumers to the table to discuss best practices. There must be workers and consumers representation in the Energy Regulatory Commission (ERC), MWSS, Toll Regulatory Board (TRB), Local Water Utilities Administration (LWUA) and other regulatory bodies to counter the excesses of the private sector and prevent regulatory capture.

Even with PPP, competition never set in the power sector as Philippine power rates remain second only to Japan. The complaints about the huge bonuses being enjoyed by MWSS staff may be directly related to the fact that the entire MWSS budget is answered for through the regulatory and concession fees paid by Maynilad and Manila Water. It is of little wonder that no rate increase petition of Maynilad or Manila Water has ever been declined by the regulator which is MWSS.

It is time to undertake a multistakeholder review of the Philippine PPP experience. Our leaders in government should move with caution and first seek to identify best practices, what works and what doesn’t. They should consult with workers and consumers first. TUCP is dismayed that Cabinet members are falling all over themselves in a rush to admit PPP projects. All over the world, labor’s experience is that governments that are trying to sell their assets fast are also trying to sell their assets cheap. The technocrats and economists will say that it is all about efficiency and what is best. But we remind the government that what is best for the fisherman is not necessarily the best for the fish. So what are we in the PPP equation? The fisherman?  Or the fish?”

Labor is a partner in any industry, and it should be accorded value and what is due them. The government has been making a flagship in  applying the concept of tripartism but what has been apparent in our PPP experience is that workers’ well-being has been sold cheap and demeaned as a desperate move to create an environment conducive for business and spur economic progress.

TUCP reminds the government that the core labor standards should be observed, especially the security of tenure of workers in the power and water sectors in the provinces. In the matter of road construction and other infrastructure, TUCP insists on strong government oversight on observance of occupational safety and health, decent wages and benefits, including compensation packages for disability and work-related ailments.

TUCP is advocating the need for a strengthened antimonopoly and anticartel law with increased penalties; the reclassification of the independent power producers generating plants to once more be treated as a regulated utility and therefore subject to a rate of return ceiling; the amendment of the Epira law to absolutely ban all forms of cross-ownership in the electricity sector to prevent sweetheart deals pricing; the registration of all electric cooperatives with the Cooperatives Development Authority to ensure genuine consumer ownership; and the strengthening of our regulatory agencies.

TUCP has long-advocated for consumer and worker representation in the regulatory agencies such as the ERC, the MWSS and National Water Resources Board, the LWUA Board, the Department of Trade and Industry, the TRB and the Cooperative Development Authority.

There has been an allegation that consumers’ representative would politicize regulatory agencies. This is not true. All the consumers want are reliable, affordable, reasonably priced and efficient products and services for all.

We will fight tooth and nail to protect the basic rights of workers. We will do everything to safeguard their human dignity. All must sacrifice, all must bear the burden, not only the already impoverished workers.  The richer sectors of society must give their just share as they have benefited much from past economic developments.  Rational sharing of costs and benefits among the social partners would diffuse social tensions, stabilize our polity and help achieve sustainable and equitable development in our country.

*Mr. Mendoza represents the labor party-list TUCP, or Trade Union Congress of the Philippines, in Congress.

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