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1MAGNA CARTA OF WORKERS IN THE INFORMAL ECONOMY

Philippine Commission on Women Policy Brief No. 1

Extending Social Protection for Women in the Informal Sector: ENACTING A MAGNA CARTA OF WORKERS IN THE INFORMAL ECONOMY

This policy brief provides the rationale and recommendations for upholding the rights of workers in the informal economy,

majority of

whom

are

women,

through

the

enactment

of

a Magna

Carta

of

Workers

in

the

Informal

Economy.

WHAT IS THE ISSUE?

Informal employment in the Philippines has been a

way of life for many Filipinos. Many workers who lose

their jobs tend to find refuge in the informal economy,

which provides them a means of economic support.

For lack of productive employment opportunities, the

jobseekers are forced to seek short‐term or temporary

employment or create employment for themselves for

survival or income augmentation.1 To some extent,

this condition must have helped keep the economy

resilient as

laid

‐off/unemployed

workers

easily

shift

to

small‐scale household production to earn a living.2 The

National Statistics Office's 2013 Labor Force Survey

results show that workers in the informal economy

reached 16.088 million, or 42.53 percent of the

country’s working population of 37.819 million

workers. 3

The growth of the informal employment can be

attributed to the large portion that has come from

women in self ‐employment. The feminization of

poverty and

discrimination

mean

that

the

most

vulnerable and marginalized groups tend to end up in

the informal economy. Women are more likely to

move in and out of the labor force because they are

more likely to be required to balance the demands of

domestic and child rearing activities with their income

generating activities.4 Given the role to balance

productive and reproductive work, women decide to

tolerate small income, poor working environment, and

even exploitative work arrangements, normally

experienced while working in the informal economy.

1 Pastrana, Cleofe S. The Informal Sector and Non‐Regular

Employment in the Philippines, 2009

2 Domingo, Estrella V. Measuring the Non‐Observed Economy

(NOE): The Philippines experience, 2004

3 National Statistics Office. Labor Force Survey, 2013

4 Women’s Legal Bureau. Research in the Consistency of National

Legislation on Women and Children with Major International

Human Rights Covenants Signed by the Philippine Government,

2008

WHY IS THE ISSUE IMPORTANT?

Contrary to the usual notion, the workers in the

informal economy are productive and contribute a

significant share in the country’s economy. The

informal sector in 2006 accounted for 61 percent of

the Gross Domestic Product (GDP) of the Philippines,

representing almost P 4 billion income.5

However, workers in the informal sector do not

receive sufficient social protection and benefits, and

their invisibility in the country’s economy causes lack

of access

to

economic

opportunities.

Specifically,

women in the informal economy are vulnerable to

various forms of exploitation. They are at high risk in

times of illness, disability, work injury, maternity,

unemployment and old age.

Most women in the informal economy are also

underserved by government financial institutions,

mainly because the cost of delivery is higher than the

capacity of women to meet the stringent

requirements. The lack of access to productive

resources is

often

characterized

by

poor

infrastructure

as communication facilities, transport and poor

farm/factory to market roads.

Women are also exposed to working environment not

protected by health and safety standards. Poor

working conditions make them vulnerable to

occupational health and safety hazards.

The lack of representation in governance and decision

making structures is also a pressing issue that women

in the informal economy face. They are usually

excluded or underrepresented in the decision‐making

processes, and they lack opportunities to have a voice

in crafting policies or programs. While NGOs such as

Alliance for Workers in the Informal Economy or

5 National Statistical Coordination Board (2006). Informal

Employment and Informal Sector Data Collection: Strategy, Tool

and Advocacy, 2007

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PCW Policy Brief

No. 1

August

2013

2 MAGNA CARTA OF WORKERS IN THE INFORMAL ECONOMY

Magna Carta for Informal Sector Alliance advocate for

the needs of the informal sector, the specific needs of

women in this sector has to be represented through

policy interventions.

WHAT ARE THE EXISTING LAWS OR POLICYISSUANCES RELATED TO THE ISSUE?

The 1987 Philippine Constitution mandates the State

to ensure the welfare of all workers. Article II, Section

9 declares that “The State shall promote a just and

dynamic social order that will ensure the prosperity

and independence of the nation and free the people

from poverty through policies that provide adequate

social services, promote full employment, a rising

standard of living, and an improved quality of life for

all.”

R.A. 8425 or the Social Reform and Poverty Alleviation

Act is the first national legislation to recognize the

informal sector, through its inclusion as one of the

basic sectors. It defines workers in the informal sector

as “poor individuals who operate businesses that are

very small in scale and are not registered with any

national government agency, and to the workers in

such enterprises who sell their services in exchange for

subsistence level wages or other forms of

compensation.”

Adopting the definitions formulated by the 15th

International Conference of Labor Statisticians, the

Delhi Group and the ILO‐UNDP Project, the National

Statistics Coordination Board, through Resolution No.

15 Series of 2002, released the official definition of the

informal sector:

“The informal sector consists of ‘units’ engaged

in the production of goods and services with the

primary objective of generating employment and

incomes

to

the

persons

concerned

in

order

to

earn a living. These units typically operate at a

low level of organization, with little or no

division between labour and capital as factors of

production. It consists of household

unincorporated enterprises that are market and

non‐market producers of goods as well as

market producers of services. Labor relations,

where they exist, are based on casual

employment, kinship or personal and social

relations rather than formal or contractual

arrangements.6”

R.A. 10606 or the National Health Insurance Act of

2013 ensures Philhealth coverage for all Filipinos,

including members of the informal economy. Section 5

of the said Act mandates the enrolment of members in

the informal economy to avail of health benefits with

the assistance of the financial arrangements provided

by Philhealth. The law also allocated a seat in the

Board of Directors of Philhealth for a permanent

representative from members in the informal

economy.

WHAT ARE THE EXPERIENCES OF OTHERCOUNTRIES IN ADDRESSING THE ISSUE?

In India, the National Commission on Labour has been

working on developing, implementing and enforcing

national labor legislation for the informal sector. The

Commission decided to recognize informal workers

and to formulate and umbrella legislation for the

sector.7

A recent example from Kenya is that the Nairobi City

Council (NCC)

has

started

to

register

all

street

hawkers

in Nairobi and whether they have paid their fees to the

NCC. The major achievement of this registration is that

these traders have somewhere to turn if they are

harassed by the NCC or other civil servants. 8

In 1996, the Shanghai Municipal Government in China

initiated a scheme of “informal labour organisations”

comprised by individual ventures or small firms. The

Municipal Government has issued special protective

measures and policies such as social insurance,

training opportunities

for

employers

and

employees

of

the informal economy, preferential tax policies, risk

insurance and credit support with the City

6 http://www.nscb.gov.ph/resolutions/2002/15_1.asp

7 WIEGO. A Policy Response to the Informal Economy, 2001

8 Becker, Kristina F. The Informal Economy, 2004

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Employment Promotion Fund as guarantor as well as a

provider of voluntary support from experts. 9 WHAT ARE THE CONSIDERATIONS INADDRESSING THIS ISSUE IN THE COUNTRY?

Promoting women’s rights and gender equalityGender plays a key role in the informal economy,

which absorbs women who have been among the first

to be displaced from formal work, especially in the

garments industry, as globalization progressed.10

Inequality between men and also women

encompasses human capital and economic

opportunities.

The underlying issue on why more women are in the

informal sector still lies on the unequal access of men

and

women

to

opportunities

and

resources.

In

our

culture, the role of a woman to be the “ilaw ng

tahanan” (light of the household) reflects how she can

be sacrificial to fulfill her multiple burdens and settle

for low and unstable earnings just to ensure the

welfare of the family. Labor segmentation is also found

in the informal economy, as women are mostly home

workers or unpaid family workers while men are

informal wage workers or employers. 11

Because of the existing gender gap in wage and

benefits of workers in the informal economy, it is

necessary to

address

it

by

ensuring

a legislation

that

will provide equal access to social protection for both

men and women.

Responding to International Commitments

The enactment of a Magna Carta of Workers in the

Informal Economy would be consistent with the

International Convention on Economic, Social and

Cultural Rights (ICESCR) which the Philippine

government ratified in 1974. Specifically, Article 9 of

the ICESCR states that “The State Parties to the

9 Howell J., Good Practice Study in Shanghai on Employment

Services for the Informal Economy, 2002

10 Ofreneo, Rosalinda P. Economic and Reproductive Justice in the

Context of Women in the Informal Economy, 2010. 11Chen, Martha et.al. Mainstreaming Informal Employment and

Gender in Poverty Reduction – A Handbook for Policy‐makers and

Other Stakeholders, 2004

present Covenant recognize the right of everyone to

social security, including social insurance.”

It is also in consonance with the Millennium

Development Goal of eradicating extreme poverty and

hunger, one target of which is to achieve full and

productive employment and decent work for all,

including women and young people by 2015.

Alignment with National Priorities

Upholding the rights of workers in the informal

economy is in consonance with the Philippine Plan for

Gender‐Responsive Development (1995‐2025) which

identified (as a strategy to address the issues in the

informal sector) the pursuance of strict and effective

enforcement of new laws covering the informal sector

to improve the working conditions of female home

workers and to uplift their living conditions.

It is also in pursuance with the government’s 16‐point

agenda which include item 13, “ from a lack of concern

for gender disparities and shortfall, to the promotion of

equal gender opportunity in all spheres of public

policies and programs.” and item 2 “From a

government that merely conjures economic growth

statistics that our people know to be unreal to a

government that prioritizes jobs that empower the

people and provide them with opportunities to rise

above poverty.”

The enactment of a Magna Carta of Workers in the

Informal Economy was also identified as priority

legislative measure as in the Social Development

Chapter of the Philippine Development Plan.

POLICY RECOMMENDATION

The big majority of workers in the informal sector who

are mostly women are not covered by the Labor Code

and other legislation that could protect their rights.

The Philippine Commission on Women (PCW) pushes

for the enactment of a law that provides for the

protection and

empowerment

of

the

Filipino

women

in

the informal sector. PCW advocates for the passage of

the Magna Carta of Workers in the Informal Economy

(MACWIE) that:

1. Promotes the total well‐being of all

workers in the informal economy and

ensures their human dignity, economic

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PCW Policy Brief

No. 1

August

2013

4 MAGNA CARTA OF WORKERS IN THE INFORMAL ECONOMY

advancement and access to justice by

providing timely services including social,

political, economic and legal;

2. Recognizes, promotes, protects and fulfills

the

rights

of

every

worker

in

the

informal

sector including the right to self ‐

organization, decent work, just and

humane working conditions, and access to

social protection;

3. Recognizes the roles and contributions of

workers in the informal economy and

make them visible in the national and local

statistics;

4. Develops and enhances their

entrepreneurial skills

and

capabilities

to

become more productive and self ‐reliant

citizens thereby ensuring participation in

mainstream economic activities;

5. Promotes gender equity and equality and

protect women workers in the informal

economy against gender‐based

discrimination, exploitation and abuse; to

advance women’s social, economic,

political, and reproductive rights; and

improve their access to social protection

and participation

in

decision

‐making

bodies;

The MACWIE can be a comprehensive legislation that

addresses the needs of the workers in the informal

economy, and ensures that they enjoy the rights that

workers in the formal economy have.

MACWIE recognizes

the

need

to

promote

gender

equity and equality and the protection of women

workers in the informal economy against gender‐

based discrimination. It responds to the needs and

issues of women in the informal economy as it

provides financial assistance to women‐ led livelihood

initiatives; enhances participation of women in

decision‐making processes; develops sex‐

disaggregated database; and provides women‐friendly

policies and standards. CONCLUSION

Women work

two

‐thirds

of

the

world’s

working

hours,

produce half of the world’s food, yet earn only 10

percent of the world’s income and own less than 1

percent of the world’s property.12 Addressing the

conditions of women in the informal economy

contributes to poverty reduction, improving lives of a

large portion of the working population in the

Philippines. When living and working conditions of

female informal workers improve, so does their

productivity, which leads to increased income,

contributes to overall economic growth, and reduces

poverty in

the

long

term.

13

It

is

hoped

that

our

legislators will finally pass a law that will promote,

protect and uphold the rights of informal sector

workers through the Magna Carta of Workers in the

Informal Economy.

12

Message from Navi Pillay, UN High Commissioner for Human

Rights, Human Rights Day 2009

13

Bertulfo, Lota. Women and the informal economy, 2011

PCW Policy Briefs aim to stimulate informed discourse and guide policy actions on issues concerning the

empowerment of women and promotion of gender equality.

OFFICE OF THE PRESIDENT

Philippine Commission on Women 1145

J.

P.

Laurel

Street,

San

Miguel,

1005

Manila

http://www.pcw.gov.ph | [email protected] | +632 735‐8918

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