LOW INFLATION NO REASON TO DENY WAGE HIKE

Various business groups have claimed that there is no basis to adjust the minimum wage because the erosion of the peso as of April 2007 was very insignificant. But it obscures the point that workers’ wages can no longer keep with high and rising prices, according to independent think-tank IBON Foundation.

While inflation in April did go down to 2% from 8% in the same period last year, this only indicated that the rate that prices were going up had slowed but prices of goods and services still remained high. In fact, the cost of living continues to escalate.

The National Wages and Productivity Board pegs the living wage for a family of six as of May 2007 at P786. But the daily minimum wage in Metro Manila is just P350 (P300 basi c p lus P50 cost of living allowance) or just over half of the family living wage.

Moreover, the low inflation rates are meaningless for the increasing number of Filipinos who are earning insufficient incomes or worse, do not have jobs. IBON estimates that close to a third of the labor force were either jobless or if employed, is still looking for more work.

The real value of workers’ wages had also seriously been eroded. The purchasing power of the peso in Metro Manila, or the amount of goods and services one peso can buy, had fallen to P0.70 in April from P0.72 last year. This means that over the past year, a worker has lost P2 of actual buying power for every P100 he or she earns. But between April 2005-2006 a worker actually lost P5 of actual buying power.

This loss in buying power underscores the urgency for a wage hike, particularly in light of workers’ increasing productivity. Workers’ productivity grew to P9,560 in the first quarter of 2007 from P9,265 in the same period last year. (end)

LIVELIHOOD WORSE TODAY, SAYS MOST FILIPINOS

More Filipinos feel that their livelihood worsened compared to the previous quarter, according to the latest results of the nationwide survey conducted by research group IBON Foundation.

The April 2008 nationwide survey shows that the number of Filipinos who said that their livelihood worsened grew significantly from 46.3% in January 2008 to 64.3% in April. Those who answered that their livelihood got better fell from 6.1% in January to 4.4% in the latest survey.

Asked if their family’s income is enough for their needs, 71% of the respondents said that it is not enough, an increase of almost 10 percentage points from January 2008.

The latest IBON survey was conducted across various sectors nationwide with 1,495 respondents from April 7 to 16. The survey used multi-stage probability sampling and has a margin of error of plus or minus three percent.

Below is the tabulation of results of respondents’ perception of their livelihood and income.

How is your livelihood today compared to a year ago?

	January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
Better	92	6.12	66	4.41
Same	686	45.64	449	30.03
Worse	696	46.31	962	64.35
Don’t know	21	1.40	14	0.94
No answer	8	0.53	4	0.27
Total	1,503	100.00	1,495	100.00

Is your family’s income enough for its needs?

January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
More than enough	13	0.86	25	1.67
Enough	543	36.13	380	25.42
Not Enough	928	61.74	1,069	71.51
Don’t know	13	0.86	19	1.27
No answer	6	0.40	2	0.13
Total	1,503	100.00	1,495	100.00

INCREASING NUMBER OF FILIPINOS SEE THEMSELVES POOR

The number of Filipinos who see themselves as poor increased in the first four months of the year, according to the results of the latest IBON nationwide survey.

The IBON April 2008 survey showed that 79.3% of 1,495 respondents thought of themselves as poor, an increase from 71.7% in January 2008.

The latest IBON survey was conducted across various sectors nationwide from April 7 to 16, 2008 using a multi-stage probability sampling scheme with a margin of error of plus or minus three percent.

Below is the tabulation of results of the respondents’ self-rated poverty

When you look at your situation today, do you think of yourself as poor?

	January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
Yes	1,077	71.66	1,186	79.33
No	269	17.90	236	15.79
Don’t Know	141	9.38	68	4.55
No answer	16	1.06	5	0.33
Total	1,503	100.00	1,495	100.00

The full results of the IBON April 2008 Survey may be viewed at www.ibon.org .

7 OUT OF 10 FILIPINOS CAN’T BUY ENOUGH FOOD, HAVE TROUBLE PAYING ELECTRICITY BILLS, BASIC COSTS

More Filipinos have trouble buying enough food and paying for basic expenses, according to the latest IBON nationwide survey.

Of the 1,495 respondents, 75.3% said that their family had a problem buying enough food, a substantial increase from 63.2% last January, while 69.7% had trouble paying for electricity and water bills.

The survey also showed that 67.42% of respondents have difficulty paying for transportation costs, compared to 60.6% in January; 73.4% had a problem buying their medicines or paying for their medical treatment; and 68.2% had trouble paying for their children’s tuition.

The April 2008 IBON Survey was conducted from April 7 to 16 across various sectors and regions nationwide with a margin of error of plus or minus three percent (end).

Below is the tabulation of results of respondents’ problems meeting basic expenses.

In the past three (3) months, has your family had a problem meeting the following expenses?

	January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
Buying enough food	950	63.21	1,126	75.32
Paying for children’s schooling	997	66.33	1,020	68.23
Paying for transportation	911	60.61	1,008	67.42
Paying for water and/or electricity	1,006	66.93	1,042	69.70
Buying medicines/paying for medical treatment	1,024	68.13	1,097	73.38

SIX OUT OF TEN FILIPINOS WANT OIL DEREGULATION LAW REPEALED

IBON SURVEY

In the wake of weekly oil price hikes and skyrocketing pump prices, six out of ten Filipinos said they favored the repeal of the Oil Deregulation Law, according to the latest survey conducted by independent think-tank IBON Foundation.

Results of the April 2008 IBON survey showed that 58.6% of respondents said they agree with proposals to restore government regulation of the local oil industry and repeal the Oil Deregulation Act (RA 8479). The law, which was implemented in 1998, removed government control over the downstream oil industry.

The IBON nationwide survey was conducted nationwide from April 7 to 16, 2008 with 1,495 respondents from various sectors, using a multi-stage probability sampling scheme with a margin of error of plus or minus three percent.

Below is the tabulation of results of the respondents’ perception on returning government regulation on the oil industry.

Do you agree with the proposals to return government regulation on the oil industry and to repeal the Oil Deregulation Law?

	January 2008		April 2008
	Frequency	Percentage	Frequency	Percentage
Yes	891	59.28	876	58.60
No	383	25.48	369	24.68
Don’t Know	218	14.50	235	15.72
No answer	11	0.73	15	1.00
Total	1,503	100.00	1,495	100.00

THINK-TANK SLAMS PROPOSAL TO CUT RICE TARIFF

Importation not a solution but the reason behind worsening rice crisis

The bid to lower rice tariffs to bring in more importation is a problematic proposal since the country’s growing dependence on rice imports is precisely the reason behind the worsening rice crisis.

In reaction to the proposal made at the government’s Food Summit to reduce tariffs to as low as 12%, independent think-tank IBON Foundation says that rice importation has not resulted in lowered rice prices, but worsened the bankruptcy of farmers and even placed the country to greater food insecurity.

The group added that rice tariff cuts will allow higher profit margins for private traders and will only give them further control of rice prices and ultimate monopoly in the distribution of rice.

Instead of cutting tariffs and allowing more importation, government should do the opposite: re-impose regulatory mechanisms on food supply that were removed by liberalization and provide enough subsidies and other support services for rice farmers.

IBON stresses the need to resist impositions made by international creditors like the World Bank and the Asian Development Bank to bring down rice tariffs and increase food importation..

Government should also immediately increase NFA’s  palay procurement from its dismal 5-year average of 0.05% of the total palay production to effectively influence the market. This will directly benefit local farmers, and will help NFA address the issue of hoarding by rice cartels.

AS GOV’T HOLDS FOOD SUMMIT : REVERSE RP’S DEPENDENCE ON FOOD IMPORTS, THINK-TANK URGES

The Philippines has become too dependent on food importation to make up for its shortfalls in domestic production and should reverse this trend, says independent think-tank IBON Foundation as the Department of Agriculture opens its Food Summit today.

“Importation should only be a short-term solution to supply shortages, “ said IBON executive editor Rosario Bella Guzman.

“In the long-term the government must make the country self-sufficient in the production of its staple foods such as rice, not just to guarantee that Filipinos have enough to eat without relying on foreign markets, but also to ensure sustainable development.”

According to data from the Bureau of Agricultural Statistics, the country imported 808,000 metric tons (MT) of rice in 2001, or 10% of total rice disposable of 8.1 million MT. By 2006, imports had grown to 1.7 million MT or 17% of total rice disposable of 10.3 million MT.

As the Department of Agriculture made a positive step of raising the buying price of palay to P17 per kilogram from P12, it should ensure that traders do not translate this to unreasonably higher prices of commercial rice.

Government should also allocate more funds for buying from local farmers, said Guzman. If the P5 billion announced by Pres. Arroyo were used, it would only buy some 300,000 MT– less than one percent of the expected production this year of 7.2 million MT of palay.

If the estimated P62 billion that would be used this year for imports were allocated for local procurement, the NFA could purchase from farmers 3.6 million MT of palay. Aside from benefiting local farmers, this would also help NFA address the issue of hoarding by unscrupulous rice traders.

“The Food Summit should focus on such urgent measures that will help improve our local producers,” said Guzman. “The country’s experience since the 1990s clearly shows that importation has only terribly worsened the country’s self-sufficiency in food.”

ACROSS-THE-BOARD WAGE HIKE URGENT, DOABLE –IBON

A legislated across-the-board wage hike, and not regional wage board hikes or non-wage benefits, should be urgently granted to give Filipino workers immediate relief from rising cost of living. And, contrary to claims of employers, such increase is doable.

The increasing labor productivity of local workers, or the ratio of national output to employment, has been steadily increasing over the past decade. IBON research head Sonny Africa pointed out that between 1999 and 2006, labor productivity has increased by 56.3% in nominal terms and 13.1% in real terms (taking inflation into account). This shows that employers could afford to grant the P125 wage hike, which would necessarily trim their profit margin but will certainly not push them to bankruptcy.

He added that such a wage hike is actually not enough to raise minimum wages to the level of decent living, but would at least provide relief for the workers. The current daily minimum wage in Metro Manila is P365, which would become P490 with the proposed wage hike, or only half of the estimated daily living wage as of March 2008 of P858.

Africa said that the wage hike must be legislated and across-the-board since all workers nationwide are affected by the skyrocketing prices of goods and services. He pointed out the regional wage boards have only served to confuse parallel conditions of workers across regions.

Further, a legislated wage hike would have the strength of law behind it and is more enforceable while allowing for fewer exemptions.

EMPLOYERS CAN GRANT MUCH-NEEDED WAGE HIKE

A wage hike is urgent amid soaring rice and food prices, rising transport costs, and power and rate hikes, and businesses are fully able to grant the wage hike demanded by workers, according to independent research group IBON.

According to IBON research head Sonny Africa, all that employers have to do is accept a cut in their profits or tap their accumulated earnings. In these critical times for the majority of Filipinos who remain poor, Africa pointed out that businesses can even cut back on their expenses that are basically unproductive and just about competing with each other to increase market share, and divert these to their workers instead. Such expenses, he said, include extraneous marketing and promotions expenses.

As it is, the average daily basi c p ay of the country’s wage and salary earners even falls far short of the minimum wage. A wage hike will put additional pressure on employers to pay higher wages, which is aside from how the government should also work to ensure that workers are paid the proper minimum wage.

As of the middle of 2007, labor force survey data on wage and salary workers found that laborers and unskilled workers were getting paid just P153 per day, service workers and shop and market sales workers were getting P227, trades and related workers just P262, and plant and machine operators and assemblers only P287. These occupations account for 58% of all jobs in the country.

The minimum wage also falls far short of the family living wage. For instance, the minimum wage in the National Capital Region is P362 per day but the family living wage for a family with five members is P672 per day– or a shortfall of P310 per day for a family with the average of five family members.

Africa added that the real value of families’ earnings has been falling steeply since the start of the Arroyo administration. While nominal family incomes increased 19% between 2000 and 2006, according to the latest Family Income and Expenditure Survey (FIES), the price of goods however increased 38 percent. Soaring prices more than off-set seeming increases in family incomes and, in effect, the average annual family income of P171,924 in 2006 was worth P20,400 less than in 2000.

Uncontrollable unemployment and dismally poor wages are among the most important reasons for the increase in poverty in recent years, said Africa . In itself these are solid reasons for a wage hike of at the very least P125 as demanded by organized labor.

Inflation has drastically eroded the value of this however and P125 in 2000 is worth just P64 today, he said

‘FEAR OF EXCLUSION’ A FLIMSY REASON TO RATIFY JPEPA

The government only tries to divert from its failure to negotiate a better deal when it says that the Philippines will be a big loser in the region if it does not ratify the JPEPA.

By Sonny Africa

IBON Features— Time and again, the country’s economic managers and apologists for the Japan-Philippines Economic Partnership Agreement (JPEPA) would invoke the scenario of the country being left out in the region if it does not ratify the bilateral deal.

However, this line of “fear of exclusion” is a flimsy reason for ratifying the JPEPA. The Senate hearings have established the deal’s unconstitutionality and exposed its supposed gains as largely unfounded hype. The long-term consequences of lost policy sovereignty are also grave and will cement Philippine backwardness.

It is not even true that the country will “lose out” to its neighbors in the region without the deal. For one thing, the Philippines is extremely open to Japanese investment as it is with US$827 million in net foreign direct investment coming from Japan in 2007, accounting for 41% of total equity inflows for the year. This implies that Japanese investors are already benefiting greatly from the country’s labor, resources and market even without JPEPA.

For another, the deals sealed by the country’s neighbors in Southeast Asia do not even completely open them up to Japanese investors and make the Philippines appear relatively closed.

The countries most comparable to the Philippines in the region are Malaysia , Indonesia and Thailand , and they have all kept nationalist and protectionist measures in their respective economic partnership agreements (EPAs) that Philippine negotiators have recklessly given up.

Malaysia protects 38 items with tariffs and at least 17 investment sectors, aside from maintaining its nationalist pro-Malaysian Bumiputera economi c p olicy. It has also not yet forsaken performance requirements on investment and only committed to “entering into consultations at the earliest possible time”.

Indonesia protects 835 items and over 40 investment sectors, as well as reserves the right to demand technology transfer and impose the hiring of nationals.

Thailand has the most liberal terms and protects just ten items and one sector. However, it maintains performance requirements on technology transfer, hiring of nationals, appointing of officials, research and development, linking domestic sales to exports, location of regional headquarters and overseas supply conditions.

In contrast, Philippine negotiators maintain protection on just two items and five sectors, while relinquishing all performance requirements that might have enabled genuine benefits from any Japanese investment in the country.

Aside from those that Thailand maintains, these include obligations regarding domestic content, local purchases, export requirements and import-export ratios. These policy measures are vital for the medium- and long-term growth of competitive industries. Without them, Japanese corporations will just be one-sidedly benefiting from their investment in the country– which is the sort of investment that the Philippines can and should do without.

The JPEPA is a bad deal that is much worse than reached by the country’s neighbors. The government only tries to divert from its failure to negotiate a better deal when it says that the Philippines will be a big loser in the region if it doesn’t ratify the JPEPA. IBON Features