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.

IBON On The JPEPA ‘Conditional Concurrence’: Still Unacceptable

The terms of the “conditional concurrence” of the Japan-Philippines Economic Partnership Agreement (JPEPA) proposed by the Senate committees on foreign relations and on trade improve the deal, but unfortunately, still do not go far enough.

Even if accepted by Japan , which is unlikely, they still do not transform the deal into a genuine economi c p artnership agreement that recognizes the vast inequalities between the two countries and takes genuine measures to develop the Philippines .

The conditions for concurrence with the JPEPA proposed by the Senate committees are potentially substantive. The proposed Annex “A” explicitly introduces reservations/exceptions for future/existing measures that are not in the original agreement. This may possibly protect investment areas and allows for performance requirements.

Meanwhile, the proposed Annex “B” explicitly introduces the possibility that subsequent changes in Philippine laws of a suitably high level– such as by a Supreme Court decision or legislation by Congress– could alter tariff schedule commitments. This could possibly allow for raising tariffs and other trade barriers.

These proposals aim to align the JPEPA with the nationalist economi c p rovisions of the 1987 Philippine Constitution and are positive as far as they go. However, they do not signify a real shift in the country’s economic strategies and merely assert what is already formally contained in the charter. Unfortunately, these potentially important provisions have in practice not really been able to hinder the unprecedented implementation of “free market” policies of so-called globalization in the country and, indeed, have been observed more in the breach.

In any case, the conditions for concurrence still fall far short of transforming JPEPA into a truly developmental deal for the Philippines . Such a deal would begin from recognizing the vast inequality between advanced Japan and backward Philippines . It would also acknowledge that Japan has become highly developed in part from decades of taking advantage of cheap Filipino labor and natural resources as well as from access to the domestic market.

On these premises, a genuine partnership deal would have Japan in solidarity with the Philippines and giving real support for its development. Among others, this means the Philippines having open access to Japan while still retaining its trade and investment protections, the Philippines maintaining its control over and capacity to regulate the domestic economy, and Japan providing untied financial aid and technical assistance that the Philippines can freely use according to its development priorities.

The JPEPA signed by the government on the contrary is unequal, defeatist and destructive. The “conditional concurrence” proposed is an improvement, but the only acceptable deal for the Philippines must be one based on the principles of solidarity, mutual benefit and development for those who have long suffered poverty and backwardness. Anything short of this must be rejected.


Apologists for the Japan-Philippines Economic Partnership Agreement (JPEPA) continue to claim that the treaty’s ratification will mean more employment and foreign remittances for Filipinos. But according to independent research group IBON, JPEPA highlights the Philippine government’s insensitivity to nurses and caregivers.

IBON research head Sonny Africa says that government is trying to portray that the JPEPA is a clear-cut benefit for a few hundred of the country’s health professionals. “In reality government is using them as fodder to cover up for its severe failure in generating jobs for Filipinos,” he said.

The Japanese government is facing the challenge of dealing with its aging population, and it is now state policy to reduce the costs of nursing and caregiving, said Africa . This situation has resulted in low wages and poor working conditions that even Japanese health professionals find intolerable.

The average annual income of nurses in Japan was just US$40,000 in 2004 compared for instance to US$54,000 in the United States . Caregivers’ annual income in Japan is much lower at US$25,200 for females and US$40,000 for males.

In May 2007, a survey conducted by the Health, Labor and Welfare Ministry found that 40% of Japanese nursing care license holders have turned down work in the industry because of low wages and poor working conditions. An earlier survey in 2006 found that 70% of Japanese nurses feel that they could quit their jobs at anytime due to chronic fatigue and professional disappointment.

The JPEPA and other similar deals lets Japan hire nurses and caregivers, for instance, from the Philippines and Indonesia , even more cheaply. After 6 months of language training, applicants can already have on-the-job training for up to 3-4 years while they try to pass the relevant national exams. Although they are already working during this time they will be receiving pay only as non-licensed workers or trainees or candidates– or as nurse’s aides and caregiver’s assistants. This goes far to cheapening the cost of Japan ’s health care, but at the clear expense of Filipino and other trained health professionals, said Africa .

“Using the so-called gains for nurses and caregivers to make acceptable a patently unequal deal like the JPEPA only shows an uncaring government that treats its labor force as mere commodities for export,” he said


A recently-signed free trade agreement between Japan and the Association of Southeast Asian Nations (ASEAN) would grant Japanese corporations unhampered access to the region’s markets, prohibiting ASEAN members to protect their own economy while allowing Japan to protect its domestic advantages. According to IBON research head Sonny Africa, the signing of the Agreement on Comprehensive Economic Partnership among ASEAN members and Japan (AJCEP) is another step toward Japan ‘s plan for an overarching economi c p artnership agreement with the countries of East Asia . The agreement would allow Japanese corporations to take advantage of ASEAN markets, labor and natural resources. “The Japan-ASEAN trade pact is part of Japan ‘s campaign to cement its economi c p ower across the region,” said Africa . He noted that Chapter 2, Article 15 of the AJCEP calls for each party to the agreement to accord “national treatment” to the goods of the other parties in accordance with Article III of the General Agreement on Tariffs and Trade (GATT). This means that ASEAN countries must treat imported products from Japan the same as their locally-made products. He warned that this provision prevents the Philippines and other developing ASEAN countries from using trade barriers, such as tariffs, as policy tools for economic development. Like the experience of countries who liberalized prematurely, the pact could stifle the growth of many domestic industries in ASEAN nations as they are overwhelmed by a flood of cheap imports from Japan . Under this unfair deal, ASEAN countries will be prevented from using the same protectionist policies that Japan itself used early in its economic development and may find themselves ultimately reduced to being sources of cheap labor and mineral and agricultural resources.

Why Fear Japan ’s Ire Over Non-Ratification Of JPEPA? Think-Tank Asks Miriam

Independent think-tank IBON Foundation asks Sen. Miriam Santiago why she is more concerned over earning the ire of Japan if the country fails to ratify the Japan-Philippines Economic Partnership Agreement (JPEPA) than the damaging consequences the pact is likely to bring the economy.

Santiago , who chairs the foreign relations committee, filed a committee report endorsing conditional concurrence which requires Japan to comply with at least 15 specified constitutional provisions to avoid a no-approval vote.

But according to IBON research head Sonny Africa, “Asking for a conditional concurrence from Japan is foolish because these questionable provisions in JPEPA are precisely the ones Japan wants included in order to gain maximum advantage for its corporations.”

These unconstitutional provisions include the “national treatment” clause that gives Japanese investors the same rights as local entrepreneurs; and the lifting of performance requirements that would have required Japanese investors to use a certain level of local content in their production and the hiring of a certain number of local workers.

Africa added that JPEPA’s proponents in the Senate themselves admit that the problem with the pact is that the advantages “were in favor of Japan but not necessarily the Philippines ”.

“The proposal of conditional concurrence highlights the unconstitutionality of JPEPA, and no amount of modification can make the deal beneficial for Filipinos,” he said.

“We should not be afraid of earning the ire of Japan but rather demonstrate that the Philippines is not afraid of rejecting bad trade deals that don’t promote its economic interests.” (end)

IBON is a convenor of No Deal! Movement Against Unequal Economic Agreements.


As government continues to turn to importation as remedy for the current rice crisis, this time with the proposal to further cut the powers of NFA and increase private importation, research group IBON reminds the administration that rice imports, based on experience, do not result in lower-priced rice.

Decades of importation has proven that imported rice are not sold at cheaper prices because private importers have the monopoly over pricing and trading, while government has withdrawn support for marketing and distribution. The NFA’s reduced role in palay procurement and rice trading, including setting price ceilings left farmers and consumers at the mercy of traders. Data shows that the monopoly of the rice market is increasing, with only 2,968 rice dealers and wholesalers as of 2006 compared to 21,000 in 1986. Meanwhile, NFA procurement is only at 0.5% and distribution rate is only 6% of total production.

Prices are even likely to be driven up by the recent decision to remove the 300,000 metric ton quota on private sector rice imports because it paves the way for profiteering. The government says that the NFA will remain the “importer on record” so private sector importers will not have to pay the current 50% tariff and will instead just be charged a P2-3 “importation service fee” which, the agriculture secretary was quoted as saying, “(reduces) the tariff to about around maybe 10%”. The NFA will also supposedly determine import volumes.

Under this scheme, rice bought abroad at US$700 per ton could be sold at as much as P35.40 per kilo or higher – broken down into P29.40 import cost (at an exchange rate of P42 per US$1), P3 NFA import fee, P3 storage and distribution cost. This amount does not yet include traders’ mark-up. If rice is bought abroad at US$1,000 then its domesti c p rice could rise to as much as P48 per kilo or higher with traders’ mark up.

The worst hit are the poorest four-fifths of Filipinos trying to live off P110 or much less each day and for whom food takes up half to over two-thirds of their expenses. As it is they have already seen their real incomes fall by 5%-13% in the period 2000-2006. Majority of these number are the rice farmers who are pushed more into bankruptcy with the flooding of imported rice in the market amid sufficient local production of palay.

If we are to ever going to get out of this crisis, the government should in the short term, start expanding land area planted to rice, increase the NFA’s local rice procurement to 25% to 30% so it can effectively influence rice prices in the market, provide sufficient production and price subsidies to farmers, and rescind its commitments to further liberalize agriculture


As the Senate resumes its sessions today, independent think-tank IBON Foundation again urged senators to reject the Japan-Philippines Economic Partnership Agreement (JPEPA) saying that the P365 billion in investments that the deal will supposedly bring is too high a price to pay for the death of the local manufacturing sector.

As it is, the long-term liberalization of the economy has further weakened the country’s manufacturing base. But the implementation of the JPEPA, and the free trade pacts that will inevitably follow in its wake, would end any chance of improving the local manufacturing sector and will permanently reduce it to being a mere assembler of imported inputs for re-export.

This trend is already evident in recent export figures from the National Statistics Office, which showed that industries which use imported raw materials or assembled parts, have overtaken those sourcing chiefly domestic raw materials.

IBON research head Sonny Africa said the trade liberalization brought by the JPEPA would further worsen the already dire situation of the country’s manufacturing sector. The “national treatment” and “most-favored-nation (MFN)” provisions in the free trade pact would prevent the country from imposing policies to help local manufacturers, such as restrictions on imported products and local content requirements.

Africa pointed out that the JPEPA is merely a way for Japan to promote the interests of its transnational corporations along with their local elite partners. Japanese companies already dominate many of the sectors in the local electronics manufacturing export industry, with its three biggest electronic firms accounting for over 53% of total gross revenues in the computer manufacturing sector as of 2006.

Instead of passing exploitative free trade pacts like the JPEPA, Africa said the government should instead implement national industrialization policies, which would lead to the creation of millions of much-needed permanent jobs and the country’s long-term economic development.