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.

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.

JPEPA HIGHLIGHTS GOV’T INSENSITIVITY TO NURSES

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

RP, ASEAN NATIONS NOW POWERLESS TO PROTECT OWN ECONOMY WITH JAPAN-ASEAN TRADE PACT

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.

PROPOSAL TO CUT NFA POWERS HIT:RICE IMPORTS DON’T SPELL CHEAPER PRICES; GOV’T URGED TO STRENGTHEN LOCAL RICE SECTOR INSTEAD

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

GOV’T CLAIM OF BILLIONS OF INVESTMENTS FROM JPEPA TO SPELL DOOM FOR RP MANUFACTURING


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.

EIGHT REASONS TO REJECT THE JPEPA

The JPEPA can be best described in three words: unequal, defeatist and destructive.

Recent government propaganda, however, has been trying to depict the JPEPA as an indispensable agreement– even as the country is currently reeling from a food crisis brought about by the same neoliberal framework that JPEPA was designed from.

With this, IBON is again releasing this summary below, which briefly explains why the country stands to lose from JPEPA and why the Philippine Senate should reject this patently unequal deal.

1. The JPEPA is a grossly unequal deal.

Under the JPEPA, Japan protects numerically more sectors of its economy from investment liberalization than does the Philippines and in addition is also very specific in protecting what it deems as vital sectors.

Advanced Japan lists at least 16 sectors to be so protected, many of which even require a minimum of 66% of full nationality. Japan rightly includes such strategic areas as mining, telecommunications, air and water transport, shipping, and banks and financial institutions for small businesses.

Underdeveloped Philippines , on the other hand, lists just five specific sectors: mining, rice and corn, geothermal energy, atomic energy and shipping. The other items are just formulated generically and are meaningless in terms of explicitly supporting and protecting specific sectors of the economy.

2. The JPEPA gives false or marginal gains for the Philippine economy.

There is much hype that Japan will open its doors to Filipino nurses and caregivers under JPEPA provisions on “movement of natural persons”. The pact allows for the entry and temporary stay of persons who engage in supplying services as nurses or certified caregivers for one to three years (which may be extended). There are, however, strict requirements that must be fulfilled as well as regulations to be followed under Japanese law.

Among the prerequisites are that nurses and caregivers should be proficient in both spoken and written Japanese and be qualified under Japanese law. Although these professional and language requirements are not unreasonable, they are limiting as far as deployment of Filipino health workers to Japan are concerned.

In all likelihood very few nurses and caregivers will be able to surmount the considerable language, technical and cultural barriers. Even assuming Japan lifts its quota limits, only a few thousand health workers may hurdle these barriers.

3. JPEPA lays the basis for increased toxic waste from Japan.

Under JPEPA, the country risks becoming a big dump site for Japanese waste materials, not just the recyclable ones but also toxic materials fit for disposal such as clinical and chemical wastes. Once the pact is ratified and implemented, these wastes can be imported tariff-free, from their original tariffs of 3% to 30% set under the Most Favored Nation treatment of the World Trade Organization.

In the face of widespread protests against JPEPA, the two governments have since come up with a side agreement that supposedly addresses these issues. However, this does not detract from how the Philippine government, under the pretext of developing local waste treatment and disposal capacity, did concede to the entry of these wastes by lowering existing tariffs to zero, notwithstanding the provision on “non-relaxation” of environmental protection.

4. “Free trade” does not result in development for backward countries.

On the contrary, historical and current experience show that: 1) industrialized countries like Japan developed on the basis of protection and discriminatory support; and 2) Third World countries like the Philippines that prematurely liberalized have suffered.

Japan certainly has more to gain from so-called free trade with the Philippines . The Japanese economy’s gross domesti c p roduct (GDP) of US$4.4 trillion in 2006 is 50 times larger than that of the Philippines . Japan is also the biggest foreign investor in the Philippines with a cumulative US$3.9 billion as of 2005, constituting over one-fifth of the country’s foreign investment stock. Japan accounted for 17% of the Philippines ‘ total trade in 2005 and is its second largest trading partner, while the Philippines accounted for just 1.4% of Japan ‘s total trade.

Underlying these figures are economies of vastly different industrial, agricultural and service sector strength. The myth of “comparative advantage” and the so-called “level playing field” between such economies is merely a smokescreen for giving the stronger economy free rein to profit from the other.

5. The JPEPA’s liberalization agenda severely limits the Philippines‘ freedom to set economic policy.

Government controls on how foreign investors operate in the country are necessary to ensure that the Philippines gets concrete and substantial benefits from such investments. This means, among others, ensuring control over investors’ operations through equity and ownership requirements or joint ventures. It also means ensuring benefits to the domestic economy through local content requirements and technology transfers.

These linkages between foreign investors and domestic entrepreneurs will not spontaneously arise and have to be consciously built, yet the JPEPA would disallow policies to build these. Investment provisions on “National Treatment” and “Most Favored Nation Treatment” will prevent the Philippines from favoring Filipino entrepreneurs over Japanese investors. There are also explicit “Performance Requirement Prohibitions” which disallow the Philippine government from requiring Japanese investors to achieve a certain level of domestic content, purchase goods and services in its area of operations, among others.

All these are designed to give Japanese investors greater protections, to ensure that they retain their advantages and to enable them to extract the maximum profit from their operations.

6. The JPEPA will worsen Philippine de-industrialization and cause job losses.

The government claims the local exporters would gain through export growth as tariffs are reduced and removed altogether. But the majority of Philippine exports to Japan are industrial manufactures that are actually subcontracted from Japanese transnational corporations (TNCs) and assembled using imported inputs while taking advantage of cheap Filipino labor.

If anything, the JPEPA actually raises the danger that some electronics and auto parts suppliers based in the country, whether TNCs or any genuinely Filipino enterprises, will be affected. Of course, there is no genuinely Filipino electronics or auto industry to speak of. But there are still such suppliers based in the country that import raw materials or components and assemble them either for re-export or as inputs to other electronics or auto assemblers in the country.

Such firms may have to close down if the removal of tariffs on these items makes them cheaper to import than procure from locally based manufacturers. Local steel makers will also be facing steeper production from Japanese producers. The resulting plant closures and layoffs could well mean some tens of thousands of jobs will be lost.

7. The JPEPA will increase landlessness and undermine agricultural livelihoods.

There is also much hype about supposed export gains from a more open Japanese market for Philippine bananas and pineapples. However, food exports are actually a small and even diminishing share of total Philippine exports to Japan, accounting for only 7.4% of total exports to it from 2001-2006. While food exports potentially have high local linkages to the local economy, grassroots farmers and farm workers are unlikely to benefit from JPEPA.

Agriculture in the Philippines , including that of bananas and pineapples, is in general very backward and underdeveloped because of the lack of true land reform and the absence of government support and extension services. Further, foreign agri-business TNCs, such as Dole and Del Monte and their big domestic corporate growers, account for virtually all banana and pineapple exports from the Philippines.

Local farmers are reduced to entering into oppressive contract growing and farm lease arrangements with these TNCs. These arrangements place all the risk of cultivation onto the farmers and force them to buy overpriced inputs. Such arrangements raise the high possibility that small farmers may lose their lands and become workers for hire or join the exodus to the cities.

8. The JPEPA is not about Philippine development.

The JPEPA’s provisions on trade and investment liberalization are designed to give Japan ‘s corporations the greatest benefit to make huge profits, at the expense of the greatest damage to the Philippine economy.

The pact also contains other measures that complement that central thrust. While packaged as being aimed towards developing domesti c p roductive capacity, their real objective is to make it even easier for Japanese firms to trade and invest in the Philippine on terms that are the most beneficial to them.

These include the supposed cooperation in trade and investment promotion, trade facilitation, technical assistance to meet Japanese requirements and regulations, capacity building in paperless trading, training to facilitate improvements in the competitiveness of workers, human resource development and language proficiency training.

GOV’T CAN ENSURE CHEAPER RICE BY DOING AWAY WITH LIBERALIZATION, RESISTING CREDITOR PRESSURE

Government can actually provide the much-needed relief of low-priced rice if it only gets out of its liberalization framework in coming out with remedies to the current rice crisis, said independent think-tank IBON Foundation.

Its responses to the rice crisis such as lifting the rice import quota and the proposal to increase the selling price of National Food Authority (NFA) rice are all conditionalities imposed on government by multilateral creditors like the World Bank and the Asian Development Bank (ADB) for further liberalization.

The Arroyo administration could, for instance, increase NFA procurement to help local rice producers, but it clearly prefers to preserve its “fiscal gains” by denying the agency enough subsidy, said IBON research head Sonny Africa.

Rice imports needed to make up for shortfalls in local production could mean as much as a P64.1-billion subsidy for NFA rice this year, an amount that is already over five times the national government deficit in 2007. Providing this much subsidy– even if it will benefit farmers and consumers– would not sit well with creditors. Hence, instead of strengthening the NFA, government has removed rice import quota to allow private traders to import larger amounts of rice, and now proposes for a hike in NFA prices.

These recent government proposals, Africa said, all comply with the ADB and World Bank conditionalities of NFA privatization and full liberalization of rice importation. It clearly shows that while it can ensure cheaper rice, government chooses to abandon its responsibility to the people and give in to creditor pressure

ERMITA PRESENTATION FAILS TO REPRESENT FILIPINOS’ TAKE ON RP STATE OF RIGHTS

It appears that even an unusually large contingent of government advisers was still not enough to ensure that Executive Secretary Eduardo Ermita presented an accurate picture of the human rights situation in RP, much less truthfully represent the Filipinos’ perception of it.

According to research group IBON, one of the convenors of the Universal Periodic Review (UPR) Watch, Sec. Ermita’s presentation at the UPR deliberations was the exact opposite of most Filipinos’ preception of the state of human rights in the country. Based on IBON’s yearend nationwide survey, most Filipinos are aware that many activists and civilians critical of the Arroyo government have become victims of extrajudicial killings and forced disappearances since 2001. Majority of respondents who were aware believe that the police and/or military are behind these human rights violations.

IBON executive director Jaz Lumang said, “As the Philippine representative to the UN Human Rights Council, Ermita failed to represent the sentiment of his countrymen and completely distorted the real situation of human rights in the country.”

The shameful efforts of Ermita and the government delegation to conceal the administration’s deplorable human rights record and misrepresent the truth before the international community are more than enough basis to remove the Philippine government from the UN Human Rights Council, said Lumang.