Poverty and Decent Work- The Effects of Globalization

Book Report: Advancing Decent Work Amidst Deepening Inequalities in Asia, Prof. Rene Ofreneo in partial completion of IR 220 HRD in the National Level, Prof. Rosa Mercado

ALFREDO V. PRIMICIAS III- UNIVERSITY OF THE PHILIPPINES, SCHOOL OF LABOR AND INDUSTRIAL RELATIONS 1

INTRODUCTION

Stephen Smith, professor of Economics at George Washington University and author of Ending

Global Poverty, wrote that extreme poverty is widespread. He clarified this by adding that about

2.8B people subsist lower than US$2 per day (or roughly P80.00 at US$1= P40). Prof. Smith went

grimmer by sharing that nearly 30,000 children in developing countries die due to malnutrition

and poor living conditions. He added that in 2000, there were 875M adults who were illiterate due

to having only 4 years of average school time. He also illustrated that through an ILO finding that

there are 180M child laborers while there are 8.4M children who are in slavery, trafficking, debt

bondage, prostitution and pornography.

This is a dark message to broadcast. Despite the aggressive drive to put forward the Millennium

Development Goals by the United Nation, the world still suffers from the stark reality of poverty.

Then on March 10, 2014, Forbes Magazine released its 2014 Full List of Asia’s Richest People1

with its banner cover story that predicted in 1996 that the 21st Century is Asian Century. It simply

explained that the share of world’s billionaire from the US has decreased from 35% to 33%, while

Asia’s cut has increased its billionaire status from 25% to 28% covering the same period. It also

recorded that China has 152 billionaires as compared to 0 in 1996.

Interestingly, the Philippines has 16 billionaires-- led by taipan Henry Sy with net worth of

US$12.7B, then Jaime Zobel de Ayala at US$3.6B and Alfredo Yao at US$1B among others. But

the truest form of capitalism is embodied by Microsoft’s chairman and founder Bill Gates with net

worth at US$79.2B2 or US$3.2B higher than our nation’s external debt in 20133. Just try to

imagine if Bill Gates pays our nation’s external debt then his wealth can educate and nourish 16M

malnourished Filipinos4. In fact in 2007, the World Institute for Development Economics

(WIDER) found out that “90% of the world’s household wealth is held in North America, Europe,

Japan and Australia.”5

Therefore, one begs to ask: Is wealth equally distributed?

1 http://www.forbes.com/sites/russellflannery/2014/03/10/2014-forbes-billionaires-full-list-of-asias-444-richest-people/ 2 http://www.forbes.com/billionaires/list/ 3 http://en.wikipedia.org/wiki/External_debt_of_the_Philippines#Philippine_external_debt 4 http://newsinfo.inquirer.net/290416/16m-filipinos-malnourished 5 http://www.decent-work-worldwide.org/index.php?option=com_content&task=blogcategory&id=55&Itemid=78

http://www.forbes.com/sites/russellflannery/2014/03/10/2014-forbes-billionaires-full-list-of-asias-444-richest-people/

http://www.forbes.com/billionaires/list/

http://en.wikipedia.org/wiki/External_debt_of_the_Philippines#Philippine_external_debt

http://newsinfo.inquirer.net/290416/16m-filipinos-malnourished

http://www.decent-work-worldwide.org/index.php?option=com_content&task=blogcategory&id=55&Itemid=78



DEAN OFRENEO’S ADVANCING DECENT WORK

However, a different world seems to be appearing in Asia. Due to globalization, this side of the

world tend to be reaping phenomenal progress leading to economic power. In fact, on Dean

Ofreneo’s Asia and the Pacific: Advancing Decent Work Amidst Deepening Inequalities tend to

announce (though doubtful) that Asia has achieved significant development as raised by ADB,

ILO and other sources:

700M Asians are out of poverty

China is the 2nd world largest economy

India, South Korea and Indonesia are emerging economies

Asia’s global share in GDP is 29.2% in 2009

There would be several factors that would explain this new economic landscape as compared to

the late ‘90s known as the Asian financial crisis. This paper would then venture on several sources

particularly on the discussion of Decent Work in Asia.

GLOBALIZATION This report reflects on the importance of the United Nation’s Millennium Development Goals as

the thread that links each nation-- rich or poor, face an inevitable future of scarcity and destruction

unless the present generation changes its propensity for economic growth and gain:

1. Eradicate extreme poverty and hunger.

2. Achieve universal primary education.

3. Promote gender equality and empower women.

4. Reduce child mortality.

5. Improve maternal health.

6. Combat HIV/ AIDS, malaria and other diseases.

7. Ensure environmental sustainability.

8. Develop a global partnership for development.

What is the current sight on globalization? “The current process of globalization is generating

unbalanced outcomes, both between and within countries. Wealth is being created, but too many

countries and people are not sharing in its benefits. They also have little or no voice in shaping

the process. Seen through the eyes of the vast majority of women and men, globalization has not

met their simple and legitimate aspirations for decent jobs and a better future for their children.”6

Asia is at the heart of the globalization process (Somavia, 2005). Working women and men have

increasingly high levels of education and skills, and enterprises are becoming world- class

competitors.

Recent economic growth in Asia has been by far the most rapid in the world. Yet Asia faces a

number of employment challenges:

6 World Commission on the Social Dimensions of Globalization: Dialogues in Asia (Bangkok, ILO, 2004).



1. Rising unemployment.

2. Supporting the working poor trapped in poverty in the informal economy so that they can

build a better life.

3. Tackling the strong gender imbalances in employment and remuneration.

4. Opening up opportunities for and realizing the full potential of Asia’s youthful population.

The significance of Asia in the world economy can be seen from a number of indicators7:

1. Population of 4 billion.

2. Exceptional trade performance and strong domestic demand.

3. The region’s share of world merchandise exports was 24.2% and world services exports

was 17% in 2002.

4. In the developing world, Asia is the biggest destination of foreign direct investment (FDI).

However, other factors:

1. Total population in Asia will increase from 3.7 billion in 2000 to 4.7 billion in 2025 and

5.2 billion in 2050.8 Japan is expected to have a smaller population in 2025. Between

2025 and 2050, population decline is projected for China, Fiji, Republic of Korea and

Singapore. By 2050, India is expected to overtake China as the most populous country in

the world. This will impact “Asia’s poorest who are least prepared to deal with the

challenges of feeding additional millions, providing jobs for potential workers and coping

with increased rural density and urban congestion.”9 Also, high youth unemployment rates

represent a wasted opportunity for tapping the ‘demographic dividend’ provided by the

demographic transition.

2. Asia is home to some 767 million of the world’s poor living on less than US$1 a day—the

majority are women10, this implies that

a. Women have a higher incidence of poverty than men

b. Women’s poverty is more severe than that of men

3. Climate change that had caused severe calamities hit the poor the hardest. They are the

ones who are located in the most disaster- prone areas. They live in the most flimsy

shelters. They are vulnerable to low crop prices and unemployment. “The tsunami at the

end of 2004 has also had a serious impact on jobs and livelihoods. In Indonesia, over

600,000 workers lost their jobs. In Sri Lanka, over 400,000 workers were thrown into

poverty by job losses. In Thailand, 30,000 households dependent on fisheries and over

90,000 dependent on tourism lost their means of livelihood. In India, 2.7 million people

lost their jobs.”11

4. In Asia and Pacific region, there are an estimated 127 million working children under the

age of 15 who work for long hours in mines, agriculture, construction, fisheries, car repair

workshops, homes and brothels.12

7 Page 5, Making Decent Work an Asian Goal- 14th Asian General Meeting. Vol. 2. ILO, Oct. 2005. 8 United Nations: World Population Prospects: The 2002 Revision (NY, 2003) 9 ADB: Key Indicators 2002, op. cit. p. 34. 10 Page 14, Making Decent Work an Asian Goal- 14th Asian General Meeting. Vol. 2. ILO, Oct. 2005. 11 ILO Response to the Earthquake and Tsunami Disaster in the Indian Ocean, Geneva, 2005. 12 ILO Every Child Counts: New Global Estimates on Child Labor (Geneva, 2002).



Dean Ofreneo’s Why Asia Is Not Flat- a fitting introduction to his seminal work Asia and The

Pacific: Advancing Work Amidst Deepening Inequalities, further described the effects of

globalization as:

There are 4 billion Asians making domestic demand stronger as compared to other

hemispheres.

World merchandise export is equal to 24.2%.

World services export is equal to 17%.

Asia is the favored destination of foreign direct investment (FDI).

Yet, Dean Ofreneo categorized these achievements as mere contradictions based on his research:

Globalization failed to deliver promised decent living standards.

Joblessness, for instance, has grown worse in relation to total job vacancies. In the ‘80s

there were 337M jobs generated as compared to 176M jobs in the ‘90s.

The rise of the Precariats (those who are engaged in informal, migrant or casual

employment, employment where social protection, adequate income, work equity and job

security are absent) in order to serve TNCs (transnational corporation) using Raise to the

Bottom strategy.

Rural areas are farther both in location and plan for trade opportunities leading to urban

migration of skilled workers who abandon their agriculture economy.

Informal employment has a staggering 65% inclusion of non- agricultural employment

(93% in India).

Migrant employment has 214M workers in 2010.

Economist Celia Reyes, PhD, (2003) through the Philippine Institute for Development Studies

published the Philippine condition, “The Poverty Fight: Has it Made an Impact.” She reported

the following13:

In the macro sense, among nations namely the Philippines, Malaysia, Indonesia, Thailand

and Vietnam, the Philippines has the “highest poverty incidence based on the US$1 per

day criterion.”14 In fact, in 1990 the Philippines, with poverty incidence of 19%, was better

off than Vietnam, with a poverty incidence of 51%. However, today Vietnam has lower

poverty incidence as compared to the Philippines.

44.2% of the total number of Filipino families were considered poor in 1985. But 12 years

after, poverty has declined to 31.8%.

The Asian financial crisis and the effects of climate change, particularly the El Nino

phenomenon, in 1997 affected PH poverty level making it 33.7% in 2000.

Due to increased PH population, there were 4.36 million families declared poor in 1985

while it became 5.14 million five years after.

Importance of education is highlighted when household head graduates from college since

level of poverty from 6.5% went down to 2.5% or “three out of every five families whose

13 Page 3, The Poverty Fight: Has It Made an Impact. Reyes, Celia. PIDS, 2003. 14 Page 22, The Poverty Fight: Has It Made an Impact. Reyes, Celia. PIDS, 2003.



heads did not attend school remain poor.”15 In fact, educational attainment of the “never

poor is at 13.04 years,”16 while those who are chronic poor is at 7.27 years only.17

Literacy rate rose from 90% in 1989 to 94% five years after.

Incidence of poverty is higher if families have nine members at 57.3% as compared to

families with single- person households at 9.8%.

These realities engulf the Philippine nation, is there still hope over the horizon?

Dean Ofreneo offered pieces of advice:

Economists and world leaders must stop glorifying the Neo Liberals and their free labor

market that demand less rigid labor regulations on hours of work, hiring and firing

procedures.

Nations must continue to strengthen and support trade unions. Struggling in the past few

decades, Trade Unions must fervently champion decent work through reformative

programs in industrial relations, and effectively include the Precariats.

Financial institutions namely ADB and WB must provide financial loans to countries

where payment of obligations must also sign off and complete compliance to freedom of

association, collective bargaining agreement, non- discrimination, elimination of child

labor.

Social protection must be for all, regardless of race, gender, religion, social class and

political affiliation.

Develop standards of corporate behavior that curb the unreasonable race to the bottom by

the TNCs (transnational corporations).

WHAT IS DECENT WORK?

Dharam Ghai (2006) edited an ILO paper Decent Work: Objectives and Strategies and preached

that, “the rights of working people are based on ideas of social justice. Even if not legally

enforceable, moral rights are claims to be treated with the dignity that befits a human being: the

right to work, the right to social security and health care – require positive action by the state, and

have to be progressively realized.”18 These are basically reflected when Baldoz (2014) wrote that

it was “a very important tool in sustaining efforts towards better understanding of labor standards,

improvement of working conditions, and promotion of a culture of voluntary compliance with

labor standards among stakeholders.”

Similarly, Ghai (2006) issued that, “the language of human rights is widely used today rather than

“social justice.” But human rights cannot exist without social justice. For this reason rights should

be formulated in a way which allows them to be integrated within the same overall framework as

the goals of social justice. This can be done by defining rights not simply as negative means of

defense against the state, but also as positive means to achieve meaningful participation in society.

For example, a constitutional right to equal treatment must be understood not merely as a

15 Page 9, The Poverty Fight: Has It Made an Impact. Reyes, Celia. PIDS, 2003. 16 Page 34, The Poverty Fight: Has It Made an Impact. Reyes, Celia. PIDS, 2003. 17 The book The Poverty Fight: Has It Made an Impact gave three levels of being poor: (1) chronic poor; (2) Transient poor; (3) never poor 18 Page 33, Decent Work: Objectives and Strategies, Ghai, D, ILO, 2006



formalistic defense right, but as a right to equal opportunities. A right to education and to

vocational training has to be understood as requiring the provision of educational and training

services.”19

Therefore, the four ILO elements are:

1. Employment

2. Social security

3. Social dialogue

4. Rights at work

Moreover, the rights to decent working conditions and fair pay depend upon the “level of socio-

economic development in a particular country and they generally presuppose economic growth

and expanding social welfare. Secondly, there is a contradiction between the inequality of class in

the marketplace and the democratic element of citizenship and equal rights in the political

sphere.”20

ILO (1999) described freedom, equity, security and human dignity by the following standards:

(a) Opportunities for all to find any kind of work, including self-employment, family work,

and wage employment in both the informal and formal sectors;

(b) Freedom of choice of employment, i.e. excluding forced, bonded and slave labor and

unacceptable forms of child labor;

(c) Productive work, providing adequate incomes and ensuring competitiveness;

(d) Equity in work, including absence of discrimination in access to and at work;

(e) Security at work, as far as health, pensions and livelihoods are concerned; and

(f) Dignity at work, not only in the respect that is extended to workers, but also in their

freedom to join organizations which represent their interests and to voice concerns and

participate in decision making about working conditions.

These goals would then lead us to ponder DECENT WORK. Can decent work help a community

eradicate poverty and hunger? Can decent work fund necessary cost on primary education? Can

decent work protect the environment and make it more sustainable?

“Decent Work are opportunities for women and men to obtain decent and productive work under

conditions of freedom, equity and human dignity.”21 Moreover, “making decent work an Asian

goal is not about conditionality. Nor is it about decent work being the same in every Asian country.

Different countries, given their national specificities, will strive differently towards enhancing the

quantity and quality of employment. However, there are principles and rights, such as freedom of

association, non- discrimination, non- use of forced labor and child labor, and the promotion of

gender equality, that can and should be respected in all contexts and at all levels of development.”22

This is the paradigm of decent work. This is decent work.

19 Ibid. Page 59. 20 Op. Cit. Page 58, , Decent Work: Objectives and Strategies, Ghai, D, ILO, 2006 21 Somavia, J., ILO Director General, 2001 22 Page 3, Making Decent Work an Asian Goal- 14th Asian General Meeting. Vol. 2. ILO, Oct. 2005.



THE INFORMAL SECTOR Prof. Marius Olivier (2011) mentioned that there are “45%- 85% working in Asia are working

informally.”23 He further went on to say that, “in social security terms, the reason why those who

work informally are not covered is primarily legal. If you analyze the social security laws, what

is required inherently is the existence of an employment relationship where you have an employee

who works for an employer for remuneration. The impact of that is dramatic because the moment

you have this narrow definition of employment relationship as basis for social security coverage

you exclude many other groups of workers, including those who are subjected to externalization,

casualization and other kinds of dependency relationships like contracting arrangements.”24

Moreover, social security and protection is a fundamental human right as proclaimed in the

Universal Declaration of Human Rights (UDHR), the International Covenant on Economic, Social

and Cultural Rights (IESCR), the Convention on the Elimination of Discrimination Against

Women (CEDAW and various ILO conventions, shared by Rosalinda Ofreneo, 2011):

Art 22: Everyone, as a member of society, has the right to social security and is entitled to

realization through national effort and international cooperation and in accordance with the

organization and resources of each State, of the economic, social and cultural rights indispensable

for his dignity and the free development of his personality.

Art 23 (3): Everyone who works has the right to just and favourable remuneration ensuring for

himself and his family an existence worthy of human dignity, and supplemented, if necessary, by

other means of social protection.

DECENT WORK- A FOCUS ON THE PHILIPPINES The “Philippines was the first country the ILO supported under the DWPP (Decent Work Pilot

Program).”25 The ILO- driven program was to test the integrated approach to decent work which

was also based on the Medium- Term Philippine Development Plan for 2001- 2004. The overall

aim of DWPP would have the following key results:

1. Productive employment as the sustainable route out of poverty;

2. Promoting decent work throughout all stages of life;

3. Establishing rights at work and good governance;

4. Addressing discrimination and vulnerabilities;

5. Strengthening tripartism and social dialogue;

6. Responding to crises, disasters and conflicts.

In 2002- 2003, the Philippines has reported “successful results in promoting policy and

institutional support in the informal economy. The project built on good practices that were

23 Page 3, Social Security Coverage of the Informal Sector: Global and Asian Perspective. Prof Marius Olivier, PH Journal of Labor and Industrial Relations, Special Issue 2011 24 Ibid. 25 Page 5, Making Decent Work an Asian Goal- 14th Asian General Meeting. Vol. 1. ILO, Oct. 2005.



already in place and thus took an incremental approach towards instituting policy, legal and

institutional reforms.”26

“In the Philippines, the Decent Work agenda has been widely used to express employment

aspirations and policy goals.”27 It was during the employment summit in March 2001 when then

President Gloria Arroyo made a deliberate declaration that employment is on top of her

development agenda, or so called the Philippine Medium Term Development Plan 2001- 2004 that

includes, “promoting full, decent and productive employment.”28

Unfortunately, “the most crucial failure of Philippine development strategy lies in its employment

record (Krugman et al. 1992).“

World Bank (2013) described this as “the central policy challenge facing the Philippines is how to

accelerate inclusive growth – the type that creates more and better jobs and reduces poverty.”29

So far this has proven to be vague, mainly because of our country’s long history of policy

distortions that have caused to slow the growth of agriculture and manufacturing in the last six

decades. Instead of rising agricultural productivity paving the way for the development of a vibrant

labor-intensive manufacturing sector and subsequently of a high-skill services sector, the converse

has taken place. Agricultural productivity has remained down, manufacturing has failed to grow,

and a low-productivity, low-skill services sector has emerged as the focal feature of the economy.

“Lack of competition in key sectors, insecurity of property rights, complex regulations, and severe

underinvestment by the government and the private sector have led to this growth pattern, which

is not the norm in the East Asia region.”30 More importantly, this irregular economic growth

pattern has not provided good and stable jobs to the majority of the Filipinos and has led to a

substantial out-migration of many of its best and brightest citizens.

Moreover, for the past decades, employment record shows that “only about a fourth of the potential

entrants to the labor force get good jobs. Of the 1.15 million potential entrants to the labor force,

slightly less than half have college degrees. Of the 500,000 college graduates every year, 240,000

can be absorbed in the formal sector, such as business process outsourcing (BPO) (52,000) and

manufacturing (20,000). About 200,000 find jobs abroad, and around 60,000 will be unemployed

or exit the labor force. The remaining 650,000 entrants, of which around half have high school

degrees, have no other option but to find or create work in the low-skill and low-pay informal

sector.”31

Also, it is projected that “by 2016, around 12.4 million Filipinos would still be unemployed,

underemployed, or would have to work in the informal sector, where moving up the job ladder is

difficult for most people. Addressing this challenge requires meeting a dual challenge: expanding

formal sector employment even faster while rapidly raising the incomes of those informally

employed.”32

26 Page 29, Making Decent Work an Asian Goal- 14th Asian General Meeting. Vol. 1. ILO, Oct. 2005. 27 Page 32, Decent Work in South- East Asia and the Pacific, ILO, Oct. 2003. 28 Ibid. 29 Philippine Development Report- Creating More and Better Jobs, World Bank PH Office, September 2013 30 Ibid. Page 4 31 Ibid. Page 5. 32 Ibid. Page 6.



Nevertheless, assessing successful employability can also mean differently particularly if we use

ILO’s (International Labor Organization) four objectives in ensuring Decent Work33:

1. Creating Jobs

2. Guaranteeing Rights at Work

3. Extending Social Protection

4. Promoting Social Dialogue

These statements clearly project an image of past administrations whereby public and economic

policies had slipped the mark in making absolute progress in developing employment factors and

industries to utilize the energies of active and productive Filipino people.

TREND IN EMPLOYMENT BY INDUSTRY 1990- 2009

Briones (2011) said that “since 1990, considerable headway has been made towards eradication of

poverty, reduction in child mortality, as well as improvement in household potable water and

sanitation.”34 He further asserted that “the country was in the middle of a wide- ranging market

oriented reform program. Series of Executive Orders cut tariffs and consolidated tariff lines.

Importation was liberalized. The Ramos (1992- 1998) administration also embarked on a program

of liberalization for foreign direct investment and the service sector, along with privatization. A

significant exception is agriculture, where distortions in sheltered sub- sectors amplified in the

33 http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--de/index.htm 34 Page 3. Assessing Development Strategies to Achieve MDGs in the Republic of the Philippines, Roehlano M. Briones, UN Department for Social and Economic Affairs, 2011.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

1990 1995 2000 2005 2009

Agriculture

Industry Sector

Service Sector

http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--de/index.htm



1990s and completely reversed the policy bias against the sector.”35 These words depicted the PH

economy in the ‘90s that clearly gave prominence to agriculture as an important employment

driver. But what does this mean? Catelo and Pabuayon (2013) explain that the “agricultural sector

is important in the Philippine economy; providing for the food needs of the population and the raw

material requirement of industry, creating jobs and wealth, and generating foreign exchange.”36

Yet they have described that agriculture as a sector showed “lackluster performance both in terms

of growth and share to total output and employment, as well as its ability to secure food for the

Filipinos and alleviate poverty in rural areas.”37 In fact the reason why the economy is having

difficult in creating more and better jobs is because the “country’s long history of policy distortions

slowed the growth of agriculture and manufacturing in the last six decades. Instead of rising

agricultural productivity paving the way for the development of a vibrant labor- intensive

manufacturing sector and subsequently of a high-skill services sector, the converse has taken place.

Agricultural productivity has remained depressed, manufacturing has failed to grow sustainably

and a low-productivity, low- skill services sector has emerged as the dominant sector of the

economy. This anomalous growth pattern has failed to provide good jobs to majority of the

Filipinos and has led to a substantial outmigration of many of the country’s best and brightest

people.”38

Since the focus is on agriculture as a sector of dominance between 1990 and 1995, it is therefore

fitting to determine whether workers like farmers are considered to belong to vulnerable

employment? International Labor Organization (ILO) chief of employment Lawrence Johnson

(2010) defines vulnerable employment as, “sum of own- account workers and contributing family

workers. They are less likely to have formal work arrangements and are therefore more likely to

lack decent working conditions, adequate social security and ‘voice’ through effective

representation by trade unions. This is often characterized by inadequate earnings, low

productivity and difficult conditions of work that undermine workers’ fundamental rights.”39

Cabegin, Dacuycuy and Alba in the DLSU Policy Brief- Stubborn Unemployment and

Employment Vulnerability in the Midst of Economic Growth: The Philippine Case explain that

“the workers in the agriculture sector were twice as likely to be disadvantaged (underemployed or

fully employed in vulnerable employment) than that in the manufacturing or services sector40. It

is therefore pretty clear that workers in the agriculture sector would migrate to other opportunities

(as OFWs or transfer to the service sector) causing the huge decline in employment rate.

But what about the service sector? According to Park and Shin (2012) “since the early 1980s, the

GDP share of services has been increasing rapidly. Overall, the patterns are consistent with the

general perception of the Philippines as a country that failed to develop a strong manufacturing

35 Ibid. Page 4. 36 Page 1, Overview of PH Agriculture, 1990- 2009, Salvador Catelo and Isabelita Pabuayon, UPLB- College of Economics and Management, 2013. 37 Ibid. 38 Page 2, Philippine Development Report- Creating More and Better Jobs, World Bank PH Office, Sept. 2013. 39 http://www.ilo.org/global/about-the-ilo/newsroom/features/WCMS_120470/lang--de/index.htm 40 Page 3. Stubborn Unemployment and Employment Vulnerability in the Midst of Economic Growth: The Philippine Case, Cabegin, Dacuycuy and Alba; Policy Brief- DLSU.

http://www.ilo.org/global/about-the-ilo/newsroom/features/WCMS_120470/lang--de/index.htm



base.”41 They added that the service sector created a huge impact in Asian economy in the 1980s

where contribution in “the Philippines at 81.7%, Singapore at 71.2%, Taipei at 67.9%, Korea at

55.3% and Thailand at 51%.”42 In the 1990s, the same impact continued where “Taipei at 77.8%,

India at 61.1% and the Philippines at 58.3%.”43 Then in 2000s, service made contribution in “the

Philippines at 62.8%, Indonesia at 56.4% and Pakistan at 55.3”44 They both concluded that as the

economy grows, the service sector becomes larger and therefore overall growth depends more on

the performance of the service sector. Mitra (2013) provided three key factors for this, “The

Philippines is a prime example of a country that successfully developed a sizeable BPO export

industry in 2000s. As of 2012, IT services and BPO combined generated $13B in export revenue

and directly employed 777,000 people.”45 The second factor is “tourism (which has) traditionally

been the largest sources of service revenues. Tourism did rather well in the 1970s and early 1980s.

Then growth has been more substantial from the mid- 2000s and onwards as international tourists

arrivals grew from 1.9 million on 2003 to 4.2 million in 2012.”46 Finally, the third factor our

unsung heroes—the Overseas Filipino Workers. “Remittances recorded and routed through banks

rose from about $2B in 1990 to $6B in 2000 and to $21B in 2001. As of 2012 they stood at $23B

compared to $2B in FDI.”47

In conclusion therefore, the graph has significantly projected the image of how the Philippines has

transitioned from an agricultural economy to a service economy. The GDP share of agriculture

compared to service has declined over a period of more than two decades. There are reasons for

the decline, as it is also present in other Asian countries, however, there are also multiple

opportunities that the country can leverage to develop and sustain economic growth. On page 33

of In Pursuit of Inclusive Growth The Philippine Development Plan 2011- 2016 has captured

the very sentiment of change that each patriotic Filipino fights for, “This Plan is built on the

conviction that such obstacles can be cleared and the above historic task accomplished in this

lifetime through the prudent marshaling of available resources, the participation and support of all

sectors, and through government and citizens living out and practicing the country’s best civic

ideals. Nor should it be forgotten that today’s chances were purchased by past sacrifices: by

overseas workers who endured separation from their families; by laborers and farmers who

experienced wrenching structural changes; by the middle class and other taxpayers who shouldered

the debt burdens of the past; by government personnel who soldiered on professionally despite the

rot surrounding them; and by the brave and vigilant citizenry who never lost faith in constitutional

values, democratic processes and the possibility of an honest government.”

41 Page 8, The Service Sector in Asia: Is it an Engine of Growth, Donghyun Park and Kwanho Shin, ADB, 2012. 42 Ibid. Page 19. 43 Ibid. Page 19. 44 Ibid. Page 19. 45 Page 5, Leveraging Service Sector Growth in the Philippines, Raja Mitra, ADB, 2013. 46 Ibid. Page 13. 47 Ibid. Page 17.



OTHER REFERENCES

1. King, P. Asian Development Bank. National Sustainable Development Planning, Manila,

December 2001.

2. International Labour Organization. Decent Work in South- East Asia and the Pacific, New

Zealand, 2003.

3. International Labour Organization. Tripartite Validation Workshop of the Philippines

Decent Work Country Profile, Manila, 2012.

4. Reyes, Celia. The Poverty Fight: Has It Made an Impact? Philippines Institute for

Development Studies, 2003.

Education

Poverty and Decent Work- The Effects of Globalization