- Secretary Maza of the National Anti-Poverty Commission (NAPC);
- Secretary Bello represented by Director Trivilla and officials of the Department of Labor and Employment (DOLE);
- Undersecretary Maglaya represented by Assistant Director Opena and officials of the Department of Trade and Industry (DTI);
- Our constituents representing government, workers’ and employers’ organizations;
- Distinguished officials from the Senate, House of Representatives,
- The Global South experts from Brazil, India, Chile and Uruguay;
- ILO Colleagues from Geneva, Turin, Bangkok and Manila;
- Ladies and gentlemen, good morning!
I hope you enjoy your stay in this beautiful country with the warmth of the Filipino hospitality. To the experts, speakers, partners and delegates from the Philippines, we appreciate much your presence and participation.
Ladies and gentlemen. Today’s gathering may be something new to many of you.
First, the focus of this forum is not just informal sector but also its formalization.
Second, the combination of policy areas for discussion is also new and we have the presence of high level officials from the Central Bank, the Department of Finance, the Public Procurement Board. They are non-traditional partners, but important actors when it comes to policies on the informal economy.
The informal economy is huge and has become a top concern of the Global South today. More than half of the world’s employed or two billion people are trapped in the informal economy based on ILO estimates in April this year.
Informal economy is pretty much a phenomenon of the Global South.
Looking at data on the informal economy, there are 86 per cent in Africa; over 70 per cent in developing and emerging economies of Asia & the Pacific; little less than 70 per cent in the Arab States, and over 50 per cent in Latin America.
In contrast, the informal employment ratio is less than 20 per cent among developed economies of the North. Naturally, the knowledge in this area is generated and shared South-to-South. Later, you will hear more about this modality in a video message of a colleague from ILO Geneva.
The right thing to do is to move people from informality to the formal economy and to leave no one behind. This concept of inclusive development is part of the Sustainable Development Goals and also a central element of the Philippine Development Plan.
Given the vast size of the informal economy, tackling the informal economy challenge is key to determine whether development is truly inclusive. This test for inclusivity is vital for it is not just the level of economic growth, but how individuals and societies benefit from such growth.
Concerns on achieving inclusive growth and sustainable development, while reducing poverty and inequality is among the reasons behind the growing consensus on ILO Recommendation 204 on Transition from the Informal to the Formal Economy.
ILO Recommendation 204 is the first ever international labour standard aimed at tackling the informal economy, which gained outstanding support and garnered majority of votes in 2015 from governments, workers and employers organizations around the world.
ILO Recommendation 204 is a game changer because it shifts traditional focus of informal economy policies towards formalization. This means formalizing both informal economic units and informal jobs.
Is it possible to move people from informal to the formal economy? Many countries have worked for decades to promote rural livelihood and micro, small and medium enterprise development. They have been working on the reform of business registration and licensing system, too. The end result is not very encouraging, and challenges remain. Policy innovations are crucial, and should be a novel mix.
ILO Recommendation 204 offers for the first time guidance of facilitating transition. It takes into account promising cases and evidence-based policy recommendations. The guiding principles of Recommendation 204 have been inspired by successful country good practices and experiences, which will be shared as part of this forum. We are grateful to our four experts from champion countries of Latin America for joining this forum.
The ILO supports member States in implementing the Recommendation in different country contexts. The early success of selected Latin American countries has led the ILO to come up with an integrated approach. When it comes to enterprise formalization, the most relevant policy areas include:
- business entry reform,
- simplified regime on tax and social security, particularly for micro and small enterprises,
- access to public procurement,
- access to inclusive financial services,
- access to entrepreneurship training, skills training and Business Development Services, and
- access to social security coverage.
Formalization of the informal economy is now one of the ten global priorities of the ILO, which is led by its global coordinator, Mr Philippe Marcadent who is with us for this forum. It is an important priority leading to the ILO Centenary next year. Yes, the ILO will turn 100 years in 2019. This forum is indeed an opportunity to learn more and to work together.
The Philippines is the host country given its initiatives. Together with India, the Philippines has been a strong advocate and source of innovations within Asia and the Pacific. The Philippines is also the first country in Asia which adopted the ILO Domestic Workers Convention and have the Kasambahay or Domestic Workers Law. The Philippines also has a proposed Magna Carta for the Informal Economy, and it is vital to fully align this with the ILO Recommendation 204.
Reforms have taken place such as the Comprehensive Tax Reform Programme, the Ease of Doing Business Act, the financial inclusion strategy, the completion of the Assessment Based National Dialogue on the Social Protection Floor, and the whole-of-government approach to the livelihood interventions, to name a few.
More importantly, tripartism and social dialogue are vital in this forum. In the Philippines, informal economy leaders have a voice along with other sectors through the National Anti-Poverty Commission and the Congress. The Philippines has much to offer, but at the same time to learn from this forum.
We just completed the second in-country awareness raising workshop on Recommendation 204 with participants from government agencies, policy makers, informal economy representatives and the social partners. Some of you have completed the training, and are well prepared for this forum.
Not only the Philippines, but also India, another Asian leader on the informal economy, is implementing a major tax reform, impacting the size of the informal economy, reportedly. We appreciate as well experts on board from India.
We hope that this forum will also be an opportunity to update statistics and policy innovations of champion countries –last update was in 2012-13; provide a face-to-face meeting with experts from champion countries for enhanced support; and develop new knowledge products out of lessons learned on enterprise formalization.
Your voices matter and every discussion counts. As I end, let me thank our partners - NAPC, DOLE and DTI for co-hosting this unique and historic South-South Knowledge Sharing Forum.
Thank you and I wish you a successful forum!