Policy Coherence Forum

Date: 11 – 12 March 2010

Venue: Makati City, Philippines

Background

Like most economies in Asia, the Philippines seems to be well weathering the global financial and economic crisis, the worst global downturn since the Great Depression. The country experienced slightly positive economic growth in 2009 and forecasts for 2010 are in the range of 3-4 per cent. Exports are starting to pick up, after the sharp decline of the earlier months. International reserves are growing and the country enjoys a solid current account surplus. Filipino banks and large conglomerates are registering hefty profits and the Stock Exchange is up. In the labour market, the numbers of those who are officially registered as unemployed has not increased as dramatically as expected.

Those outcomes are the results of sound monetary policy and a timely fiscal stimulus package, which helped sustain domestic demand through a blend of investment in infrastructure, tax cuts and social transfers. They also reflect the resilience of remittances from overseas workers as well as the distinctive strength of a few industries – the growth of business processing outsourcing (BPO), for instance, maintained its momentum even in the midst of the crisis.

A full assessment, however, should take into account the fact that per capita income did decline. Albeit positive, economic growth in 2009 (0.9%) has been lower than population growth (around 2%) and the increase in the working age population (2.4%). On the economic front, private investment remains at very low levels and micro and small and medium-sized enterprises, which account for the bulk of the employment, remain vulnerable and face multiple obstacles to the expansion and upgrading of their activities. On the labour market front, adjustment to the downturn has mainly taken the shape of reduction in working hours and workers’ earnings, with a deepening of shift towards employment in services away from manufacturing. There are widespread signs of underemployment, increasingly informal labour markets and exacerbating vulnerabilities. According to World Bank estimates, about 1,4 million people might have fallen into poverty as a result of the crisis, adding to the almost 30 million who already live in distress.

The increases in workers’ hardship, informality and poverty are unlikely to be reversed in the current scenario of slow-to-moderate global economic growth. There is a need for a strong national policy initiative aimed at strengthening employment creation and productive investment while setting foundations for a progressive extension of basic social protection to all. Failure to act would leave Filipino society vulnerable to recurrent crises – from economic shocks, rising prices of food and fuels and natural disasters - that have permanent scarring effects especially on those most disadvantaged. In turn, this would hamper prospects for broad-based and sustainable economic growth and prosperity.

This policy coherence forum is organized under the auspices of the United Nations Task Force on the Global Crisis in the Philippines. It builds on the partnership between the ILO and the Department of Labour and Employment. Its goal is to provide a platform for national and international agencies, social partners and other policymakers in the Philippines to generate and exchange ideas for policy development and coherent action.

The forum takes the prompt policy response to the global economic crisis as a point of departure. It draws from the on-going experience and the proposals of national and international agencies engaged in promoting employment, livelihood and social protection programmes. It calls for coordination and convergence. It makes an attempt to learn lessons to be taken into account in the development of new policies and programmes. In the wake of the crisis, there is a vigorous debate on the cyclical policies and the structural reforms needed to set the Philippines on a path to sustainable, inclusive and balanced growth. Employment and social protection are critical components to any solution.

The forum is part of the initiative of the ILO in collaboration with the UN-System and international donors to prompt more coherent national programmes for job-rich recovery under the framework of the Global Jobs Pact.

Objectives

1. To gain a better understanding of the immediate and long-lasting labour market impact of the global economic crisis in the Philippines

2. To review the policy responses given so far and learn lessons as it concerns good practice as well as areas for improvement, upscaling and replication

3. To consider new policy initiatives to encourage stronger employment generation, improved social protection and more effective labour market institutions

4. To promote knowledge sharing, synergies and collaboration across national and international development agencies and policy makers

5. To identify priorities and formulate recommendations for policy reforms to support sustainable, inclusive and job-rich growth.

Participants

National key policy actors, including officials of the relevant government agencies; representatives of workers and employers organizations; local government officials; international and national experts, researchers and academics; civil society organizations; ILO specialists and specialists from UN agencies, international financial institutions and donors.

Content and methodology

The meeting will be highly participatory. Participatory facilitation techniques will be used to encourage interaction among participants.

The introductory session will allow for informal discussion about expectations and concerns among small groups of participants.

Two expert panels will address the key issues concerning respectively labour market overview and macroeconomic scenarios/strategies

Two tracks of parallel breakout groups (BOG) will be used to tackle specific questions and make suggestions for concrete policy initiative (two questions each for two tracks)

- Track 1 – Employment Creation

1.1 Coping with recurring emergencies through employment and livelihood programmes

1.2 Optimizing LGU support to local economic development

- Track 2 – Social Protection

2.1 Proposal for an Unemployment Insurance Scheme

2.2 Towards basic social protection for all

Two plenary sessions will be held to share the results of the BOG among all participants

One Open Space session will be used to allow participants to discuss specific issues they consider important

One concluding panel will be used to distil main messages and recommendations.

Inputs

- Technical Note Labour Market in Crisis by Amelita King-Dejardin, ILO

- Crafting Coherent Policy Responses to the Crisis in the Philippines by Fernando Aldaba and Reuel Hermosos, Ateneo de Manila University

- The Philippines in the global economic crisis: The social and local dimensions by Lourdes Kathleen Santos, ILO

- Global Crisis Transmission and Local Policy Responses Philippines Cases by Jude Esguerra, Institute for Popular Democracy

- Social Protection in Case of Unemployment by Axel Weber, ILO consultant

Expected Outputs

- Greater awareness of the visible and invisible social costs of the crisis

- Greater awareness of the potential for collaboration among agencies

- Lessons from Comprehensive Livelihood and Emergency Employment Programme (CLEEP)

- Advocacy for the Unemployment Insurance Scheme

- Advocacy for LGU Local Economic Development (LED) training programme

- Inputs to the Medium Term Philippine Development Plan (MTPDP)/Inputs to Decent Work Country Programme (DWCP)

- A main ILO report