Informal economy

Opening address at the ITCILO Workshop on “Transition from informal to formal economy: Awareness raising on R204 towards designing an integrated policy framework in the Philippines”

By Mr Khalid Hassan, Director, ILO Country Office for the Philippines at the ITCILO Workshop on “Transition from informal to formal economy: Awareness raising on R204 towards designing an integrated policy framework in the Philippines”, Manila, Philippines, 11 July 2018

Statement | Manila, Philippines | 11 July 2018
  • Secretary Maza, represented by Mr Saludo of the National Anti-Poverty Commission;
  • Assistant Secretary Fajardo of the Department of Trade and Industry;
  • Distinguished officials from the Senate, House of Representatives, government, employers’ and workers’ organizations;
  • Colleagues from the International Training Centre in Turin and ILO in Bangkok;
  • Ladies and gentlemen, good morning!
Welcome to this training on ILO Recommendation 204 concerning the Transition from the Informal to the Formal Economy. This training is geared towards designing an integrated policy framework for the Philippines. We appreciate much your presence and participation over the next three days.

We are also grateful to the International Training Centre of the ILO and the National Anti-Poverty Commission (NAPC) for making this event possible. Let me also acknowledge the excellent collaboration with the Department of Labor and Employment (DOLE) and the Department of Trade and Industry (DTI) for the series of activities on informal economy this coming weeks.

ILO Recommendation 204 is the first ever international labour standard on the informal economy. In 2015, it garnered outstanding support from governments, workers and employers’ organizations around the world who voted in favour of it.

As ILO Director-General Guy Ryder said, “it is not just the adoption, putting it into practice is what will really matter.”

The informal economy challenge still remains enormous in the world we live today. It is estimated that more than half of the world’s workforce is trapped in the informal economy.

In Philippines, the informal economy plays a significant and crucial role in job and income generation and represents almost 73 per cent of non-agricultural employment.

While the informal economy seems to provide reasonable economic opportunities, workers and economic units face deeper decent work deficits, which includes poor working conditions, inadequate social protection, lack of rights at work and ‘voice’ through effective representation, longer and irregular working hours, less access to training, and greater job insecurity.

The ILO Recommendation 204 acknowledges that the transition from the informal to the formal economy is crucial to achieve inclusive development through decent work for all. It further contributes to reducing inequalities and ending poverty. It is a very powerful policy tool to achieve the Sustainable Development Goals, specifically Goal 8 on promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

The Recommendation provides guidance to facilitate the transition of workers and economic units but at the same time seeks to promote creation, preservation and sustainability of enterprises and decent jobs in the formal economy; to prevent informalization of formal economy jobs; and to ensure that workers’ fundamental rights are respected.

These are important elements to promote decent work, to advance social justice, and to shape a future that works for all, in the run up to the 100th Anniversary of the ILO next year. Yes, the ILO will mark its Centenary or 100 years in 2019 and we invite you to be a part of this important celebration.

At the national level, there were numerous efforts to address key policy gaps and challenges related to the government’s thrust in addressing informality, as well as strategies and models to operationalize the transition from informal to formal economy.

These initiatives in the Philippines are reflected in the Philippine Development Plan, proposed Magna Carta for Workers in the Informal Economy, National Livelihood Framework and Reforming the Philippine Anti-Poverty Policy, and the implementation of the Kasambahay Law or the Domestic Workers Law.

Challenges remain despite these initiatives as processes are complicated and will definitely take time.

This 3-day training serves as an opportunity for dialogue among national policymakers and implementers to have a better understanding of concepts and framework on informality and the transition to formal economy. Moreover, this training provides a venue to collectively work towards better defining the issues and challenges and identifying solutions.

This is the second batch of the same training conducted in November 2017. The training this year however targets national government agencies concerned in the integrated policy mix on formalizing the informal economy, officials from Senate and the House of Representatives working on the Magna Carta bill as well as workers and employers organizations, and representatives from basic sectors of NAPC.

The training will examine the need for an integrated policy framework, encompassing the ILO’s four strategic objectives, specifically, fundamental principles and rights at work; employment; social protection; and social dialogue based on the national context of each member State for a progressive transition to the formal economy and decent work.

While some innovative approaches to formalizing businesses and employment adopted by member States or social partners will be presented, participants will explore how those examples can be applied to the Philippines context.

The training will contribute to the South-South Global Knowledge Sharing Forum on Enterprise Formalization, taking place next week. The forum will host high level experts from Brazil, Chile, Uruguay and India to discuss innovations and lessons learned on enterprise formalization in their countries, and to exchange good practices with the Philippines on ways to replicate initiatives.

With that said, it is my hope that we will continue to work more closely towards bringing significant impact on the lives of workers and thereby contribute to a truly inclusive development in the Philippines.

May you take this opportunity and the presence of various stakeholders for dialogue on measures to promote transition to formal economy, paving the way for the design of an integrated policy framework.

Finally, I wish you all success over the next three days of this training, and continued collaboration thereafter to help millions of workers to move out of informality through decent work.

Thank you!