Employment Sector Employment Working Paper No. 135 2012 Local governance and the informal economy: Experiences in promoting decent work in the Philippines Reginald M. Indon Sandra O. Yu Employment Policy Department Copyright © International Labour Organization 2012 First published 2012 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, sh ort excerpts from them may be reproduced without authorization, on condition that the source is indicated . For rights of reproduction or translation, application should be made to ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit http://www.ifrro.org to find the reproduction rights organization in your country. ILO Cataloguing in Publication Data Indon, Reginald M; Yu, Sandra O Local governance and the informal economy : experiences in promoting decent work in the Philippines / Reginald M. Indon, Sandra O. Yu ; International Labour Office, Employment Sector. - Geneva: ILO, 2012 (Employment working paper No.135) ISSN: 1999-2939 ;1999-2947 (web pdf)) International Labour Office local economic development / informal economy / Philippines 03.02.3 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the l egal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. 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Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit our website: http://www.ilo.org/publns Printed in Switzerland ii Preface The primary goal of the ILO is to contribute, with member States, to achieve full and productive employment and decent work for all, including women and young people, a goal embedded in the ILO Declaration 2008 on Social Justice for a Fair Globalization ,1 and which has now been widely adopted by the international community. The integrated approach to do this was further reaffirmed by the 2010 Resolution concerning the recurrent discussion on employment 2. In order to support member States and the social partners to reach this goal, the ILO pursues a Decent Work Agenda which comprises four interrelated areas: Respect for fundamental worker’s rights and international labour standards, employment promotion, social protection and social dialogue. Explanations and elaborations of this integrated approach and related challenges are contained in a number of key documents: in those explaining the concept of decent work, 3 in the Employment Policy Convention, 1964 (No. 122), in the Global Employment Agenda and, as applied to crisis response, in the Global Jobs Pact adopted by the 2009 ILC in the aftermath of the 2008 global economic crisis. The Employment Sector is fully engaged in supporting countries placing employment at the centre of their economic and social policies, using these complementary frameworks, and is doing so through a large range of technical support and capacity building activities, policy advisory services and policy research. As part of its research and publications programme, the Employment Sector promotes knowledge-generation around key policy issues and topics conforming to the core elements of the Global Employment Agenda and the Decent Work Agenda. The Sector’s publications consist of books, monographs, working papers, employment reports and policy briefs. 4 The Employment Working Papers series is designed to disseminate the main findings of research initiatives undertaken by the various departments and programmes of the Sector. The working papers are intended to encourage exchange of ideas and to stimulate debate. The views expressed are the responsibility of the author(s) and do not necessarily represent those of the ILO. José Manuel Salazar-Xirinachs Executive Director Employment Sector 1 See http://www.ilo.org/public/english/bureau/dgo/download/dg_announce_en.pdf 2 See http://www.ilo.org/public/libdoc/ilo/2010/110B09_108_engl.pdf 3 See the successive Reports of the Director-General to the International Labour Conference: Decent work (1999); Reducing the decent work deficit: A global challenge (2001); Working out of poverty (2003). 4 See http://www.ilo.org/employment. iii Foreword The need for localized approaches to decent work has gained importance as globalization created challenges and opportunities to all sectors of society. Mobility of labour, capital and products has had an enormous impact on local economic prospects and local resources. Globalization has also led to new insecurities, which cities and municipalities are increasingly pressured to address. Capital and investments relocate with relative ease to places with locational advantages. Individual security is weakened by flexible work arrangements, reduced social spending, and erosion of family and social networks. These trends have increased the importance of cities and municipalities, firstly, to strengthen their locational strengths and strategic policies for investments and employment and, secondly, to mediate the provision of social security and of public goods. Thus, recent years have seen a prominence of global frameworks that look into drivers of economic performance at the subnational level, for instance. through competitiveness and doing business surveys. Many cities and local governments thus take the across-the-board approach of creating investment friendly cities. Others have provided more targeted incentives for industries and created social infrastructure that build the capacity of its citizens to be active participants of the economy, such as through health protection, training for specific categories of unemployed, market and road links that connect poor communities to dynamic urban centers. In countries with a huge proportion of informal work, local governance units are critical in that they comprise the first level of contact for those who work in homes, streets, markets and farms. These workers are most affected by the choice of local industries that are promoted, by the quality and service of local health units, by the difficulty or ease of obtaining business licenses, and by the decisions on physical and social investments. Notably, the Director General’s Report to the International Labour Conference (ILC) 2002, entitled Decent Work and the Informal Economy, acknowledged that municipalities and local governments constitute one of the crucial intervention points to address decent work deficits, these being most immediate to the working population. The Employment Policy Department, together with its field offices, supports the development of country employment strategies within a comprehensive perspective that includes analysis of macro-economic policy, sectoral strategies, focus on particular target groups, youth, women and local employment strategies. Its main objective is to advocate for the inclusion of employment as a central goal of national and global economic and social policy agendas. It supports the design and implementation of appropriate strategies to achieve this goal. The Department’s work is guided by the ILO’s Decent Work agenda , the Global Employment Agenda (GEA) and the Employment Policy Convention, 1964 (No.122) . This report, “Local Governance and the Informal Economy: Experiences in Promoting Decent Work in the Philippines,” illustrates how economic development can be promoted in local jurisdictions and presents a number of strategies carried out in the Philippines. It particularly shows how the powers and functions of local governments are used to advance decent work, especially in extending formal mechanisms of recognition and protection to workers in the informal economy. v This report takes a decent work perspective in that it describes how policymakers were able to rally local functions, not only to revitalize local economies and employment opportunities, but also to deliver health protection, workplace safety, and social dialogue mechanisms. It takes off from the important premise that employment promotion requires not only economic growth, but an integrated web of support that allows people to achieve the aspirations they have for their working lives. It also rests on the belief that while national governments have the critical role of framing development policies, it is at the subnational levels where they are delivered and where the signals concerning