Professional Documents
Culture Documents
Published 2006
ISBN 971-91246-4-4
The UP Third World Studies Center gratefully acknowledges the financial support
given by the United Nations Development Programme-Philippine Office in the
research for and publication of this book.
Foreword
Walden Bello xv
Preface xvii
Introduction
Teresa S. Encarnacion Tadem 1
Index 229
v
vi People, Profit, and Politics
Introduction vii
List of Acronyms
vii
viii People, Profit, and Politics
P
eople, Profit, and Politics is an excellent collection of studies that
looks at how civil-society organizations in economic sectors subjected
to trade liberalization and deregulation have mobilized to defend
their interests within a liberal democratic state. The picture that emerges
is both reassuring and disconcerting.
Reassuring in that civil-society organizations can easily establish
political spaces or beachheads from which to exert pressure on key political
actors in the executive or in parliament. Reassuring, too, in that there is a
great space for coalition building with many other interest groups facing
the challenge of globalization.
But disconcerting in that no amount of skilled mobilizing and coalition
building appears to have been able to save key groups, such as the Benguet
vegetable producers and textile and garment workers, from massive
dislocation brought about by cheap imports or capital flight. Active lobbying
by hog raisers appear to have mainly bought them time, not eliminate the
threat of ruinous competition from cheap imports.
The picture of the Philippine state that emerges is one that allows
significant space for pressure groups opposed to liberalization, to the point
where key actors within both the bureaucracy and parliament can, in fact,
be mobilized as allies. And yet, when push comes to shove, liberalization
wins out. What emerges is a resilient state that can entertain opposition,
but where the ideology of neoliberalism so permeates the bureaucracy and
the legislature that it can override the coalitions and coalition formations
xiii
xiv People, Profit, and Politics
that the threatened sectors can put together. While there certainly is a
domestic pro-liberalization lobby, and the World Trade Organization
(WTO) and the International Monetary Fund (IMF) are important pressure
groups, it seems to be the case that the adoption of trade liberalization
policies owes more to ideological belief among key policymakers and elected
officials than to the organized political clout of these actors.
Thus what we have, at least in the case of economic policies, is a perfect
example of what Gramsci termed “consensus,” in this case, neoliberal
consensus, as the driver of policy. What this seems to indicate is that for
producers, the key to winning the battle is not a superior organizing
capability but drawing up an alternative paradigm that is more convincing
than neoliberalism. This will be no easy task. As many have pointed out,
the overwhelming empirical evidence after 25 years of accelerated
liberalization, both in the Philippines and globally, shows that it has been
accompanied by growing poverty, inequality, and stagnation, even as state-
led protected systems such as Korea and China have progressed by leaps
and bounds. Despite this, neoliberalism remains as entrenched as ever in
the higher rungs of the economic bureaucracies of the Philippine state.
This is, of course, just one lesson that one draws from the case studies
of this book. There are other dimensions of the state-civil society relationship
in the Philippines that are illuminated here. The authors and editors are
to be congratulated for bringing out an indispensable guide to the topic.
Walden Bello
Professor of Sociology
University of the Philippines
Diliman, Quezon City
Philippines
Introduction xv
Preface
T
he idea for this book was conceived way back in 2003 when the
then-director of the Third World Studies Center (TWSC), Miriam
Coronel Ferrer, invited the case authors for a brainstorming session
to prepare a research proposal on the topic “state-civil society relations in
the context of globalization.” The research project would be a fitting follow-
up to the just completed TWSC research on “Philippine Civil Society and
the Globalization Discourse” (which was subsequently published as a book),
and the Center’s previous researches examining the potential of Philippine
civil society as agent of democratization. It was also pointed out in the
session that a research on the topic is significant because at that time no
study has been conducted yet on the nature of interaction between the
state and civil-society actors in an environment shaped by globalization.
Existing studies only deal with the broad effects of economic globalization
on different sectors of the Philippine economy. The writers decided to
focus the study on sectors perceived to be widely affected by globalization:
the vegetable, hog, garment, and telecommunications. A research proposal
was then submitted to the United Nations Development Programme
(UNDP), which agreed to fund the conduct of the research in 2004, and
the publication of the output in 2005.
This project would not have been possible without the assistance of
various individuals and institutions. We like to thank the UNDP for the
financial assistance, and its program manager for governance unit,
Emmanuel Buendia, for his support of TWSC researches. The Social Sciences
and Philosophy Research Foundation (SSPRF) was also on hand to manage
the research and publication funds.
xv
xvi People, Profit, and Politics
T
his research project on state-civil society relations in the context
of globalization analyzes the relations between the Philippine state
and selected civil-society actors in the context of globalization.
It focuses on four sectors: the Benguet vegetable, hog, garment, and
telecommunications industries. These sectors are widely known to have
been affected by economic liberalization—negatively in the case of the
first three, and positively in the case of the telecommunications industry.
The project investigates two interrelated aspects of state-civil society
relations: 1) how civil-society actors engage with official state agencies
through various formal and informal strategies of dialogue, negotiation,
and bargaining; and 2) the extent to which civil-society actors have
been able to influence governmental policy making.
These concerns come in light of studies showing the importance of
the role of a strong and effective civil society as one of the major factors
in furthering development and democracy. While this study does not
assume that a strong civil society is automatically beneficial to
development, it is predicated on the view that civil-society participation
and inputs can make a positive contribution to the policy-making
process.
In the academic literature, for example, it is generally accepted that
there is some kind of relationship between economic development and the
kinds of participatory democracy signaled by the proactive role of civil
society. Some analysts claim that there is a strong association between the
1
2 People, Profit, and Politics
two; others assert that they exhibit a positive linear relationship, while still
others claim this relationship is indeed causal (see Przeworski et al. 2000
for a comprehensive discussion; Sen 2000; Bensabat-Kleinberg and Clark
2000).
These academic claims are also substantiated in the policy statements
of major international development agencies. There is a near-universal
acceptance by agencies such as the World Bank, the Asian Development
Bank, bilateral donors, and the United Nations Development Programme
(UNDP) that democratic forms of policy making and civil-society
participation are integral to effective decision making. Above all, each of
these agencies now subscribes to the notion that stakeholders and
beneficiaries should participate in all stages of the policy and project cycle.
The UNDP, for example, has long been explicit on this point: it suggests
that stakeholder participation and the role of civil society are crucial in
shaping the political and governance contexts in which policy is made and
implemented (UNDP 1993). The creation, in 2000, of the UNDP Bureau
for Resources and Strategic Partnerships to coordinate and nurture UNDP’s
working relationships with civil-society organizations, among others, adds
institutional weight to the participatory approach. Finally, the UNDP book
Partners in Human Development: UNDP and Civil Society Organizations
(2003) suggests important ways to operationalize the partnership among
the international community, states, and civil society.
Beyond these general statements of principle about state-civil society
relations and participatory approaches to development and good
governance, what is needed is a much more empirically grounded research
that can reveal not simply the presence (or absence) of civil-society actors
in policy dialogue but precisely how civil-society actors negotiate and bargain
to open up greater political and policy space and the substance of the
policy outcomes of such engagement. The need, therefore, is for an
assessment of state-civil society relations both as a means (the context in
which policy is negotiated, shaped, and set) and as an end (the
implementation, monitoring, and adaptation of more effective policy).
That the Philippines provides the setting for the study, particularly in
Introduction 3
Defining Globalization
The other important concern of this research is globalization, which is
“the rapidly expanding process through which societies are connecting to
each other through markets and new technology” (Grugel 2004, 29-30).
Social-movement scholars have pointed out that globalization is not a new
phenomenon. While “the world economy had interlocking trade and
investment patterns as early as the 19th century,” what distinguishes today’s
global economy is its neoliberal character, which structures contemporary
transnational content (Ayres 2002, 191). Proponents of neoliberalism argue
that there should be no government intervention with market forces for
economic growth to occur. This is because the neoliberal economic theory
asserts that “the law of free markets is sufficient regulation for an economy
seeking to find sustainable income flows and thus distributes revenues to
the most needy segments of society” (Peters 2000, 6). The view is that
premium must be placed on trade liberalization and the unfettered entry
of foreign investments into any country. Second, globalization with its
emphasis on a free-market economy and privatization seeks to minimize
the role of the state. By doing so, it hopes to put an end to the inefficiency
and corruption that has plagued state-dominated economies as epitomized
by capitalist authoritarian states as well as socialist authoritarian states.
Another tenet of globalization is trade liberalization and the opening up
of the economy to foreign investors.
Critics, however, have pointed out that such a setup does not create a
political opportunity for long-term development. Investors, for example,
can easily fly out of the host country when the latter ceases to provide
them optimum environment for capital accumulation. Moreover, emphasis
on export would give less attention to the development of a domestic mass
following for local products. Although the emphasis on export could create
more employment for the local workforce because of bigger markets abroad,
problems nonetheless arise if importing countries begin to tap other sources
offering better-quality goods at lower prices. The other critique concerns
the class bias of globalization—that is, against the poor. This is because
globalization has intensified economic, social, and political inequalities by
6 People, Profit, and Politics
privileging the private over the public sphere and by marginalizing the
actual, as well as the potential, importance of the commons (Thomas 1997,
6). As noted by its critics, globalization has resulted in the rich countries
growing richer and the poor countries becoming poorer; within the country
itself, the rich are getting richer and the poor are getting poorer. Such a
reality has been a major criticism of the neoliberal development policy
whereby “20 years of liberalization of the world economy has not led to
the generous trickle-down that they have predicted, either in absolute or
in relative terms” (Wilkin 1997, 28). These inequalities are further
perpetuated because globalization allows the private sector, e.g.,
multinational corporations (MNCs), to have unfettered access to the
markets of a developing country. Because of this, there is a real likelihood
that there will be a contraction of wealth that is heavily skewed in favor of
the wealthiest sections of developing countries (Serrano 2001, 9). And
lastly, creating a favorable environment for foreign investors is often
translated to the repression of workers’ wages.
Besides the class bias of globalization, the other issue is concerned
with the quality of life that this economic phenomenon is promoting.
Critics argue that globalization has brought about a rapid development
that threatens the quality of life, and the absence of gender equality despite
the growth in the number of working women (Peters 2000). This stage of
capitalism is also accused of degrading the environment (Callinicos 2001,
116). It also does not help much that the agents of globalization such as
the World Trade Organization (WTO) have accelerated globalization
without social control. The perpetuation of undemocratic WTO rules and
procedures, which have marginalized the majority of the world’s people
who must live with the instability and social degradation (Tabb 2001,
191). Related to this is the critique of the loss of state control of the economy.
The market-based solution, for example, is seen in the bigger context of
globalization’s integrating a national economy into the world’s globalized
free markets. This thus brings about a situation whereby states are left to
have very little control of their economies as seen during the Asian financial
crisis (Peters 2000).
Introduction 7
that has also emerged are global civil societies, which operate at the
international level. Because of this, “many studies of transnational
associations and political contention implicitly or explicitly argue that global
processes are creating an expanded web of interdependence among states,
thereby nesting national institutions within a broader, global framework of
interest and obligations” (Smith and Johnston 2002, 7).
In determining the role which civil society would like the state to play
in an era of globalization, a number of proposals have been put forward.
There are those who argue that governments should not divest themselves
wholly of the provision of essential services such as health and education.
By maintaining a strong presence in civil society, government can still
exercise some influence over the vagaries attendant to a free-market
economy (Peters 2000). There is also a need to create conditions for markets
that empower the impoverished and in the process respond to local
demands. Furthermore, “governments should be encouraged to take a more
active role in the regulation of markets as a means of ensuring that those
who are most vulnerable to fluctuations in financial markets, particularly
those who are living in poverty, can be assured of some means of protection
by a state committed to principles of equity, democracy, and sustainability”
(Peters 2000, 6-7).
inertia.
Theoretical Perspectives on
State-Civil Society Relations
Theoretical Framework of
Political Opportunity Structures
Data Gathering
References
Ayres, Jeffrey. 2002. Transnational political processes and contention against
the global economy. In Globalization and Resistance, ed. Jackie Smith and
Hank Johnston, 191-205. Lanham: Rowman & Littlefield Publishers,
Inc.
Bensabat-Kleinberg, Remonda, and Jenine A. Clark, eds. 2000. Economic
liberalisation, democratization and civil society in the developing world. London:
16 People, Profit, and Politics
Palgrave Macmillan.
Callinicos, Alex. 2001. Against the third way. Cambridge: Polity Press.
Clark, John. 2003. Civil society and transnational action. In Globalizing civic
engagement: Civil society and transnational action, ed. John Clark, 1-28.
London and Sterlina: Earthscan Publishing Inc.
Colas, Alejandro. 2002. International civil society. Cambridge: Polity Press.
Fox, Jonathan A., and L. David Brown. 1998. The struggle for accountability:
The World Bank, NGOs and grassroots movements. Cambridge and London:
The Massachussetts Institute of Technology Press.
Giugni, Marco G. 1998. Was it worth the effort? The outcomes and
consequences of social movements. Annual Review of Sociology 98: 371-
93.
Grugel, Jean. 2004. State power and transnational activism. In Transnational
activism in Asia: Problems of power and democracy, ed. Nicola Piper and Anders
Uhlin, 26-42. London and New York: Routledge.
Habito, Cielito. 2005. State-civil society relations in the context of globalization:
A review. Draft manuscript. UP Third World Studies Center and United
Nations Development Programme.
Hearn, Jonathan. 2001. Taking liberties: Contesting visions of the civil society
project. Critique of Anthropology 21 (4): 339-60.
Kamrava, Mehran, and Frank O Mora. 1998. Civil society and democratization
in comparative perspective: Latin America and the Middle East. Third World
Quarterly 19 (5): 893-916.
Ku, Agnes S. 2002. Beyond the paradoxical conception of “civil society without
citizenship.” International Sociology 17 (4): 529-48.
Meyer, David S. 2003. Political opportunity and nested institutions. Social
Movement Studies 2 (1): 17-35.
McAdam, Doug, John D. McCarthy, and Mayer Zald, eds. 1996. Comparative
perspectives on social movements. Cambridge: Cambridge University
Press.
O’Connell, Brian. 2000. Civil society: Definitions and descriptions. Nonprofit
and Voluntary Sector Quarterly 29 (3): 471-78.
Peters, Chris. 2000. An assessment of the ADB’s poverty reduction strategy paper.
Freedom from Debt Coalition document. October.
Petras, James. 2003. The new development politics: The age of empire building and
new social movements. England: Ashgate Publishing Limited.
Przeworski, Adam, Michael E. Alvarez, Jose Antonio Cheibub, and Fernando
Introduction 17
G
uided by the theory of comparative advantage, the Philippines
liberalized trade in agriculture through the ratification of various
international accords such as the General Agreement on Tariffs
and Trade-Uruguay Round (GATT-UR) and the Association of Southeast
Asian Nations Free Trade Area (AFTA) as a means of spurring growth in
the sector through increased productivity and access to foreign markets.
However, in a country where agriculture remains economically important,1
in spite of government’s traditional bias against the sector, the opening up
of the domestic market to foreign agricultural commodities was regarded
as a guaranteed recipe for failure. Central to the opposition to trade
liberalization is the removal of quantitative restrictions (QRs) on imports
and decrease in tariff rates of imported goods, which facilitate the incursion
of cheaper, often subsidized, goods, displacing Filipino farmers’ sizeable
share in local markets.
Amid protestations against the merits of free trade in agriculture
was guarded optimism for the vegetable industry. With its growth
potential in exports, vegetables ostensibly offer economic opportunities
to Filipino farmers. Economists have championed vegetables to be
among the “gainers” from trade liberalization as agricultural production
and trade shift from traditional to high-value crops, owing to the
country’s favorable climate, which makes it possible to produce different
kinds of vegetables all year round.2
19
20 People, Profit, and Politics
channel, farmers are reliant on traders who dictate the farmgate prices of
their produce, which are usually low.9 High costs of packaging their produce,
high rental of stalls and stands, low quality of products, limited research
and development, lack of modern/appropriate marketing technology and
varieties, and weak (or lack of ) producer organizations that could effectively
market the vegetables directly to the consumers are also challenges that
farmers deal with (Aquino 2003). Adding to these supply-side factors is
the declining share of vegetables in household food expenditures.10
Due to its geographic location, the province of Benguet is also
vulnerable to natural disasters. In July 2001, one of the worst tropical
storms to hit the Philippines—Feria (Utor)—struck Northern Luzon,
destroying infrastructure and devastating rice and vegetable farms. Trade
was disrupted in Benguet, as the province was temporarily isolated due to
landslides and floods, which rendered major routes impassable. The
calamity created a shortage in the supply of semitemperate vegetables,
inducing traders and retailers to seek alternative sources to meet the
demands of the markets and consumers. This opened a Pandora’s box, as
what started as an emergency or stopgap scheme developed into a recurrent
then finally permanent practice.
Not fully recovered from Feria’s rampage, Benguet faced another
outpouring—this time, of cheap and high-quality imported vegetables.
Since 2001, farmers in Benguet have been articulating that the scourge of
cheap imports has become the main threat to their livelihood, if not to
their very chance of survival. Indeed, from the last quarter of 2001 to
2002, the farmers of CAR, especially Benguet, suffered, as the country
imported about USD 6.4 million (PHP 328.7 million) worth of fresh/
chilled vegetables as compared to USD 5.8 million (PHP 295 million) the
previous year, according to figures from the National Statistics Office
(NSO). In general, imports grew by 3 percent on volume and 10 percent
on value. Notable is the 1,925 percent growth in quantity for carrots, 102
percent for head lettuce, 97 percent for cauliflowers and headed broccoli,
and 94 percent for cabbage, from 2001 to 2002; all of which are also
produced locally (table 1). Data provided by the NSO and the Philippine
Table 1. Volume (in kilograms) and percentage growth from previous year 24
of selected imported semitemperate vegetables, 1998-2003
Commodity 1995a 1999b 2000 2001c 2002 2003ad 2003be 2004f 2005
Potato
In-quota 40 45 45 45 40 35 40 40
Out-quota 60 60 60 50 40 40 40
Cabbage
In-quota 40 30 30
Out-quota 100 60 60 60 50 40
Cabbage lettuce (head lettuce) 40 15 10 10 7 7 25 25 25
Carrot 40 15 10 10 7 7 25 40 40
Cauliflower and headed broccoli 40 15 10 10 7 7 25 25 25
Witloof chicory 40 10 7 3 3 3 20 20 20
Turnip 40 15 10 10 7 7 20 20 20
Peas 40 15 10 10 7 7 20 20 20
People, Profit, and Politics
Beans 40 15 10 10 7 7 20 20 20
Asparagus 40 15 10 10 7 7 10 10
Celery 40 15 10 10 7 7 20
Mushrooms 40 15 10 10 7 7 10 10
products that are not locally produced are as low as possible while the
tariff rates on products that are locally produced are adjusted upward (see
Aldaba 2005).
Given this analysis, the strategy is to pressure the executive to increase
tariff rates as a short-term response, while maximizing the potentials of
Congress in advocating for policies and laws intended to protect small
farmers from the onslaught of further trade liberalization, such as safety
nets, coupled with a recalibration of the tariff program for agriculture.
There are unique features of the trade policy environment that have
provided civil society, in the past and at present, challenges in advancing
its advocacies through engagement with the state, especially in relation to
the institution of protective mechanisms for vulnerable and weak sectors.
To begin with, the predominance of the neoliberal ideology among
crucial policymakers is a powerful obstacle to the acceptance of an alternative
framework for trade and industrial policy. This tenet is not only tenaciously
adhered to but also nurtured by like-minded academic experts, think-tanks
Mobilizing against Vegetable Importation 33
Traders’ Organizations
Benguet Vegetables Distributors’ Cooperative, Inc.
Early Bird Traders’ Association
La Trinidad Vegetable Trading Post Association
Bagsakan Traders’ Association
La Trinidad Booth Holders Association
of the vegetable crisis and globalization was within the indigenous peoples’
framework, arguing that Benguet farmers should not be regarded as ordinary
peasants but as indigenous peoples. The issue then boils down to the
question of land. Essentially, SAC is not concerned about the incursion of
imported vegetables in the country. Rather, it is alarmed by the policies
and programs that the government has fashioned to mitigate its impact on
and enhance the competitiveness of the industry—agricultural
modernization through the Agriculture and Fisheries Modernization Act
(AFMA). Specifically, SAC is opposed to crop programming or zoning
being introduced to vegetable farmers to sustain the supply and meet the
high-quality standards of the consumers, the principal deficiency being
leveled against vegetable farmers.21
Through the basic ecclesial communities, SAC also organized their
own farmers’ groups; educated them on GATT, AFMA, and the Indigenous
Peoples Rights Act (IPRA); and built their capacity to engage government
at the grassroots level. After which, a farmers’ congress was held where
recommendations were put forward, targeting the only branch of
government where laws such as GATT can be revoked, where policies such
as IPRA, albeit inadequate, can be strengthened, and where new legislative
measures can be introduced to protect farmers as indigenous peoples—the
Philippine Congress. On the other hand, SAC and the farmers’ groups
realize that the local officials, through the Provincial Board, can also enact
policies for the benefit of the farmers. But most of their engagement with
the local government and the line agencies in the province was to support
and expedite the awarding of Certificate of Ancestral Domain Titles and
Certificate of Ancestral Land Titles, in view of the DA’s move toward crop
programming.
Ultimately, though, civil society understood the limited capacity of
the local government to respond to the problems of the vegetable industry.
Local governments are also victims of the systemic adoption of the neoliberal
ideology. Their hands are also tied to the whims of the national government
(Cosalan, Tobias, and Yano 2004). The bottom line, therefore, was to elevate
the issue and engagement to the national level.
40 People, Profit, and Politics
Department of Agriculture
Interaction with the DA was based on three lobbying points:
1) investigation of permits to import (PTI) issued by the Bureau of Plant
Industry (BPI), 2) increase in tariff rates of imported vegetables, and
3) provision of safety nets for the industry. But the course of their
engagement traversed three leaderships, each offering them different
opportunities and priorities for action.
In October 2002, at the height of importation, Agriculture Secretary
Leonardo Montemayor ordered the immediate implementation of RA
8800, which intends to protect local agricultural products against import
surges in view of the reported entry of vegetables from foreign sources,
Mobilizing against Vegetable Importation 41
and at the same time actively support the initiatives of the local vegetable
industry led by the Benguet vegetable industry stakeholders (DA 2002).
Montemayor, known for his knowledge and understanding of the concerns
of small farmers as a former peasant representative in Congress, was
immediately identified as a possible ally in the bureaucracy. However, later
that year, Luis Lorenzo took over the post. The change in leadership at the
height of importation dampened the spirits of civil society. The farmers
had reservations in engaging an agribusiness magnate. In an attempt to
appease the disgruntled, Lorenzo pledged to focus on core programs in
favor of small farmers and fisherfolk. He immediately conducted
consultations with vegetable farmers and officials from Benguet regarding
DA’s proposal to the Tariff Commission to apply the maximum bound
rate of 40 percent to vegetable imports and to include twenty vegetable
products under the sensitive list of commodities (Mendoza 2004). In
addition, under his administration, the DA expedited the Benguet Cold
Chain Project, expected to address postharvest losses and the quality of
Benguet vegetables. However, in July 2004, Lorenzo resigned and was
replaced by Arthur Yap, a move that anti-smuggling groups found adverse
due to Yap’s suspected involvement in technical smuggling (Mendoza 2004).
Yap’s reputation preceded him and this became a major deterrent for civil
society’s engagement with the DA.
Although civil society found Montemayor and Lorenzo sympathetic
to their concerns and recommendations, they saw a staunch supporter
through Undersecretary Ernesto Ordoñez due to his instantaneous response
to the problem of importation (Alangdeo 2004; Kim 2004). Ordoñez was
active in bridging the gap between the agency and civil society. His initial
approach, however, was to engage in battle through the media (Fongwan
2004). In any case, Ordoñez became their key person in influencing
decisions in the DA.
The BPI, in contrast, was very different. Civil society was at odds with
its head, Blo Umpar Adiong, from the start. Adiong had been blamed for
the unabated importation of vegetables, due to a series of defective import
clearances that were unearthed by the traders. But what aggravated Adiong’s
42 People, Profit, and Politics
Bureau of Customs
The stakeholders understood that anomalous import permits did not
complete the smuggling equation. The BoC, the agency supposed to be
on top of monitoring the importation of goods among other things, was
the core of much of the engagement of the traders’ groups led by the Benguet
Vegetable Distributors’ Cooperative, backed by Councilor John Kim. The
BoC did not deny the incidence of smuggling, but downplayed the extent
of revenue losses, which the traders found insulting to the Benguet
stakeholders (Alangdeo 2004). At the start of the engagement, the BoC,
where corruption is an open secret, was very hostile to civil society.
However, with Ordoñez endorsing their actions, the traders were able to
penetrate the agency (Kim 2004; Alangdeo 2004), but were limited to the
acquisition of documents in order to study the magnitude of the problem.
As their engagement persisted, the traders’ participation in the
antismuggling operations of the agency was institutionalized in 2003
through various memoranda stating that examination of refrigerated
shipments of fruits and vegetables should be conducted in the presence of
a representative from the La Trinidad Trading Post Association, along with
other concerned organizations. Likewise, they were witness to the
condemnation of seized container vans and actual destruction of confiscated
vegetables.
Of note were other parallel initiatives of the traders to control
smuggling. Following the creation of an ad hoc interagency body, Task
Force Blue Collar,25 to investigate and monitor points of entry of smuggled
Mobilizing against Vegetable Importation 43
Tariff Commission
The Tariff Commission conducted two public hearings26 in view of
the petition filed by the DA, along with food crops manufacturers and
importers, local government officials of Benguet and Mountain Province,
and farmers led by the Bad-ayan Buguias Development Multipurpose
Cooperative, to increase up to the maximum bound levels the tariff rates
on certain vegetables and root crops.
During the public hearings, the challengers27 fought for the existing
7-percent tariff rate. Armed with statistics from various sources, one of
which from the Bureau of Agricultural Statistics (BAS), the parties against
the petition argued that contrary to popular opinion, the volume of legally
imported vegetables was in fact declining, which naturally made smuggling
the real problem. Thus, inept customs implementation, rather than low
tariffs, was the issue that must be resolved. The importers further contended
that higher tariffs would only provide greater incentive to smuggle. Unable
to make a precise distinction between legally imported and smuggled
vegetables, and demonstrate that the former was indeed the cause of the
domestic vegetable industry’s bankruptcy, the DA’s argument for a tariff
rate increase did not hold water. The Tariff Commission struck down the
proposal and recommended to the cabinet and the interagency Tariff-
Related Matters (TRM) to maintain the status quo at 7 percent.
Mobilizing against Vegetable Importation 45
Legislature
The media hype over the Benguet vegetable industry’s imminent demise
due to trade liberalization resulted in the filing of three separate resolutions
in the Twelfth Congress—House Resolution (HR) 834 by Imee Marcos,
HR 879 by Satur Ocampo, and HR 894 by Oscar Gozos—to conduct an
inquiry into the importation and alleged smuggling of vegetables. The
relentless lobbying of like-minded legislators, mainly from party-list groups
such as Representatives Loretta Rosales of Akbayan and Satur Ocampo of
Bayan Muna, in tandem with a privilege speech delivered by Benguet solon
Samuel Dangwa underscoring the impact of vegetable importation on the
livelihood of the farmers, gave the problems of the vegetable industry ample
space in the legislative arena. In the Senate as well, Senator Manuel Villar
introduced two resolutions, Senate Resolution (SR) 464 and SR 258,
46 People, Profit, and Politics
Political Opportunities
dissident groups, how then was civil society able to permeate the state?
In the case of the Benguet vegetable industry, the presence of influential
allies, particularly the elite, became vital. In situations where
opportunities are not favorable or hostile, such as the insulated trade
policymaking and implementation bodies, allies may be useful for
prying open these institutions and ensuring that inputs of civil society
are not merely noted but incorporated. Hence, these allies, who
commiserate with or support the objectives of civil society, usually have
the political influence and resources that movements lack—and in some
cases, moral authority—which are particularly important during formal
policy deliberations.
A close look at the engagement process discussed earlier would
evidently suggest that powerful allies consisted both of officials at the
local (Fongwan, Kim, Molintas, Sacla, and Uy) and at the national
levels (Montemayor, Ordoñez, Rosales, and Ocampo) levels; and
important figures in Philippine civil society (Tañada, Mariano, and
the church as an institution). Although the former are part of the state
apparatus and members of the polity, most of them can be considered
as institutional activists.30 They assured civil society of open channels
for dialogue and facilitated interaction with well-disposed key
individuals. Some of the allies are party to the engagement process as
well, which implies that the persona of the leader determines how a
government agency is responsive to civil society. Certainly, they have
their own motivations and self-interests (e.g., to further their political
careers) in supporting the organization and advocacy of civil society
involved in the concerns of the Benguet vegetable industry. Hence, for
civil society, seizing such opportunities could be tantamount to allowing
themselves to be used, wittingly or unwittingly, by certain narrowly
motivated parties or sectors with self-serving interests. Nonetheless,
civil society seized the opportunities posed by their individual desires
and they were pivotal in terms of influencing the outcome of
engagement. Furthermore, it is important to note the high degree of
trust and confidence afforded to officials at the local level, something
Mobilizing against Vegetable Importation 51
that may hardly transpire at the national. Trust is not necessarily sine
qua non in state-civil society engagement, but farmers and traders
counted on their personal relations with all their key allies, as patrons
and friends. Thus, instinctively, the stakeholders singled them out as
supporters, subscribing to their analyses and positions of the issue.
Electoral instability
The national elections were contributory to the moderate success of
state-civil society engagement in the vegetable industry. It was a coincidence
that civil society engaged the state at the time when cleavages within the
political elite were prominent, but not solidly frozen, thereby creating a
highly volatile situation for the electorate. This unpredictability encouraged
political elites to compete for electoral support and to accommodate diverse
concerns, in which civil society significantly benefited. Although
fragmentation of elite alignments is often associated with political parties,
in a country where the party system is generally weak, the shift in the
support base of individuals makes them more or less acquiescent to the
demands of civil society.
Why Arroyo took a year since the deluge of imports reached
incalculable proportions to respond to the crisis, which incidentally
was also a year prior to the national elections, could be explained by
this precariousness, especially after Molintas’s pronouncement of a
victory for her opponent, Panfilo Lacson, in Benguet. This was also
the case with Roxas in his effort to cajole the Benguet voters with his
populist image and with the local government officials as the political
costs of inaction in a predominantly rural economy would be
insurmountable. Local politicians are generally more likely to
accommodate civil society than their national counterparts because of
the more volatile nature of local elections.
Concomitantly, civil society has gained knowledge of the game of
traditional politics, employing quid pro quo and realpolitik in its
negotiation for tariff reduction and safety nets. Electoral support was
extremely used as a leverage. Strategy-wise, this facilitated the
52 People, Profit, and Politics
Strategies
Outcomes
Conclusion
This study has shown that the strategies, processes, and outcomes of
civil society in its engagement with the state rest upon external factors,
which are neither constant nor permanent, and that the changes could
facilitate, hinder, or totally obstruct collective action. In the case of the
civil society players in the Benguet vegetable sector, they were unduly
optimistic and more or less responsive to changes in political opportunity
structures. However, while there are changes in the political opportunity
structures which civil society can take advantage of, there are stable structures
in Philippine polity—submission of the state to market forces—that
frustrate consequential and long-term actions of civil society.
Dryzek (1996) suggests that for movement groups to engage effectively
with the state, the aims of the movement groups should be in some way
matched with imperatives such as economic growth, legitimacy, or security,
which are sought by all governments regardless of political leanings to
ensure stability. If there is little or no connection between movement goals
and state imperatives, inclusion in state fora presents risks of cooptation.
The Philippine government has been in an uphill battle in its fulfillment
of economic development, but unfortunately, the course it has taken is
58 People, Profit, and Politics
contradictory to what civil society judges as the right path. While it seeks
growth through the doctrine of laissez-faire, civil society, on the other hand,
pushes for state regulation of the market, which implies strong faith in the
ability of the state to effectively manage the market. However, alongside
this confidence in the state’s regulatory functions is an equally strong distrust
of its governance role, based on its failure to implement and enforce policies
and laws, which have led to the pervasiveness of smuggling activities. Hence,
civil society is ostensibly ambivalent on the state’s position in the scope of
problems confronting the vegetable industry.
This underpins the assertion put forward earlier regarding openness
of the state as a function of policy in question. It is axiomatic why there
was a plethora of government-civil society partnerships against smuggling,
while civil society continues to be hammered or repudiated in its lobby for
tariff rates increase. Anticorruption has been a major plank of
administrations following the transition to democracy, in which the
antismuggling project in tandem with civil society fits perfectly. On the
other hand, the increase in tariff rates of imported agricultural produce,
which civil-society groups in this study are advocating, threatens the
foundation of the Philippine government’s economic paradigm of
neoliberalism, of which the President is a strong advocate. Reinstatement
of protective measures for agriculture, which in effect means reversal of
trade liberalization, would be a silent but open admission of Macapagal
Arroyo’s oversight on economic planning, a step which she is not enthusiastic
about. Hence, the government’s accommodation of civil-society groups
was more symbolic than substantive, as illustrated in the perfunctory
consultative processes on tariff setting with negligible influence of civil
society on policy outcomes.
In spite of this, characterizing the relations between state and civil
society in this study cannot be reduced to simplistic dichotomies of
“partnership” or “opposition.” Both state and civil society are
intertwined in complex forms of interaction in which antagonism and
cooperation often occur simultaneously. Difficulties abound in engaging
state agencies that perform the roles of policy advocates and regulators.
Mobilizing against Vegetable Importation 59
Acknowledgment
I thank Liza Gobrin, Linda Gobrin, and Pablo Rosales for their
generous assistance and support in the conduct of the fieldwork for this
study. I am also grateful to Alfredo Alangdeo and John Kim for sharing
their records on their engagement with various agencies, majority of which
were hard to obtain elsewhere. Mars Mendoza helped correct factual errors
on the earlier draft of this paper.
Notes
1. In 2004, agriculture accounted for about 20 percent of total gross domestic
product (GDP), contributing 0.96 percentage point to total GDP growth
(National Statistical Coordination Board 2005). Estimated at 11.37 million,
the sector’s share to total employment is 36 percent (BLES 2005).
2. According to Lantican (1998), the Philippines has a comparative advantage in
the production of select fresh vegetables and vegetable seeds. From 1999 to 2002,
exports averaged 24 million kilograms. Primary exports were shallots, asparagus,
and fresh or dried manioc/cassava (Ibon 2003; Guzman 2000). Foreign exchange
earnings in 1995 and 1996 posted very encouraging records for both volume
(51,107 tons in 1995 and 39,060 in 1996) and value (USD 34 million in 1995
and USD 35 million in 1996). Fresh/chilled vegetables accounted for the bulk.
However, due to limited production, the cultivation of vegetables has been largely
Mobilizing against Vegetable Importation 61
meant for local consumption. Only less than 1 percent of the total supply of
vegetables is exported.
3. Semitemperate vegetables include broccoli, cabbage, carrot, cauliflower, celery,
lettuce, mushroom, and potato.
4. Vegetable farmers in Benguet supply from 20 to 25 percent of the total vegetable
needs of the Philippines (Ilagan 2003). The province accounts for 67 percent of
the volume of production of white potato, 64 percent of cabbage, and 75 percent
of carrots for the whole country in 2000 (PIDS 2004). Northern Benguet towns
produce 20 tons of carrots and 50 tons of potatoes a day (Dumlao 2002). In
terms of employment, in the rural areas, 60 percent of Benguet’s 322,000 farmers
get their livelihood from vegetable farming (Alcantara 2001; Cabreza 2002a),
representing up to 40,000 farm families (Cabreza 2002a).
5. The “high value crops” development framework is a market-/private sector-led
strategy, with minimal subsidies to vegetable growers, under a liberalized trade
policy. It further necessitates the adoption of modern technology in production
(Lantican 1998; Aquino 2003) and rationalization of resources to maximize
agricultural productivity by virtue of Republic Act 8435 or the Agriculture and
Fisheries Modernization Act of 1997.
6. Actually, Lewis (1992) claims, “the Benguet vegetable farmers became entangled
in the world market economy not primarily as producers for a global market,
but rather as consumers of agricultural supplies produced in the metropolitan
states” (143-44), dominated by Hoescht and Bayer (German), Shell (Anglo-
Dutch), and Union Carbide (American).
7. In Cordillera, many vegetable farmers source their capital from a landholder or
trader, usually a close friend or relative. Some own the land they till, while others
work as tenants or rent the land for cultivation. Farmers buy inputs either from
traders or middlemen in trading posts, and sell their produce to the same trader.
The trader would naturally get half of the farmer’s earnings (Ibon 2003).
8. Thirty to 50 percent of vegetables are registered as postharvest losses (Ibon 2003).
9. For example, in 2000, while the farmgate price of carrots was pegged at
PHP 16.33 per kilo in Benguet, its retail price in its primary market, Manila, is
PHP 43.70 per kilo (PIDS 2004).
10. Domestic demand and consumption of vegetables in lowland areas has been
decreasing by 40 to 60 percent since 1999 (Ibon 2003).
11. Potato is the leading vegetable imported, with 13 percent.
12. Retailers were forced to sell their commodities at much lower prices than their
imported counterparts. Normally, during typhoons in early July, prices of vegetables
Protests and Perceived Threats
in the Hog Industry
Joel F. Ariate Jr.
P
ig-waste management and disposal, controlling foot-and-mouth
disease (FMD) and other zoonotic diseases (i.e., animal diseases
that can be transmitted to humans), food safety concerns, and the
issue of social equity are the pressing concerns that the Philippine hog
industry must address at present, according to a recent study made for the
United Nations Food and Agriculture Organizations (UNFAO) (Costales
and Delgado 2002). The issue of social equity best sums up the
interrelatedness of these concerns:
The survival of the smallholders in pig production depends primarily
on political decisions to finally enforce zoning ordinances, effluent
standards, and environmental pollution regulations, and only to a lesser
extent on the engagement in international trade agreements, or on
domestic market developments influencing the scaling up of production
systems to the disadvantage of smallholders. (Costales and Delgado
2002)
73
74 People, Profit, and Politics
Production
In 1980 the average pork consumption per person was 9.17 kilogram;
now the average hovers around the 18 kilogram per person mark, an increase
of about 85 percent (table 1). Because of market demand, hog production
continues to grow, though at times the industry’s growth rate seems to
taper off then bounce back again (figures 1 and 2). A cursory glance at
figure 2 will reveal that commercial hog producers seem to have experienced
a bumpier growth than backyard or small-scale hog raisers. The Bureau of
Agricultural Statistics (BAS) defines backyard or small-scale livestock farms
Protests and Perceived Threats in the Hog Industry 77
300.00
250.00
200.00
Prices in
150.00
100.00
50.00
0.00
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
199019911992199319941995199619971998199920002001200220032004
Year
Farmgate Price Wholesale Price Retail Price
strong allies of the hog farmers since the former depend on the latter for
their job and income security.
As the provider of one of the most basic production components, the
feed millers’ interest is expected to be closely aligned with the hog farmers’.
And like the hog farmers, the feed millers’ main interest is to secure a
sufficient and stable supply of raw materials coupled with an ever-expanding
market, i.e., the hog farmers.
Habito’s (2002) inclusion of the country’s international trading partners
as one of the key stakeholders in the hog industry is quite telling of the
issues that the industry faces owing to globalization:
Figuring prominently in the landscape are the country’s trading partners,
who normally want to ensure easy access to the domestic market, in
order to maximize their own citizens’ sales, and therefore incomes,
obtained from the trading relationship. At the same time, they would
prefer to restrict access to their own domestic markets by their foreign
trading partners, for the sake of protecting the economic interests of
their domestic citizens. While distant, these particular stakeholders can
prove to be more powerful and influential than those who are within
the country itself.
usually causes a dip in retail price. To remedy the situation, hog and meat
dealers must rely on their initiative and business acumen to create a situation
in which profit could be realized. The most common way to achieve this is
to link areas with a high supply of hog to those with low hog production
yet with a high number of pork consumers—thus the flow of hogs from
rural and peri-urban areas into the city.
The government and the NGOs (the civil-society actors) are supposed
to mediate the interaction of the previously mentioned stakeholders as
they also continuously engage each other on issues concerning the industry.
This is not, however, to imply that they are on an equal footing. In most
issues confronting the industry, the power to decide and to enforce those
decisions rests on the government. The civil-society actors can only try to
influence this decision the best way they could.
The consumers ideally should benefit from the action of all these
stakeholders, that is, they are able to obtain quality pork products at a low
price.
An Industry in Peril?
Trade Policies
Since the inception of Tariff and Customs Code in 1957, the local
hog industry has experienced varying degrees of trade protection from
the government. Using the tariff imposed on products in direct market
competition with pork, i.e., imported pork, live hogs, and processed
meat, it is reasonable to argue that from 1957 to 1986, the local hog
industry was minimally protected. Then, an increasing degree of trade
protection was instituted from 1986 to 1995. However, this protection
has steadily gone down and would soon reach a very minimal level due
to the country’s WTO commitments ratified in 1995 (table 2) (Habito
2002).
Tariff rates on imported pork, hog, and processed meat have shown
steep climbs and sudden dips. However, regardless of the tariff
protection, domestic hog production and pork consumption have grown
steadily. In 1980, domestic production stood at 448,000 metric tons,
at present 1.3 million tons; in 1980, the average annual pork
consumption of a Filipino was 9.17 kilos; now, around 17 kilos a year
(see table 1). Though this cannot be considered as an incontrovertible
proof, the growth in domestic hog production and pork consumption
supports the view that the domestic demand has been strong enough
to beat the previous threats of meat and hog imports (and smuggling).
Whether this will still be true after 2009 remains subject to inferences
and the usual economic projections. In making these projections, two
particular trade agreements must be strongly considered: the ASEAN
Free Trade Area-Common Effective Preferential Tariff (AFTA-CEPT)
and the country’s commitments to the WTO.
Protests and Perceived Threats in the Hog Industry 85
AFTA-CEPT
By 2010, the six original member-countries of the ASEAN—Brunei
Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand—
will be levying a 0-5 percent tariff rate on most commodities being traded
among them as part of their Common Effective Preferential Tariff (CEPT)
scheme (ASEAN Secretariat 2002, 1). Newer members like Vietnam, Laos,
Myanmar, and Cambodia will follow suit not later than 2015. This is in
line with the establishment of an ASEAN Free Trade Area (AFTA), which
the ASEAN agreed upon in 1992. The AFTA aims to “eliminate tariff
barriers among the Southeast Asian countries with a view to integrating
86 People, Profit, and Politics
the ASEAN economies into a single production base and creating a regional
market of 500 million people. The agreement on the CEPT scheme of the
ASEAN Free Trade Area requires that tariff rates levied on a wide range of
products traded within the region be reduced to no more than 5 percent.
Quantitative restrictions and other nontariff barriers are to be eliminated”
(ASEAN Secretariat 2002, 1). AFTA-CEPT covers manufactured and
agricultural products. However, the lowering of tariff rates on tradable
commodities will not be done in one blow.
The CEPT is the mechanism by which tariffs on goods traded within the
ASEAN region, which meet a 40 [percent] ASEAN content requirement,
will be reduced to 0-5% by the year 2002/2003 (2006 for Vietnam, 2008
for Laos and Myanmar, and 2010 for Cambodia). The tariff reductions are
moving ahead on both the “fast” and “normal” tracks. Tariffs on goods in
the fast track were largely reduced to 0-5% by 2000. Tariffs on goods in the
normal track will be reduced to this level by 2002, or 2003 for a small number
of products. Currently, about 81% of ASEAN’s tariff lines are covered by either
the fast or the normal track. (Unites States-ASEAN Business Council 2005)
Besides the “fast” and “normal” tracks in tariff reductions there are
also three ways of including or excluding a tradable commodity in the
CEPT scheme. A tradable commodity can be put in the temporary exclusion
list, classified as a sensitive agricultural product, or be generally excluded
from the whole scheme. Products under the temporary exclusion list are
those that comprised the bulk of an ASEAN country’s tradable commodities
and whose tariffs will be lowered to 0-5 percent by 2003. Those listed as
sensitive agricultural products are commodities produced by ASEAN
member-countries that they want to delay inclusion in the AFTA. “A small
number of sensitive agricultural products will be extended a deadline of
the year 2010 for their integration into the CEPT scheme. In an agreement
that has yet to be fully spelled out, the process of tariff reduction on these
products will begin between 2000 and 2005, apparently depending on the
country and the product” (Unites States–ASEAN Business Council 2005).
An ASEAN member-country has an option also to totally exclude some
commodities from the CEPT. This exclusion is usually availed by member-
countries for reasons of “national security, protection of human, animal or
Protests and Perceived Threats in the Hog Industry 87
plant life and health, and of artistic, historic, and archeological value”
(ASEAN Secretariat 2002, 2). However, Habito explains that “those
products in the Exclusion List were to remain subject to the previously
existing ASEAN Preferential Tariff Agreement (ASEAN-PTA) which
provided for Margins of Preference (MOP) or progressively increasing tariff
discounts on the tariff rates imposed on other ASEAN members” (2002).
With the Philippines classifying fresh pork and poultry meat as sensitive
agricultural products, tariff reductions on these commodities will not
happen until 2009. Thus, the full impact of the AFTA-CEPT on the
domestic hog raisers is still to be felt.
WTO
In ratifying the GATT-Uruguay Round Treaty in 1994, which includes
the Agreement on Agriculture, the Philippines was expected to comply
with the following:
All these requirements were supposed to integrate fully for the very
first time the Philippine agricultural trade into a global and multilateral
trading system. Except on the issue of agricultural subsidies—with the
government hardly providing any to domestic agricultural producers—
the Philippines has assiduously complied with the two other terms,
particularly on the issue of market access.
Market access commitments involve 1) the removal or conversion into tariffs
of all quotas; 2) the introduction of minimum access volumes (MAV), which
allow for the importation of a certain quantity of imports at lower tariff
88 People, Profit, and Politics
rates; 3) a ceiling for tariff rates (tariff bindings); and 4) tariff reductions.
The Philippines has more than complied with its WTO commitments on
tariff bindings and tariff reductions. With EO 288, tariffs on nonsensitive
agricultural products averaged 14.1 [percent] in 1996, and reduced to 4.8
[percent] in 2003. Note that the 1996 actual average tariff was lower than
the 43 [percent] average in 1995 base rate committed to the WTO. Clearly,
the actual average tariff reductions from 1996 to 2003 would be much
lower than the average tariff reductions committed to the WTO, which
should have been higher than actual prevailing tariff levels. (dela Cruz,
Paderon, and Bautista 2004, 9)
Year Beginning Production Imports Gross Exports Seeds Feeds and Processing Net food disposable Ending
stock supply Wastes stock
Total Per capita
Kg./Yr. Grms./day
1978 277.00 3073.00 106.00 3456.00 0.00 64.00 1848.00 155.00 1005.00 21.95 60.12 384.00
1979 384.00 3056.00 35.00 3475.00 0.00 64.00 1994.00 153.00 1006.00 21.39 58.59 258.00
1980 258.00 3050.00 250.00 3558.00 0.00 64.00 2118.00 152.00 1005.00 20.80 56.99 219.00
1981 219.00 3296.00 253.00 3768.00 0.08 66.00 2313.00 164.00 988.92 19.96 54.69 236.00
1982 236.00 3404.00 341.00 3981.00 0.01 68.00 2485.00 170.00 993.99 19.57 53.63 264.00
1983 264.00 3134.00 528.00 3926.00 0.03 63.00 2436.00 156.00 951.97 18.29 50.10 319.00
1984 319.00 3250.00 182.00 3751.00 0.11 64.00 2393.00 162.00 949.89 17.80 48.78 182.00
1985 182.00 3863.00 281.00 4326.00 0.27 70.00 2631.00 194.00 999.73 18.29 50.10 431.00
1986 431.00 4091.00 0.20 4522.20 0.14 72.00 3036.00 205.00 968.06 17.29 47.36 241.00
1987 241.00 4278.00 56.00 4575.00 0.24 74.00 3039.00 214.00 1017.76 17.74 48.62 230.00
Protests and Perceived Threats in the Hog Industry
1988 230.00 4428.00 25.00 4683.00 0.07 75.00 3067.00 221.00 1026.93 17.49 47.91 293.00
1989 293.00 4522.00 173.00 4988.00 0.08 74.00 3195.00 231.00 1349.72 22.46 61.53 138.20
1990 138.20 4854.00 345.50 5337.70 0.09 76.00 3434.00 244.00 982.11 15.97 43.77 601.50
1991 601.50 4655.00 0.32 5256.82 20.07 71.79 3365.05 247.12 1093.49 17.39 47.65 459.30
89
Table 3, cont. 90
Year Beginning Production Imports Gross Exports Seeds Feeds and Processing Net food disposable Ending
stock supply wastes stock
Total Per capita
Kg./Yr. Grms./day
1992 459.30 4618.90 0.60 5078.80 0.00 66.63 3002.29 616.16 1156.73 18.00 49.32 237.00
1993 237.00 4797.90 0.65 5035.55 0.02 62.99 3118.64 640.04 1009.47 15.43 42.27 204.40
1994 204.40 4519.30 0.89 4724.59 0.04 60.12 2937.55 602.87 907.41 13.22 36.23 216.60
1995 216.60 4128.52 208.02 4553.14 0.07 53.85 2683.54 550.74 1075.45 15.73 43.11 189.50
1996 189.50 4151.30 405.44 4746.24 0.02 54.71 2698.35 553.78 1178.98 16.85 46.18 260.40
1997 260.40 4332.42 307.59 4900.41 0.02 54.52 2816.07 577.94 1129.15 15.78 43.24 322.70
1998 322.70 3823.18 462.12 4608.00 0.17 47.08 2485.07 510.01 1094.97 14.97 41.01 470.70
People, Profit, and Politics
1999 470.70 4584.59 149.46 5204.75 0.08 52.84 2979.98 611.58 1322.36 17.69 48.47 237.90
2000 237.90 4511.10 446.43 5195.43 0.25 50.21 2932.22 601.78 1421.28 18.58 50.90 189.70
2001 189.70 4525.01 171.77 4886.48 0.15 49.73 2941.26 603.64 1114.31 14.30 39.18 177.40
2002* 177.40 4319.26 278.24 4774.90 0.36 47.91 2807.52 576.19 1109.92 13.96 38.25 233.00
Two factors intersect to serve as the grid for the state-civil society
relations in the domestic hog industry sector in the context of globalization.
The first factor is the willingness of the post-Marcos Philippine state to
engage civil-society actors in designing its policies and in implementing its
programs, thus conferring on its actions a constant veneer of democratic
legitimacy. The second is the presence of strong organizational and business
networks in the hog industry and their prior experience in building
cooperatives even before the restoration of democratic space after Marcos’s
authoritarian rule.
Laws of engagement
The 1987 Constitution, in its declaration of principles and state
policies, affirmed that the “State shall encourage non-governmental,
community-based, or sectoral organizations that promote the welfare of
the nation.” Article 13 of the constitution contains the role and rights of
people’s organization. The framers of that constitution perceived people’s
organizations as being those that enable the people “to pursue and protect,
within the democratic framework, their legitimate and collective interests
and aspirations through peaceful and lawful means.” Given that role, section
16 of article 13 of the constitution stipulates that “the right of the people
92 People, Profit, and Politics
leading dailies to present their side to the public (see, for example, Limcoma
Multipurpose Cooperative’s full-page ad on the November 20, 2002, issue
of the Philippine Daily Inquirer).
The emergence of the Agricultural Sector Alliance of the Philippines
(ASAP) in 2001, with majority of its members being feed millers’ and hog
raisers’ associations and cooperatives, civil-society actors in the industry
have shown their ability in coalition building, which would enable them
to launch a more confrontational posture against the state. The meat and
hog dealers also organized themselves in 2004, and the Meat and Hog
Dealers Association of the Philippines (MHDAP) was formed. MHDAP,
together with the Slaughterhouse Operators Association of the Philippines
(SOAP), would figure prominently in a meat holiday in March 2004.
Despite acts of alliance building, civil-society actors in the hog industry
also contend among themselves. This must not be viewed, however, as
petty intramurals, all noise, and smoke and mirrors. “Contentious politics
in a fragile democracy can have contradictory results. By its ability to
mobilize and empower disadvantaged sectors, it can enhance democratic
governance by enforcing more transparent and accountable ruling
procedures. On the other hand, by overwhelming political institutions
with oftentimes difficult demands and bypassing institutional frameworks
of claim-making and governance, contentious political actions can put
under severe stress the minimum conditions of consensus and
accommodation necessary for democratic contestation” (Rivera 2002, 472).
EO 470
When the Aquino administration enacted tariff reforms in 1990 “to
address the traditional bias of macroeconomic policies against agriculture
Protests and Perceived Threats in the Hog Industry 95
MAV rule
At the Senate’s deliberation on the WTO Agreement in 1994, the
Philippine Association of Broiler Integrators (PABI) and the National
Federation of Hog Farmers (NFHF) discovered that the MAVs committed
for pork and poultry meat, along with sugar, were much higher than what
would have been intended by the Department of Agriculture. PABI and
NFHF argued that the MAV for pork and poultry meat, given the levels of
domestic production capacity and projected demand, were about twice
what they should have been. The Philippine government blamed the “error”
“on unreliable production statistics available at the time the original
submissions were made to the WTO secretariat in 1991” (Habito 2002).
Efforts were made to make “technical corrections” on the quantity
of pork, poultry meat, and sugar that should be subjected to MAV.
The WTO accepted the correction on sugar but rejected those for pork
and poultry meat. “Not a few attributed the difference in these outcomes
to the fact that the United States had no commercial interest in, and
therefore did not resist, the correction for sugar. On the other hand,
the United States had a close interest in increased access to the Philippine
market for US pork and poultry products, and thus resisted the technical
96 People, Profit, and Politics
the imported supply, then they could do away with the imports. The hog
raisers countered that they could not lower farmgate prices since they were
already selling with a very thin profit margin, if not at a loss. If, however,
the government would do something to lower their cost of production,
then they could sell the hogs at a lower price. In particular, the hog raisers
suggested, the government should lower its tariff on corn and soybeans,
primary components of hog feeds. This stance pits the hog-industry players
with the civil-society advocates of the corn farmers. Thus, in spite of all
the posturing, a virtual stalemate ensues, which also serves as a very uneasy
status quo.
Foot-and-mouth disease
Foot-and-mouth disease’s deadly rampage started in August 1994. By
December of that year an FMD epidemic was already raging in Bulacan.
A month later, the disease had reached Mountain Province, Pangasinan,
Baguio City, Quezon, Batangas, Laguna, and Ilocos Sur (Philippine Daily
Inquirer, January 10, 1995). Reports started to surface that some hogs
already infected with FMD were still being butchered and sold in the
market and at a much lower price than FMD-free pork.
If the issue of FMD outbreak was at first treated as something confined
to a particular locale, the news of traffic in FMD-infected pork forced the
government to face the issue from the vantage point of the national
administration. In January 19, 1995, the National Meat Inspection
Commission (NMIC) warned parents not to feed their children with the
meat of animals afflicted with FMD, saying that the children were more
liable to catch the disease than the adults were. However, they qualified
their statement by saying that FMD was not fatal to both humans and
animals (Manila Chronicle, August 15, 1995).
Despite this warning from NMIC, only in February 8, 1995, did the
DA finally acknowledge the FMD epidemic by issuing Administrative
Order (AO) 3, prohibiting and penalizing the shipment of animals and
animal products from regions 1, 2, 3, 4, Metro Manila, and the Cordillera
Administrative Region (CAR).
98 People, Profit, and Politics
FMD since the local government only had PHP 300,000 for FMD vaccines,
an amount good only for around sixty heads of animals (Manila Times,
June 29, 1995). With the public paranoid about contracting FMD from
pork, the retail price of pork went down by as much as PHP 5 by July
1995.
A year after the outbreak of FMD, industry players cum civil-society
actors led by the National Hog Raisers Group Inc. (NHRGI) claimed that
the annual household consumption of pork in the country had gone down
by 75 percent due to fears of FMD. Loretta Galang, NHRGI president,
said that this decline in pork consumption translated into a PHP 2 billion
loss for the hog industry. Thus, she made an appeal to the public and the
government to save the industry. Galang appealed to the public to “take a
sober look at the FMD situation and save the multibillion-peso industry
from the peril of being wiped out by unfounded fears” (Galang quoted in
The Philippine Star, August 4, 1995). She issued this appeal in view of the
official assessment of the departments of health, agriculture, and science
and technology, saying that FMD was not a public-health hazard since it
was extremely rare for humans to suffer FMD fatally.
She also urged the government to launch a massive information
campaign aimed at reassuring the public that most of their fears of FMD
were baseless. To compliment this effort, Galang also called on the
government to “deploy meat inspection agents in at least the largest markets
in the country to strengthen confidence in the quality of meat products
sold in the market” (Galang quoted in The Philippine Star, August 4, 1995).
In strengthening the consumers’ confidence in locally sourced pork products
at the height of the FMD outbreak, the industry players had indeed only
the government to turn to. As Galang explained, “It’s hard for the private
sector to convince consumers that it’s safe to eat pork, because they might
have the misimpression that we’re only doing it in order to cope up [sic]
with huge losses we incurred from the FMD scare” (Galang quoted in
Agriscope 1996, 21).
As hog industry players cum civil-society actors pleaded for government
support, they could also not refrain from criticizing the government not
100 People, Profit, and Politics
only for its ineptitude but also for corruption. Galang accused LGU officials
of withholding the fund allotted to combat FMD and diverting this fund
for their own personal and political purposes (Manila Times, August 5,
1995). She said that the government earmarked PHP 300 million for the
implementation of measures against FMD; however, only the measly sum
of PHP 20 million had been released to the industry. Carlito Calimlim,
general manager of the United Swine Producers Association, also scored
the LGUs for failing to deploy veterinarians and meat inspectors who could
have checked the spread of FMD (Manila Times, August 5, 1995).
By August 1995, BAI admitted that it would take at least three years
to neutralize FMD. Only after a year did the hog raisers start recouping
their losses. By August 1996, the Bureau of Agricultural Statistics reported
that retail prices of pork, chicken, and a number of basic commodities
continued to soar in Metro Manila and key provincial markets. The BAS
reported that pork is PHP 94-105 per kilo, up from PHP 85-98 by end of
January 1996 (Manila Times, April 27, 1996).
ultimately lead to the collapse of the local hog industry on which around
4.25 million individuals depended for their livelihood (The Philippine Star,
November 17 and November 24, 2002; Manila Times, November 26,
2002). In November 1998, the National Federation of Hog Farmers, Inc.
(NFHFI), a nonstock, nonprofit umbrella organization of autonomous
associations, with a total individual membership of more than two thousand
hog farmers, issued a letter to then-President Joseph Estrada on the use of
carabeef by fast-food chains. They also informed the president about the
imported carabeef flooding the local meat market (Philippine Daily Inquirer,
November 12, 1999).
Three years later and under a new administration, Nemesio Co,
national chairman of the National Federation of Hog Raisers (NFHR), in
an October 2002 letter to then-DA Secretary Edgardo Angara, was still
making an appeal to the government to act on the issue. He said that
importation and smuggling had resulted in lower demand for locally
produced pork which, in turn, led to record-low levels of farmgate prices
of hogs. In particular, he blamed this situation on dumping of processed
meat and carabeef (The Philippine Star, October 27, 2002). Co said that
they felt “so helpless, cheated, and violated that imported carabeef, which
is supposed to be for the exclusive use of meat processors, [is] being dumped
in the country in volumes heavens know how large; they have even gone to
the legitimate trade routes of the wet markets, supermarkets, and canteens.
Even their packages, which are supposed to be burned, are being sold at
junkshops in violation of the rules on quarantine procedures” (Co quoted
in The Philippine Star, November 24, 2002).
To prod the government to act on their behalf, some industry players
even argued that in not helping them, the government must not also expect
any reciprocal gesture from their part. An example of this tact is a statement
from Albert Lim Jr., NFHFI senior vice chairman. He said, “The downside
of this unwanted scenario is the program of creating one million jobs is
being tremendously compromised because our business is losing to
smuggling and dumping. So, instead of expanding our operations and
hiring more people, we cannot do that anymore. Some people are destined
102 People, Profit, and Politics
to lose their jobs if the government cannot check the rampant illegal
activities of some traders” (Lim quoted in The Philippine Star, November
24, 2002).
However, no decisive action was seen from the government. Besides
writing to Angara, Co also wrote to Sen. Ramon Magsaysay and Rep.
Alfredo Marañon, chairmen of the agriculture committee at the upper
and lower houses of Congress, respectively. He appealed for assistance
“to create legislation to regulate the excessive entry of meat importations
coming into the Philippines” (Co quoted in Manila Times, November
26, 2002).
It was in the midst of these unheeded appeals from the two largest
organizations of hog raisers, i.e., the NFHFI and the NFHR, that the
Agricultural Sector Alliance of the Philippines (ASAP) was formed.
ASAP was registered with the Securities and Exchange Commission
(SEC) on January 6, 2003, with Nicanor Briones of Limcoma
Multipurpose Cooperative, the largest agricultural cooperative in the
Philippines, as chairman. In its engagement with the government, ASAP
would employ a more sustained and sometimes confrontational stance.
Exactly a month later, it would already be leading a meat blockade in
Metro Manila.
In the same week that ASAP registered with SEC, it issued a press
statement saying that in protest of the government’s failure to stop illegal
meat importation and smuggling, it intended to stop supplying pork to
the metropolis for about a week. A rally with “a parade of pigs along
Mendiola Street near Malacañang and throwing of eggs on the road as a
sign of protest was also planned to coincide with the meat holiday” (Briones
quoted in The Philippine Star, January 10, 2003).
The pork stoppage occurred on February 6-8, 2003, spearheaded by
ASAP and “supported by the NFHFI–Nemesio Co wing (where Albert
Lim is president), some members of the NFHFI–Gabby Uy wing, also
some members of PAHRI [Philippine Association of Hog Raisers Inc.]
and several independent raisers/associations in Bulacan, Tarlac, and Rizal
[e.g., Livestock Association of Pandi]” (Locsin 2003).
Protests and Perceived Threats in the Hog Industry 103
A PHP 1,700 feed subsidy was also given on March 30, 2004, to
around 98,000 backyard hog raisers affected by the high cost of feed. The
subsidy was given to hog raisers in Batangas, Rizal, Pampanga, Bulacan,
Ilocos, Negros Occidental, Negros Oriental, Iloilo, Aklan, Antique, and
Capiz (Manila Bulletin, March 30, 2004; Today, March 31, 2004).
As before, this situation pitted one group in the local swine industry
against the other. MHDAP was up against ASAP and the SOAP (The
Philippine Star, March 6, 2004). ASAP, the National Federation of Hog
Farmers Inc. (NFHI), and the National Federation of Hog Farmers of the
Philippines (NFHFP) were feuding with the Philippine Association of
Meat Processors (PAMPI) (Manila Times, April 5, 2004; Philippine Daily
Inquirer, February 23, 2004; Manila Times, April 23, 2004). ASAP and
NFHI accused PAMPI of making false claims that there was a meat shortage
in order to justify their demand for an increase in meat imports. For their
part, the meat processors argued that they were providing cheap protein
source to Filipino consumers since the imported meat cost less than the
locally sourced ones. ASAP and NFHI alleged that the importation, in
particular, of carabeef from India endangered the local swine industry since
India was not an FMD-free country. They also added that since the local
market was being flooded with meat imports (legal and smuggled), the
hog raisers were also being forced to cut down on production in order to
stabilize the farmgate price of hogs. When it undertook that step, it was
accused in turn by the MHDAP of creating a shortage to jack up the price
of hogs (Philippine Daily Inquirer, March 7, 2004). When the news of
“hot meat” started appearing in the news, ASAP in turn accused the pig
buyers of floating this news in order to scare consumers away (Manila
Times, April 23, 2004). This “disinformation campaign” brought down
hogs prices (Today, April 22, 2004).
The government responded to this situation by bringing together in a
dialogue the different civil-society actors in the local swine industry (The
Philippine Star, March 6, 2004) and coming up with new tariff measures
aimed at lowering the production cost of hog raising, in particular lowering
the tariff on corn and soybeans, primary components of livestock feeds
106 People, Profit, and Politics
(Philippine Daily Inquirer, March 11, 2004; The Philippine Star, March
10, 2004). Backyard hog raisers comprising about 77 percent of all hog
raisers were also given feed discounts (Today, March 31, 2004). The
government also imposed stricter measures in importing meat and livestock
to protect the country from animal diseases.
PAMPI resented this measure. The meat processors maintain that it
was uncalled for and would merely make the importation process longer,
thus eating up more of their time and resources (BusinessWorld, June 22,
2004; Manila Times, April 5, 2004). To appease the meat processors, the
Bureau of Customs was studying the possibility of lowering the tariff on
pork imports (Today, July 8, 2004), which the hog raisers, in turn, would
surely oppose (Today, April 20, 2004).
Conclusion
Without the claim of representing a certain constituency that is
supposed to be at a disadvantage in the current trade regime, i.e., the
estimated four million backyard hog raisers, nothing separates the civil-
society actors in the hog industry from profit-fixated interest groups that
lobby the government for advantageous deals. This is not, however, to
disparage what civil-society actors from the business sectors can accomplish.
As O’Connell points out, “The business sector is another undervalued
partner in civil society. Many businesses are not renowned for civility and
social conscience, but those that accept and fulfill social responsibility
contribute significantly to the quality of community and civil society”
(2000, 473).
That the civil-society actors in the local hog industry are market players
themselves prefigures the issues that will serve as the milieu for state-civil
society relations in the context of globalization. The state-civil society
engagements in the hog industry have focused on issues that concern the
industry actors’ economic viability. This sentiment is true both for the hog
raisers (both small-scale and commercial) and for the hog dealers. The
strongest indicator of this condition is how the issue of prices (farmgate
and retail) predominates the state-civil society engagements; both the
Protests and Perceived Threats in the Hog Industry 107
necessity to recoup the expenses in raising and dealing hogs, and that profit
must also be realized. Though the pronouncements of civil-society actors
in the hog industry continuously reiterate the crisis they are in, the
continuously increasing volume of production, domestic consumption,
and retail price cast doubt on this claim.
If the articulated condition seems to differ from what is actually
happening in the market, this could be largely explained by the situation
in which large industry players double as civil-society actors. Large industry
players are more susceptible to fluctuations in volume and price of trade
commodities. And being large businesses they could easily engage the state,
formally or informally, since they could utilize the organizational resources
of the business organizations that they independently belong to.
Viewed, however, from another perspective, this organizational and
financial advantage of industry players constituting themselves as civil-
society actors exposes the inequality among actors in the hog industry. As
Friedman notes, “Where societies are significantly unequal, civil society
will be a realm of inequality since some will command greater resources to
organise than others, and most citizens will probably find participation in
civil society associations beyond their means. A central error of the ‘civil
society as virtue’ paradigm is to confuse the site of action with those who
act in it, the players with the playing field” (2003, 10).
For its part, the state, notwithstanding it’s avowal of partiality
toward civil-society actors, can only do so much in the current
multilateral and global trade regimes. Globalization—or its avatar, trade
liberalization—has a dual effect on state-civil society relations.
Globalization unleashes new economic problems at the domestic level
that forces the state and the civil-society actors to engage each other.
This engagement, however, hardly results in a mutually acceptable
solution since areas for possible compromise or for calibrated response
have been pushed to the margins by the very onslaught of globalization.
Others, however, take the opposite view. They argue that it is the
“traditional political groups…now joined by commercial and civil-
society groups in creating push and pull factors that inhibit state action
108 People, Profit, and Politics
References
Agriscope. 1996. Carabeef import ban sought. Agriscope, April 21.
Association of Southeast Asian Nations (ASEAN) Secretariat. 2002. Southeast
Asia: A free trade area. Jakarta: ASEAN Secratariat.
Protests and Perceived Threats in the Hog Industry 109
Bello, Walden. 2003. Multilateral punishment: The Philippines in the WTO, 1995-
2003. Manila: Stop the New Round Coalition and Focus on the Global
South.
Briones, Nicanor. 2004. Interview by Joel F. Ariate Jr. Tape recording.
November 3.
Costales, Achilles C., and Christopher L. Delgado. 2002. Synthesis of changes
impacting on participation of smallholders in the growing meat market in
the Philippines. In Delgado and Narrod 2002, Annex 3. http://www.fao.org/
WAIRDOCS/LEAD/X6115E/X6115E00.HTM.
dela Cruz, Joseph Leland, Marissa Paderon, and Germelino Bautista. 2004. Trade
liberalization and agricultural policy in the Philippines. In Trade liberalization,
agriculture and small farm households in the Philippines: Proactive responses to
the threats and opportunities of globalization, 6-13. Silang, Cavite: International
Institute of Rural Reconstruction.
dela Cruz, Roderick T. 2004. DA to reduce influence of local meat dealers. March
9. http://www.globalpinoy.com/news/business/03092004/busi4.htm.
Delgado, Christopher L., and Clare A. Narrod. 2002. Impact of changing
market forces and policies on structural change in the livestock industries
of selected fast-growing developing countries. Final research report of
Phase I - Project on livestock industrialization, trade and social-health-
environment impacts in developing countries. International Food Policy
Research Institute and Food and Agricultural Organization of the United
Nations. http://www.fao.org/WAIRDOCS/LEAD/X6115E/X6115E00.
HTM.
Department of Agriculture. 2004. Hog raisers, meat vendors agree to voluntary
price moratorium. http://www.da.gov.ph/news2004/jan/jan23a.html.
Flores, R.E. 1995. Unang payo ni Mang Pandoy: Lutasin ang problema ng livestock
industry! Filipino Magazin, August 28, 9-10.
Friedman, Steven. 2003. The state, civil society and social policy: Setting a research
agenda. Politikon 30 (1): 3-25.
Habito, Cielito F. 2002. Impact of international market forces, trade policies,
and sectoral liberalization policies on the Philippines hogs and poultry sector.
In Delgado and Narrod 2002, Annex 4. http://www.fao.org/WAIRDOCS/
LEAD/X6115E/X6115E00.HTM.
Kraft, Herman Joseph S. 2003. The Philippines: The weak state and the global
war on terror. Kasarinlan: Philippine Journal of Third World Studies 18 (1-2):
133-52.
110 People, Profit, and Politics
A
s an economic phenomenon, globalization is often defined as the
“radical transformation of the economic environment at the local,
regional and global levels through the promotion of an open
international economy characterized by an overwhelming increase in
trade, investment and financial flows” (Frago, Quinsaat, and Viajar
2004). As the globalized arrangement is characterized by an increasing
reduction of barriers in trade and investment, governments in
developing countries take advantage of this by creating a domestic
environment favorable to foreign investments while encouraging local
industries to become more export oriented to take advantage of the
opening of markets abroad. However, critics point out that such setup
is not at all conducive to long-term development. Foreign investors
can easily fly out of the host country when the latter ceases to provide
them the optimum environment for capital accumulation. Moreover,
emphasis on export would give less attention to the development of a
domestic market for local products. Although the emphasis on export
could create more employment for the local workforce because of bigger
markets abroad, problems nonetheless arise if importing countries begin
to tap other sources offering better-quality and -priced goods. This
problem is what the local garment industry is currently facing with the
emergence of countries (especially China) that produce garments more
111
112 People, Profit, and Politics
prevailing world price (Austria 1994, 10).4 The second half of the 1980s,
however, saw the recovery of the garment industry (Cororaton 1997, 8).
Since then, the industry consistently posted growth, becoming the country’s
second-top dollar earner next to electronics.
To compete in the international market, the government enacted several
laws for the industry.5 With the incentives provided by government for
garment manufacturers and the relatively low labor cost, foreign companies
(especially those from the US) were encouraged to set up business in the
country. By the late 1960s and early 1970s, a number of foreign-owned
garment corporations had set up operations in the Philippines. But while
the garment industry was able to participate in the international trade, it
was still unable to take advantage of the growing market opportunities
unlike the other major exporters like Hong Kong, Taiwan, and South Korea.
With this lost opportunity of becoming a major garments exporter, the
Philippines had to contend with a more protectionist environment enforced
by the United States (the country’s major export market) and the European
communities (Austria 1994, 12-13), as exemplified in the MFA.
From 1974 to December 2004, the MFA governed the Philippine
garments exportation. Under the MFA, importing countries set quotas on
the entry of textiles and garments into their countries. Generally, the terms
and conditions regarding the application of quotas are embodied in a
Bilateral Textile Agreement between importing and exporting countries.
Although quotas are set for our garment exports, it was under the Agreement
that we were assured of markets for our products. Hence, it was during the
MFA years that our garment industry experienced growth and expansion
(Hutchison 2001). However, with the abolition of the MFA and the
ascension of the garments trade to WTO rules, the Philippines is up against
countries offering lower costs and faster deliveries of products to buyers
(Austria 1994, 10).6
Social Dimension
Labor problems
Although some of the problems encountered by the workers were there
even before the so-called era of globalization, the respondents perceive
that these have currently intensified (Castro 2004; Caños 2004; Aniesgado
2004). Most garment workers receive wages way below the required living
standard even as they work for long hours to meet quota requirements.
Contractualization has also become rampant (National Commission on
the Role of Filipino Women 2003). Some of the respondents from the
120 People, Profit, and Politics
Manufacture
of textiles 1,923 879 3 876 31 845 1,044
Manufacture
of wearing
apparel 2,757 960 2 958 0 958 1,797
Expenses for occupational safety and health are also often sacrificed in
favor of other production expenses (Adviento 2004). Costs for the protection
of employees are considered as additional expense and not investment.
However, it is ironic that employers do not realize that a safe and healthy
working environment can contribute to productivity as “accidents, diseases,
or death in the workplace can be very costly and can cause serious
repercussions on the overall performance of the company” (Soriano 2004).
The latest data from the Department of Labor and Employment-Bureau
of Labor and Employment Statistics (DOLE-BLES) show the extent in
which occupational safety is sacrificed by some employers (table 1). The
actual figure for occupational injuries and fatality could be more than the
figures shown below because of underreporting.
With regard to the wages of the workers, one respondent said that
employers often cite intense global competition as the reason why companies
cannot comply with the rates mandated by labor laws (Casaña 2004).
Other respondents added that employers often tell their workers that they
should not complain because workers in China, for example, receive a lower
minimum wage than they do. However, the respondents pointed out that
the Philippines should not be compared with China. Even though Chinese
122 People, Profit, and Politics
workers receive lower minimum wage than the Filipinos, the social welfare
incentives provided by their government (e.g., health care, children’s
education) more than make up for the wage difference (Caños 2004;
Aniesgado 2004).
Garment workers also face job insecurity due to possibility of more
closures of factories and capital and investment flight with the expiration
of the MFA, and the inability of companies to survive stiff global
competition.11 Moreover, the use of computer-aided technologies such as
in embroidery contribute to job insecurity as some companies have begun
to retrench workers whose input can be replaced by machines (NCRFW
2003). 12
The respondents also bewailed the discrimination experienced by women
in the garment industry (Caños 2004; Aniesgado 2004). According to a
study conducted by United States Agency for International Development
(USAID), Solidarity Center, and Trade Union Congress of the Philippines
(TUCP) Anti-Sweatshop Project (2002), women experience the following
forms of discrimination in some export processing zones: preference for
single over married women, pregnant women having miscarriages because
they are not moved to assignments appropriate to their condition, not
being allowed to go back to work after giving birth, and sexual harassment.
Aquino’s first months in office, in May 1986 and again in May 1987,
government sponsored the National Tripartite Conference that gathered
representatives from major labor organizations, the management sector,
and government experts (Magadia 2003, 67-68). By the time Aquino left
the presidency, several tripartite representations have been instituted, for
example, in the National Labor Relations Commission, the National Wages
and Productivity Commission, the Overseas Workers Welfare
Administration, and the Regional Wage and Productivity Boards (Magadia
2003, 82). It is mainly through these agencies that labor groups formally
engage the executive branch. Labor groups also engaged the judiciary
through the filing of cases against employers. With the party-list system,
their engagement in the legislative arena is realized through their party-list
representatives. Along with their utilization of the formal venues are the
informal engagements that they launch from time to time (usually through
rallies and pickets) to get their grievances across government.
Recently, various labor groups came together to complete the priority
labor agenda for the first one hundred days of President Gloria Macapagal
Arroyo. The consultation among the labor groups produced the 2004
document “Towards a Joint Policy Agenda for Labor: Managing the Social
Impact of Globalization through Stronger State Adherence to Decent Work.”
The document has been presented to various policymakers as well as
members of the labor movement. The policy proposals mentioned in the
document are meant to address the various problems and disadvantages
encountered by workers in the context of globalization.
The paper focuses on initiatives conducted starting in 2003 up to 2004
to address the implication of the impending expiration of the MFA and
other problems besetting the garment industry. These are the: 1) “Labor
Forum Beyond MFA Phaseout” alliance; 2) Bukluran ng Manggagawang
Pilipino (Solidarity of Filipino Workers [BMP])-Alyansa ng Manggagawa
sa Garment at Textile (Alliance of Garment and Textile Workers [Almagate])
dialogue with the Garment and Textile Export Board; 3) Garments, Textile,
and Allied Industries Labor Council (GARTEX Labor Council) spearheaded
by the Fair Trade Alliance; and 4) National Commission on the Role of
126 People, Profit, and Politics
Employment
The government needs to make a full accounting and registration of
contractors and subcontractors in the garment industry. In general,
subcontracting, which has become prevalent in the Philippines, is defined
as “an industrial or commercial practice whereby the party placing the
contract (parent firm, principal enterprise or company) requests another
enterprise or establishment (subcontractor) to manufacture or process parts
of the whole of a product or products that it sells as its own” (International
Labor Office, as cited in Pineda-Ofreneo 1989, 9).18 With the registration,
the workers employed by the contractors and subcontractors will be fully
accounted for and the employers might be monitored on whether they
give the lawful wages and benefits to the workers.
Moreover, government should be able to enforce stricter penalties for
pseudo cooperatives that take advantage of the workers’ hard-earned money.
Cases abound where pseudo-cooperatives collect contributions from
unsuspecting members only to be discovered later that the operators have
run off with the workers’ money.
There is also need for more government support for worker-owned
and -managed enterprises. Some workers who lost their jobs after the closure
Confronting the Challenges in the Garment Industry 129
of their factories have put up their own small garment businesses. TESDA
should also take an active role in giving business training for the workers’
enterprises. The Department of Labor and Employment (DOLE) and the
Philippine Economic Zone Authority (PEZA) should also be able to assist
the entry of workers’ enterprises in special economic zones. In addition to
establishing the enterprises, government should also be able to help the
workers market their products. As a start, government could direct its
offices to buy uniforms for their workers from these workers’ enterprises.
The campaigns likewise cover the issue of social protection and safety
nets for displaced workers. There should be post-employment programs
for counseling, skills training, livelihood and entrepreneurship, and
cooperatives. Government could also take on a more active role in job
searching and matching for the displaced workers.19
It was also suggested that instead of unions doing their own separate
bargaining negotiations, this could be done on an industry basis. Workers
in the garment industry could negotiate as one in the bargaining table as is
the practice in other countries. This way, the specific needs of the workers
in the industry might be better addressed. For example, due to the prevalent
subcontracting arrangement in the industry, it is estimated that majority
of the garment workers belong to the informal sector who are mostly not
unionized and therefore vulnerable to abuse. When the negotiation is done
on an industry basis, the welfare of these workers will also be given attention.
Moreover, some company owners pay their workers on a per-output basis.
However, as one respondent pointed out, there are no existing laws governing
the payment of salaries based on outputs; hence, such arrangement is also
susceptible to abuse (Mendoza 2005).21
The workers’ need for occupational health and safety measures should
also be addressed. Several studies have shown that company owners have
been remiss in providing occupational health and safety measures in the
workplace. In economic zones, decent and affordable housing should be
provided to workers in the area. Age- and sex-based hiring should also be
penalized.
As for workers who are out of employment, government should
“facilitate post-employment programs as well as complementing
mechanisms that would give the workers easy access to financial and technical
support.” The programs may be “job-career counseling, socio-economic
venture, skills training and re-training, entrepreneurship programs,
cooperatives and social enterprises” (Labor Forum Beyond MFA n.d.).
Civil-Society Initiatives
Meanwhile, the Labor Forum Beyond MFA was formed in early 2003
through the efforts of the International Textile, Garment and Leather
Workers’ Federation (ITGLWF) Philippines to examine problems
experienced by the garment industry in view of the expiration of the MFA
and to prepare the workers for the quota phaseout. According to Annie
Adviento, coordinator of ITGLWF Philippines, even before the actual date
of MFA’s expiration, the difficulty of competing in the international market
is already being felt by the local garment industry as there are a number of
factories already shutting down operations. Because ITGLWF is a federation
of workers in the garment industry, its members deem it necessary that
they be at the forefront in addressing problems encountered by the workers
in the sector, especially with regard to the pending expiration of the MFA
(2005).
Prior to its initiative in the Philippines, ITGLWF sponsored an
international conference involving its affiliates in countries to be affected
by the MFA phaseout. In the said conference, a plan of action was
drawn whereby the ITGLWF national offices will initiate consultations
with the trade unions in the garment sector. ITGLWF also assessed
that although trade unions are aware and apprehensive about the effects
of the phaseout on the workers, nothing substantial is being done about
the situation.
In early 2003, ITGLWF Philippines initiated dialogues with its member
organizations as well as other labor organizations on what should be done
to prepare the workers for the quota phaseout. There were twenty
organizations which initially participated in the dialogues. The important
objectives of the dialogues are for the labor organizations to engage in
collective action and assess the efforts of employers and government in
connection with the quota phaseout. The initiative was eventually named
Labor Forum Beyond MFA. In the dialogues, the forum formulated the
eight-point labor agenda. The agenda was later presented to government
representatives from the GTEB, DTI, and DOLE. The GTEB eventually
took the role of organizing the succeeding dialogues among the
representatives of labor, management, and concerned government agencies.
134 People, Profit, and Politics
In these dialogues, the labor sector was represented not only by Labor
Forum Beyond MFA but also by BMP-Almagate and GARTEX.
The presentation of the eight-point action plan was very timely because
the GTEB at the time was preparing the industry transformation plan. In
the GTEB fora, management representatives were also able to air their
concerns about the impending MFA phaseout. They expressed that about
70 percent of the 320,000 registered workers will be adversely affected by
the quota phaseout. Adviento said that the actual number of workers to be
affected is much more as it is estimated that informal workers in the industry
easily fall in the 300,000-range.
The Garment, Textile and Allied Industries Labor Council is
spearheaded by the Fair Trade Alliance and is made up of eighteen
labor federations. Formed in November 2004, the council was put up
to address the issues faced by the garment and textile industries,
including those attendant to the expiration of the MFA. More
important, GARTEX is envisioned to take an active role in the
preservation and creation of jobs in the industry (Fair Trade Allianc e).
According to GARTEX lead convenor Angelito Mendoza (2005), the
alliance was also formed to answer the need of putting up an industry-
wide alliance in the absence of an industry-wide union. This way, the
alliance will be able to tackle the problems peculiar to the industry,
particularly the workers’. To drum up interest for its campaigns,
GARTEX has conducted several dialogues on issues besetting the
garment and textile industries with prominent media coverage. In these
dialogues, government representatives were often invited. GARTEX also
actively participated in government-initiated consultations on issues
related to garment and textile.
Two important things should be noted regarding these initiatives. First,
women are widely represented in these campaigns as they comprise a
substantial membership in the groups and federations that put up the
initiatives. Second, the media have been very helpful in making the
government, including the public, take notice of the issues raised by the
labor groups. Many of the fora conducted by the labor groups were covered
Confronting the Challenges in the Garment Industry 135
Internal resources
STRATEGIES. In engaging government, civil-society groups utilized both
the formal and informal means of intervention in their campaigns. It was
earlier shown how the labor groups made use of the formal venues in
engaging government. Formal venues are the dialogues and fora organized
by government with the NGOs.
One feature of a good strategy is its being able to discern the correct
venue to engage government to get the most out of the interaction (Wui
and Lopez 1997). In the case at hand, it can be said that civil-society
groups were able to choose the correct venue—which is the executive branch,
138 People, Profit, and Politics
External opportunities
Besides the resources internal to their organizations, the civil-society
organizations were able to take advantage of the opportunities presented
by their external environment.
INSTITUTIONAL OPENINGS. These are made possible particularly by the
expanding space for democratic and consultative processes evident in post-
EDSA governments. In the case at hand, labor groups made use of the
openings provided by DOLE, DTI, and GTEB to advance their agenda.
Nonetheless, it should be noted that these openings also became possible
because of the actions of the civil-society groups. As discussed in the case
study, through the pickets and rallies they staged in front of the government
offices and their initiatives to seek dialogues with the officials, government
made available more venues for the interaction.
140 People, Profit, and Politics
Conclusion
The discussion shows how civil-society groups were able to meaningfully
engage government because of their utilization of resources and
opportunities available to them both internally and externally. Although a
lot still needs to be done, one of their important achievements is the putting
up of the Clothing and Textile Industry Tripartite Council, an office entirely
devoted to the garment and textile industries. If it were not for the actions
of civil-society groups, government may not have acted on the need for a
body that would rationalize and set policy directions for the industries.25
Nonetheless, since the CTITC was formed only in April 2005, it remains
to be seen whether or not it will be able to address the long list of problems
voiced out by the civil-society groups. Although the industry has inherited
problems from the past, these have been compounded in the era of
globalization.
142 People, Profit, and Politics
plight more complex if not more difficult. Globalization has the effect of
putting downward pressure on the wages and benefits of the workers because
of the desire of government to make the domestic environment competitive
and attractive to foreign investments. It is said that the minimum wage is
pegged only at an amount barely enough to cover the daily cost of living
for a family of six (Angeles 2003), because of pressures from capitalists
including those operating transnational corporations (TNC). Government
usually accedes to the demands to prevent the capitalists, especially TNCs,
from transferring to production sites where the minimum wage is lower.
Also, the state is being overly concerned with maintaining a favorable
business climate for international capital, which has led to restrictions on
the activities of labor unions, as exemplified in the “no union, no strike”
policy in export processing zones supposedly to realize industrial peace.
But, as Angeles (2003) pointed out, “genuine industrial peace through
better labor-management cooperation can only take place when working
and living standards are improved.” Hence, rather than being overly fixated
on the activities of unions, government and management should devote
more efforts to the improvement of such standards.
Moreover, the globalization of production has been increasingly
characterized by the flexibilization of labor manifested in part-time,
temporary, casual, and subcontracted work. The feminization of labor forms
part of the flexibilization, which means that women are increasingly forced
out of the formal labor sector and are subjected to the disadvantages of
informal employment. Although government still needs to enforce
compliance among companies to observe the lawful entitlements of workers
in the formal sector, it should also be able to focus on the needs of those in
the informal sector. After all, the latter make up a substantial portion of
those working in the garment industry. Besides the fundamental
requirement of protecting their human and labor rights, other
recommendations of the labor groups for those in the informal sector is
their inclusion in PhilHealth and Pag-IBIG coverage.
The effect of the footloose nature of capital due to globalization is seen
in the recent closures of garment factories in the country, as companies
144 People, Profit, and Politics
Notes
1. This was pointed out by Rosalinda Pineda-Ofreneo in her review of my paper.
2. According to Angelito Mendoza, lead convenor of the Garments, Textile and Allied
Industries Labor Council or GARTEX Labor Council, the tariff rates for imported
garments should be placed at 30 percent so as to provide protection for our local
producers. The biggest threat to our local producers are those coming from China
whose products mostly cater to mass consumers.
3. The extent of smuggling is described thus: “the volume of smuggled yarn, fabrics
and garments was placed at 151,000 metric tons, or 51 percent of the estimated
300,000 metric tons imported into the country (based on a per capita consumption
of four kilograms for an estimated total population of 75 million)” (Bacalla 2004).
4. Ideally, there should be a close association between the garment and textile industries
as our local textile industry should be the source of materials for garment production.
Although in other countries the linkage between the two industries is well-established
(especially in the case of successful garments exporters like China and South Korea),
this is not the case in the Philippines (Austria 1994, 10).
5. In the early 1960s, the garment industry started to experience growth through the
enactment of the Embroidery Act (RA 3137) in 1961. Companies registered under
the Act “were allowed to import raw materials free of duties and taxes” (Austria
1994, 12). Other important legislation that led to the growth of the garments
export are: The Exports Incentive Act (RA 6135) in 1970, Act creating the Export
Processing Zones (RA 5499 and PD 66) in 1972, and Executive Order 537 creating
the Garment and Textile Export Board (GTEB) in 1979 (Pineda-Ofreneo 1989).
The GTEB was in charge of integrating and rationalizing government policies and
procedures governing the Philippine garment industry (GTEB). However, the
main bulk of the work of GTEB was the allocation of the MFA quota to contractors.
Hence, with the abrogation of the MFA, the GTEB was also abolished.
6. However, some studies contend that the country will gain from the MFA phaseout
as it will “increase the market access of the country in the world market, particularly
in the industrialized countries” with the abolition of the quota restrictions (Austria
1996, 29). The country could focus on products where it has comparative advantage.
Moreover, our workers’ skills for detailed embroidery is another area where our
garments industry could be globally competitive (Austria 1996, 20). Donald Dee,
146 People, Profit, and Politics
president of the Philippine Chamber of Commerce and Industry (PCCI), said our
current strengths are washed-out denims and high-end T-shirts.
7. In the discussion, it would be helpful to use a study conducted by the Third World
Studies Center (TWSC) in framing the opinions of the respondents. The TWSC
study examined the perspectives and positions of a particular segment of civil-
society groups in the Philippines that have been critical or wary of globalization. A
portion of the study examined how the groups define globalization. The
characterizations given by the respondents of the study were grouped under the
following categories: economic, political, social, technological, and cultural (Frago,
Quinsaat, and Viajar 2004).
Among the responses characterizing globalization that were grouped under the
economic category are: neoliberalism, global capitalism, openness, interdependence,
competition among developing and developed countries, and imperialism. Under
the political dimension, responses—such as mutual imposition of treaties,
conventions and instruments by member nations of international bodies;
marginalization of Southern countries; abdication of state responsibilities; and
neocolonialism—were found. For the social aspect, the research elicited the following
responses: threat to the poor and workers, solidarity of civil-society groups, and
threat to informal sectors. Under the technological dimension, the responses include
advancement in technology; and worldwide spread of knowledge, ideas, and
information. Homogenization, cultural aggression by the West/the US,
counterdiversity, and cultural interchanges were found in the cultural dimension.
For this study, the economic, political, and social categories will be used to
understand how globalization has affected the garment industry. In the ensuing
discussion, however, the economic and political dimensions are combined to
accommodate overlaps in the responses of the respondents.
8. The data of GTEB, however, show that despite the closures there is net increase in
the number of factories setting up operation in the Philippines. Donald Dee,
president of the Chamber of Commerce and Industry, nonetheless said that these
newly opened factories will not stay long in the country as the owners are just
assessing the situation in China before they finally move their operations there.
9. Describing the present composition of companies, Ofreneo wrote that they usually
maintain a “shrinking force of regular workers and an expanding army of irregulars,
variedly called by union organizers as casuals, contractuals, 5-5 workers” (2003,
46). However, Cielito Habito in his written review of this book’s manuscript pointed
out the benefits of subcontracting. He wrote, subcontracting “has been instrumental
in other countries in the promotion and development of the small and medium
Confronting the Challenges in the Garment Industry 147
percent), forced labor (20 percent), and freedom of association (15 percent).
However, according to the paper’s reviewer, Rosalinda Pineda-Ofreneo,
the monitoring of codes of conduct is problematic as workers, even if
organized, feel obliged to lie to save their jobs. This conclusion is further
discussed in Lund and Nicholson (2003).
16. E-mail response of Roy Velez of the Kilusang Mayo Uno to my inquiry dated
August 1, 2005.
17. In some countries in South Africa, the trade of secondhand clothing has led to
the collapse of their garment industries (International Textile, Garment and Leather
Workers’ Federation).
18. Hutchison (2001) identified the following factors why subcontracting is
widely practiced in the Philippines. “First, the nature of the sewing technology
utilized in the industry—there is no integrated production line. After cutting
the garment’s pattern, one worker can finish the whole work with the use of
a sewing machine. Sewing machines can also be easily installed at home or
in production areas utilizing limited space… Second, sub-contracting is
practiced to reduce labor costs and/or to prevent the intervention of unions.
Workers in small sub-contracting arrangements receive lower wages than
those working in large factories. In addition, because regular workers are
spared from rendering long hours of work to meet quotas and deadlines,
manufacturers are therefore able to prevent possible complaints and demands
coming from unions.”
19. A number of the respondents nonetheless said that government should do serious
housekeeping to improve the economy and make more jobs available for the
workforce. Retraining the garment workers for other jobs is useless if alternative
jobs are not available.
20. Some informal workers already avail themselves of PhilHealth benefits as indigents
or paying members. However, information about and access to PhilHealth benefits
are still extremely limited. This was pointed out by Rosalinda Pineda-Ofreneo in her
review of my paper.
In the Philippines, a substantial number of subcontracted workers do their work
at home. The latter are also known as homeworkers. In the garment industry, women
make up most of the workers in the informal sector. As informal workers, they work
without secure contracts, worker benefits, or social security/protection (Lund and
Nicholson 2003, 15). Social security covers the core contingencies of: health care,
incapacity for work due to illness, disability through work, unemployment, maternity,
child maintenance, invalidity, old age, and death of a breadwinner (Lund and
Confronting the Challenges in the Garment Industry 149
Government should not end with the extension of financial support; it should also
help in the marketing and promotion of the products sewn by the workers. It
should help launch campaign with the public to buy the “unbranded” products
that are as good as the more expensive branded imported products (Arellano 2004).
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154 People, Profit, and Politics
Balancing Consumer and
Corporate Interests in the
Telecommunications Industry
Ronald C. Molmisa
A
s countries throughout the globe attempt to become economically
competitive, the Philippine government embarked on reforms to
open up the telecommunications industry in early 1990s. There
was a realization that the poor telecommunications infrastructure has been
dragging the economy down (Shooshan and Temin 1999, 2). Overall,
liberalization has affected the local industry in three ways—global
operations, regional and multilateral agreements, and new global services
(International Telecommunications Union 2002, 4). Almost all major
telecommunication companies (telcos) in the country have strategic foreign
partners and investors. Economic policymakers ascribed the country’s
telecommunications sector improvement and competitiveness in the world
market to its participation in regional trading arrangements under the
auspices of the World Trade Organization (WTO), the ASEAN Free Trade
Agreement (AFTA), the Asia-Pacific Economic Cooperation (APEC), and
the International Telecommunications Union (ITU), among others, which
provide policy assistance in addressing local industrial issues. Advancement
in information and communication technology introduced new services
in the market like mobile phone roaming, global satellite systems, and
third-generation (3G) services that industry players enhance and maximize.
155
156 People, Profit, and Politics
The main problem, however, is that the sector was liberalized even before
the basic need for telecommunication service was satisfied. This brought
serious issues, which industry players, especially the telcos, have to contend
with.
This paper is an exploratory research on state-civil society relations in
the Philippine telecommunications industry. It aims to accomplish three
things:
1)to describe and analyze the dynamics and means of intervention
used by civil society organizations (CSOs) in engaging the state in
the context of liberalization.
2)to explain the factors that accounted for CSOs’ success in terms of
policy outcomes. By looking at political opportunity structures,
this paper explores how civil society organizations are able to
maximize available internal and external resources and how these
translate to their success or failure (Kitschelt 1986).
3)to provide recommendations on how to strengthen state-civil society
relations in the industry.
In order to accomplish the above-mentioned objectives, this paper
is organized in three sections. The first part provides the structure of
the industry before and after its liberalization, the current regulatory
framework, and a discussion of the evolution of telecommunication
policies in the country vis-à-vis the story of the monopoly of the
Philippine Long Distance Telephone Company (PLDT). The next
section delves into the state-civil society relations in the industry.
Apparently, the weaknesses of the National Telecommunications
Commission (NTC) as an industry regulator reflect the vulnerability
of the state in the face of liberalization. The lack of active civil society
organizations in the industry augurs well for the strong involvement of
the business sector in engaging the state in policy debates and
discussions. The experiences of TxtPower and the Philippine Internet
Services Organization (PISO) are discussed to demonstrate how civil-
society groups operate amid political opportunities and constraints. The
Balancing Consumer and Corporate Interests in the Telecommunications Industry 157
1992 56,004
1993 102, 400 83.00
1994 171, 903 68.00
1995 493, 862 187.00
1996 959,024 94.00
1997 1343,620 40.00
1998 1,733,652 29.00
1999 2,849,880 64.30
2000 6,454,359 126.00
2001 12,159,163 88.80
2002 15,383,001 26.50
2003 22,509,560 46.33
2004 33,400,000 48.54
Institutional Framework
hand, the Telof is one of the four sectoral offices of the DOTC tasked to
provide basic communication services in almost all the localities in the
country. It was called the Bureau of Telecommunications when it was
established under EO 94 approved in 1947. Its name was changed to
Telecommunications Office when EO 125 called for the comprehensive
reorganization of the government in 1987.
On the other hand, the NTC is a quasi-judicial office that acts as the
regulatory arm of the DOTC and was authorized to be the principal overseer
of the provisions of RA 7925 or the Philippine Telecommunications Act
of 1995. The NTC was created in 1979 pursuant to President Marcos’s
EO 546. It was later attached to the DOTC in 1987. The NTC is mandated
to regulate the entry of qualified service providers and to adopt a pricing
policy that would generate sufficient returns. It establishes rates and tariffs
that provide for the economic viability of telecom entities and a fair return
on their investment, considering the prevailing cost of capital in the
domestic and international markets. In principle, the NTC does not
interfere as far as market and pricing issues among telecom players are
concerned. The commission allows them, on their own initiative, to
negotiate and enter into interconnection agreement subject to technical,
commercial, and operational rules (Heceta 2004). In cases of refusal to
negotiate or failed negotiation, the commission, upon the complaint of
any interested party or upon its own initiative, intervenes and assumes
jurisdiction and sets the terms and conditions it may find appropriate for
the case. In case of mediation, the NTC, on its own initiative at any stage
of negotiation, can intervene and mediate between parties. Any agreement
reached by parties should be submitted to the commission for approval
within ten days from the execution of the agreement. Insofar as its quasi-
judicial functions were concerned, the orders and decisions of the NTC
were final, except when appealed to the Supreme Court of the Philippines.
Legal Framework
Development Plan (MTPDP) for 2004-2010 calls for the fixing of the
term of commission members to “insulate them from political and other
outside pressures” (NEDA 2004, 21), there are still no measures
implemented toward this goal.
Previous issuances and statutory powers of the NTC are now seen as
limited and outdated in the face of the advancement of information and
communication technologies (ICTs) and recent industry developments.
The lack of technology-specific rules often frustrates the government’s desire
to promote competition and level the playing field. The narrow and
prescriptive policies that guide the industry must be reviewed to cope with
the advancement in ICTs (i.e., VoIP, Wi-Fi/Max) and adapt to current
market realities. Often, the agency’s “wait-and-see” disposition in resolving
market conflicts can be ascribed to the lack of implementing guidelines
and policies. What was considered as a value-added service (VAS)7 fifteen
years ago is now considered either as a basic telecommunication service or
a dead technology (i.e., pagers). One big step to this end is to amend RA
7925 and review the National Telecommunications Development Plan
(NTDP) that DOTC created in 1990 for them to provide a fresh vision
for the industry. Drafting a regulatory framework for ICT-enabled industries
could resolve the current technological dilemmas. At present, there is no
government agency that regulates the Internet, particularly its contents
(e.g., pornography, gambling, sale of illegal firearms and drugs, and terrorist
activities). As such, President Arroyo’s issuance of EO 269 creating the
Commission on Information and Communication Technology is a good
development. Another obstacle concerns NTC’s lack of pertinent
information on the operations of the industry players. The dependence of
the agency mostly on the information being supplied by the regulatees
brings serious issues because not all of them comply with reportorial
obligations. At present, the agency does not have a database system of
industry trends and reports that would facilitate decision making.
The operation of the Web-based texting-service company Chikka Asia
Inc. was questioned by the NTC because of its provision of cheaper texting
services for the public. The company’s website, www.chikka.com, has
Balancing Consumer and Corporate Interests in the Telecommunications Industry 171
1.7 million fixed lines of PLDT, and vice versa. The dispute was highlighted
by the unilateral move by BayanTel to cut off 200,000 of its subscribers
from Smart. This was followed by the disconnection of Globe Handyphone
subscribers from PLDT networks. PLDT argued that it was due to
computer glitch while Globe ascribed the incident to sabotage. Islacom
also complained of its interconnection problems with the IGFs of PLDT
despite the former’s repeated requests for linkup. President Joseph Estrada
needed to summon the telco executives in November 16, 1999, to an
emergency meeting to resolve the interconnection mess.
Wi-Fi, and online privacy are considered highly technical matters that
ordinary people cannot easily appreciate. Sensitive social and political issues
are often the ones that reach the congressional halls, press rooms, and the
attention of the public. The mobile phone text-tax issue reached its height
because texting has been increasingly regarded as a basic necessity among
ordinary Filipinos, especially in the National Capital Region.
The expected prime mover and forerunner of CSOs in the industry—
the consumer movement—is either lethargic or nonexistent. History is
summoned to show that there are no strong and sustainable consumer
groups in the country. Emerging organizations have been sector- and
product-specific, which could best explain the fragmented nature of mass
actions. The issue of increasing oil prices should have been a concern by
ordinary consumers, but transportation groups and labor unions have been
174 People, Profit, and Politics
the ones that seize the issue by default. Further, consumer groups
disintegrate whenever companies pay off and/or pacify erring complainants.
Rep. Gilbert Remulla (second district, Cavite) (2004) perceives the
deficiency in consumer groups as unfavorable to any legislation that aims
to protect telecom consumers. In the Thirteenth Congress, he filed House
Bill 2452, entitled “Truth in Mobile Telephone Billing Act,” requiring the
six-pulse rate and billing per-second breakdown of the call usage of mobile
phone subscribers seven days after the expiration or consumption of their
prepaid cards. In August 24, 2004, a press conference on the proposal was
covered by the broadcast media but it was not recognized in the print
media. Remulla attributed the incident to the economic influence of telcos,
which he described as the largest advertising customers of broadsheets and
tabloids. Another problem is the absence of a critical mass that could rally
behind his proposal. He asserted, “There are no big consumer groups and
you don’t see them massing on the street rallying. You can only see them in
the media saying to boycott for one day and that’s all.”
The Philippine League for Democratic Telecommunications Inc. is a
consumer advocacy group that emerged as a response to the PLDT metering
proposal and rate balancing in early 1999. PLDTi vehemently opposed
the measure and argued that telephone metering should be merely optional,
alongside the current flat-rate system, if ever it is to be allowed. To
demonopolize the industry, the organization once proposed that the
government must consider breaking the PLDT into its component services
as well as into several regional companies, just like what the US did with
the AT&T. Dividing the industry behemoth could provide a level playing
field to all market players. When the metering issue subsided, PLDTi
continued its function as an industry watchdog. The organization, along
with four other individuals, filed a case in 2001 against the telcos concerning
the reduction of free texts in prepaid cards. Although a Quezon City
Regional Trial Court judge dismissed the complaint on September 14,
2001, saying that it has no jurisdiction over the case, the drastic text-
reduction plan failed. The NTC earlier said that text is a value-added service,
hence deregulated.
Balancing Consumer and Corporate Interests in the Telecommunications Industry 175
Raymond Palatino, vice president of the Anak ng Bayan Youth Party; Emil
Cinco, leading member of the Computer Professionals Union (CPU); Trixie
Concepcion, Philippine coordinator of the Earth Island Institute and
Agham secretary-general; Gerry Kaimo, net-activist and webmaster of
PLDT.com; Atom Araullo, media personality and student leader; and
Ederic Eder, editor of youth e-zine Tinig.com. Past convenors include UP
professors Tonchi Tinio and Roland Tolentino, triathlete Sandra Araullo,
campus journalists Len Olea and Rey Asis, and visual artist Emil Mercado.
TxtPower considers itself as the first consumer group that represented the
cause of mobile phone users. Affiliated groups include Agham, Gabriela,
Anak ng Bayan, Computer Professionals Union (CPU), Migrante, College
Editors Guild of the Philippines (CEGP), National Union of Students of
the Philippines (NUSP), Bagong Alyansang Makabayan, among others.
When President Arroyo signified her intention to impose taxes on text
messaging in her 2004 State of the Nation Address (SONA), TxtPower
immediately responded by holding a media event titled “P1 Billion Fun
Run” on August 1, 2004, at the controversial President Diosdado Macapagal
Avenue10 as a symbolic act of protest against text tax and government
corruption. The campaign was supported by Overseas Filipino Workers’
Laban sa TextTax (OFWLaST), arguing that the tax on text messages will
certainly have adverse social effects on them. Many OFWs have been using
SMS to get in touch with their children, husbands, wives, and relatives in
the country. A week after, a text protest barrage was performed calling for
all text users to relay the following message after receiving:
Txtrs, REVOLT! B part of history, join 2day’s cyber-rally. Snd NO 2 TXT-
TAX 2 d ofc of speakr JdV 0917-8101226! Join TxtPower piket @ 2pm
outsyd congrs. Pls pas. (Texters, Revolt! Be part of history. Join today’s cyber-
rally. Send NO to Text Tax to the office of Speaker JDV [Jose De Venecia],
0917-8101226! Join TxtPower picket at 2 p.m. outside Congress. Please
pass.)
landline calls, even radio and television broadcasting. This will be eventually
passed on to all kinds of services provided by telecommunications
companies (Casiño 2004). Major telcos favored more the imposition of
an expanded value-added tax and not a franchise tax or text tax (Reyes
2004).11 After a close-door meeting with telco executives, President Arroyo
was convinced not to impose the franchise tax. Malacañang instead push a
VAT system on telecom providers that will be raised from current 10 percent
to between 12 and 14 percent (Cabacungan and Pablo 2004).
TxtPower confronted other burning concerns. It initiated debates and
mass actions on the issues of 1) drop calls (i.e., some subscribers being
charged with calls they were not able to make), 2) the limited period
imposed by telcos for the use of prepaid load credits (i.e., Smart and Globe
prepaid credits must be consumed three months starting the day it is
loaded), and the 3) subscriber identity modules (SIM) card listing proposal
of Rep. Joseph Santiago (National People’s Coalition–Catanduanes) during
the Twelfth Congress. While the SIM card listing proposal was watered
down by the lawmakers when it was first deliberated in the House
Committee on Human Rights, judging the measure as impractical,
unrealistic, and unachievable, the other issues are currently being deliberated
in the House Committees on Information and Communication Technology
and Trade and Industry.
The government provided several avenues to accommodate the group,
but not all of them have been useful. Convenors were invited to committee
hearings, formal dialogues with legislators, and government-sponsored fora
but they had modest success in achieving their targets through these avenues.
The group explained that agency executives offered delayed responses to
the recommendations they laid down, not to mention some policy
digressions politicians commit in the actual policy drafting and
implementation. But as far as the convenors are concerned, the biggest
stumbling block to their mission is the state’s refusal to recognize the rights
of consumers due to its flawed policies of deregulation, privatization, and
liberalization. Hence, the organization sees itself as having virtually no
power, no recourse in the law. One of the convenors lamented that if they
180 People, Profit, and Politics
would file a case against a government agency, they would not surely win
it because the government has hands-off policy even on issues of consumer
rights. More so, there are no institutional mechanisms to protect the
consumers. Any interaction with government will prove useless in the
process. Overall, the organization calls for the repeal of the law deregulating
the telecommunications industry, which it calls as anathema to people’s
welfare.
The lack of resources and formal organizational hierarchy, although
not vital problems, still hampers the expansion of the organization.
Problems arose when convenors have prior campaign schedules, making
the all-present representation in mass action almost impossible. Nonetheless,
TxtPower’s loose organizational setup is advantageous. It enables quick
decision-making, action, and consensus in the group. The broad and
multisectoral composition of the coalition facilitates the easy recognition
by the government of its presence and campaigns. Intra-organizational
linkages offer logistical assistance among members of the network, which
come in the form of meeting venues, studies, focus group discussions, and
launching of mass actions and campaigns. The group is looking forward
to wider memberships in the next few years. A wider and bigger network
can make TxtPower’s operations more comprehensive and responsive to
the clamor of the mobile phone users even outside the National Capital
Region. It has already established chapters in major cities of the country
and one in Hong Kong.
Public campaigns using text, Internet, and the broadcast media are
considered the most effective means to contest state policies and solicit
support from the public. The mass media was used to popularize the issue
and inform the people of their communication rights. As people became
more aware of the issue, they started to air their discontent with the
government’s lack of protection for consumers. Hence, protest rallies of
TxtPower against “text tax” received overwhelming support from mobile
phone subscribers. In addition, the Internet is being maximized to propagate
campaign text messages through e-mails and e-groups within a relatively
short period. The group is being technically supported by the Computer
Balancing Consumer and Corporate Interests in the Telecommunications Industry 181
service. There is consensus among ISPs and similar business groups that
preventing the growth of the VoIP industry is detrimental to the public
who should reap the benefits of emerging technologies. J.J. Disini (2005)
of the UP College of Law wrote that any failure to deregulate the technology
would provide opportunities for foreign players to dominate the industry.
Further, local business entities and players must be given an opportunity
to use the technology in minimizing the costs of their operations.
Telcos were silent on the VoIP issue when it first surfaced in 2001.
When ISPs started to assert their collective position, the telcos commenced
their fight mostly by hurling legal arguments at the NTC and the VAS
providers. Local telcos are understandably anxious that VoIP technology
could render their usual circuit-switching networks obsolete. PLDT, for
instance, has launched in early 2005 its PHP 10 unlimited calling (landline
to mobile phone and vice versa) to maximize the use of its switching
networks. Although majority of telcos support the classification of VoIP as
a telecommunication service, they have variegated ways of justifying the
argument. In a forum organized by the Telecommunication Users Group
of the Philippines (TUGP) on March 31, 2004, at Mandarin Hotel, Makati
City, May Sto. Domingo, Philcom assitant vice president for business
solutions, said that VoIP is already in itself an “opportunity to bring back
what revenues are currently being lost by telcos because of the emerging
technology.”
The Philippine Chamber of Telecommunication Operators Inc.
(PCTO)—composed of BayanTel, Capwire, Digitel, Extelcom, Globetel,
Innove, PAPTELCO, Piltel, PHILCOM, PLDT, SMART, and TTPI—
contends that any process that relays and receives voice is a
telecommunication service irrelevant of the means it is being transmitted.
Although VoIP is a mix of voice and data technologies, the application is
still voice in nature. PLDT submitted a separate position paper saying
that the VoIP has always been a telecommunication service, citing the
1995 landmark case between PLDT and NTC–Eastern
Telecommunications Philippines Inc. Bell Telecoms supports this position
saying that only telcos must be allowed to offer VoIP to the public. In a
Balancing Consumer and Corporate Interests in the Telecommunications Industry 185
Conclusion
This paper presented an empirically-grounded analysis of state-civil
society relations in the telecommunications industry. One prominent
observation is that liberalization has a direct impact on the way civil society
engages the state and the market actors. State’s weaknesses to effectively
control the market pose serious challenges to CSOs. This means that they
do not only have to engage the government (to rectify its shortcomings
and failures) but also have to contend with industry players, which have
more resources and political clout. The weak force of mass-based civil-
society groups can be gleaned from their inability to participate in important
fora and debates. With the lack of representation, state agencies obtain
only the opinions and demands of dominant market groups. This explains
why the business sector groups influence more policy outcomes.
Both TxtPower and PISO utilized formal and informal means of
intervention. To some extent, their perception of the state determined the
strategies they utilized. Confrontation defined the relationship between
Balancing Consumer and Corporate Interests in the Telecommunications Industry 187
the state and TxtPower because of the latter’s negative perception of the
former as the protector of the interest of the dominant, elite class. TxtPower
recognizes its limitation in influencing the government’s deregulation
policies. In fact, it sees itself as virtually having no power in the context of
a deregulated telecommunications industry. Resorting to indirect, informal
intervention like mass actions is deemed more effective in gaining political
support. Political leaders are often enticed to support advocacies that evoke
wide public support. Street protests, petition signing, mass education in
fora and seminars, public consultation talks, media press conferences, and
networking with legislators are essential in achieving this end. On the
opposite, cooperation characterizes the interaction among the ISPs, telcos,
and NTC officials in resolving the VoIP question. This can be attributed
to the common goal of the government and industry stakeholders to end
the legal impasse that has hampered the development of the VoIP
technology for more than a decade. Stakeholders, especially the telcos,
actively participated in public consultations with the view of influencing
the NTC’s ruling on the issue.
Discerning the right venue of engagement is crucial in the success of
any campaign. TxtPower first organized the public for a concerted action.
This was facilitated by forging alliances with various groups in different
sectors. Upon having the critical mass of supporters, TxtPower began to
lobby politicians and policymakers in Congress. Simultaneous actions to
mobilize the public through massive education and active engagement of
the state provided more impetus for ongoing campaigns. In the same
manner, PISO constantly participated in public discussions and fora
initiated by the NTC and industry organizations.
The two case studies have shown how internal and external resources
could produce successful state-civil society engagement. PISO’s technical
know-how helped justify the VAS nature of the VoIP technology and
debunk the legal arguments of the telcos. TxtPower, with the support of
the Computer Professionals Union (CPU) and other like-minded
organizations, maximized the use of the Internet to disseminate information
and expand the reach of its campaigns. TxtPower did not find it difficult
188 People, Profit, and Politics
Notes
1. Major telcos compete in providing the cheapest service in the market. Digitel
brand SunCellular first offered in 2004 its unlimited call plan (24/7) to Sun-to-
Sun mobile phone numbers. Globe started in March 2005, through its Touch
Mobile brand, its thirty-day promo of unlimited one-month Touch Mobile to
Touch Mobile calls and texts for PHP 300 and PHP 50 for five days of unlimited
text messaging. PLDT’s two wireless units, Smart Communications Inc. and
Pilipino Telephone Corp. (Piltel), launched its unlimited call scheme (dubbed
25/8) in March 2005 to counter SunCellular’s and Innove’s mobile phone
subscription plans.
2. See Pulse/PNA 2005.
3. One major reason is that mobile subscription costs only around PHP 300 a
month through a prepaid card with text messaging service, compared to the
minimum PHP 600 monthly subscription to a fixed telephone. Cellular phone
users also enjoy the luxury of mobility and a personalized number, which they
can change anytime just by purchasing a SIM card.
4. The chairperson of the CICT is part of the DOTC leadership. He/she directly
reports to the president about ICT matters and to the DOTC secretary for his/
her agency responsibilities.
5. PLDT’s predominance can be traced to the adoption of the American colonial
government’s model of natural monopoly. By the virtue of the 1928 Philippine
Legislature Act 3436 passed on November 28, 1928, PLDT was first given a
fifty-year franchise to develop the telecommunications infrastructure of the
country. The franchise was extended until 2028. The Marcos government helped
Ramon Cojuangco, the first PLDT president, and his associates acquire control
over PLDT while the Aquino administration nurtured the company by placing
individuals in the company who could safeguard the interests of the Cojuangco
family.
190 People, Profit, and Politics
6. Under the text scam, hoax messages are being sent to the unsuspecting victims
using the name of the Bangko Sentral ng Pilipinas, the Philippine Charity
Sweepstakes, the Philippine Amusement and Gaming Corporation and other
institutions advising the victims about winning a huge amount of prize. The
swindlers often instruct their prey that the latter should first deposit a considerable
sum of money to the former’s bank account, allegedly for tax payments and
other fees, as a requirement to getting the prize.
7. VAS is defined as enhanced services beyond those ordinarily provided for by
local exchange operators, inter-exchange operators and overseas carriers, including
Internet services. A VAS provider does not set up its own network and relies
solely on the transmission, switching and local distribution facilities of
enfranchised telephone companies. Hence, it does not need to secure a franchise
in order to operate but only a registration with the NTC (RA 7925, article 1,
section 3h).
8. Interconnection guidelines can be found in 1) RA 7925 (article 2, section 4g;
article 3, section 5c; article 4, sections 8d, 9a, 11b; article 6, section 18), 2) EO
59 (section 56), and 3) EO 109 (article 5, sections 22 and 28).
9. With the help of his topnotch technocrats, former president Ramos utilized the
social sector to further his demonopolization project. They formed the group
MorePhones to assail PLDT’s inefficient service. MorePhones accentuated the
distrust of the people toward the inefficient service of PLDT. The campaign
lasted for about three months and was characterized by anti-PLDT press releases
and numerous fora and press conferences.
10. The road was named after a former Philippine president and father of President
Gloria Macapagal Arroyo. The government spent PHP 1 billion to construct the
one-kilometer avenue.
11. Telcos are already paying a 10 percent VAT on all services, 32 percent income
tax, 10 percent overseas communication tax, and other various fees and charges
for licenses to the National Telecommunications Commission.
12. An E1/R2 is a leased line composed of 30 lines that can accommodate 30
simultaneous calls at 56 kilobytes per second (kbps). PISO filed four charges
against PLDT. First, for its unreasonable and discriminatory pricing of E1/R2
lines. Second, for its involvement in predatory pricing in order to eliminate
competition. Third, for its delayed action on the request of PISO on access to its
DSL infrastructure which is tantamount to denial of access. And fourth, for its
denial of access regarding the request of PISO to access its VIBE Service for
domestic dial-up Internet service.
Balancing Consumer and Corporate Interests in the Telecommunications Industry 191
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Albano, Noel. 2004. No to tax on text messaging: JDV. House of Representatives.
http://www.congress. gov.ph/press/details.ph?pressid=377 (accessed August
10).
Aldaba, Rafaelita. 2000. Opening up the Philippine telecommunications industry to
competition. World Bank Institute: World Bank.
Alegre, Alan (executive director, Foundation for Media Alternatives). 2004.
Interview by Ronald C. Molmisa. Tape Recording. September 9.
Alonzo, Ruperto, and Wilbert San Pedro.1997. Infrastructure and sustainability
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still massive and mobile still rules. IT Matters. http://itmatters.com.ph/news/
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———. 2005. NTC stops chikka.com mobile services. IT Matters. http://
www.itmatters. com.ph/news/news_02142005a.html (accessed February 10,
2005).
Cabacungan, Gil C., and Carlito Pablo. 2004. Telcos convince Arroyo: Palace
opts for hiked VAT over franchised tax. Inq7.net, December 06. http://
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6).
Cabanda, Emilyn. 2002. A comparative study of Asian telecommunications
policy reforms: Japan, Malaysia, and the Philippines. E-ASPAC. http://
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Casiño, Teodoro. 2004. Franchise tax on telcos worse than text tax. Press statement.
December 2.
Collander, David, ed. 1984. Neoclassical political economy: The analysis of rent
seeking and DUP activities. Cambridge MA: Ballinger.
Concio, Joseph (operations manager, PLDT-Netvoice). 2004. Interview by Ronald
C. Molmisa. Tape recording. November 11.
Coronel, Sheila S. 1998. Monopoly. In Pork and other perks, corruptions and
governance in the Philippines, ed. Sheila S. Coronel, 112-149. Quezon City:
192 People, Profit, and Politics
———. 2004b. Democratic space: Here’s what we get for making the Philippines
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196 People, Profit, and Politics
Conclusion: Palliatives for
“Globalization with a Human Face”
Teresa S. Encarnacion Tadem
I
n determining whether globalization has indeed brought about positive
or negative outcomes in the concerned industries—vegetable, hog,
garment, and telecommunications—the case studies initially looked
into the state of these industries before trade liberalization.1 The nature of
state-civil society engagement during this period was also examined. Among
those studied, the Philippine vegetable industry, prior to liberalization,
had generally been the most underdeveloped and lacking in government
support, although it had survived as it held a monopoly on its target
domestic market. The situation is different for the garment industry, which
experienced growth in the past three decades on account of the Multi-
Fiber Arrangement (MFA) whose quota system assured local garment
manufacturers overseas markets for their products. Garments became a
major dollar earner for the country through the MFA, even as the industry
benefited from the state’s export-led industrialization policy. Similarly, the
hog industry, though not export-driven, profited much, buoyed by the
Filipinos’ penchant for pork. Though industry players have expressed their
apprehensions regarding the importation—and smuggling—of meat
products, profit from hog raising can still be realized. As for the
telecommunications industry, the absence of market competition before
liberalization had left it in dire straits. The introduction of new players in
197
198 People, Profit, and Politics
from the cheaper products in these industries, and so, why protest
against trade liberalization?
For the vegetable and hog industries, trade liberalization began during
the country’s ascension to the World Trade Organization’s (WTO) rules
and regulations, which had a direct impact on these two industries.
During the same period, in the Ramos administration, the
telecommunications monopoly was broken up beginning in 1992.
Trade liberalization for the garment industry, on the other hand, began
in the 1970s under Marcos’s martial law regime, when the state pursued
an export-oriented industrialization program under the auspices of the
World Bank and the International Monetary Fund (IMF). Therefore, state-
civil society relations in the industry was discussed within the context of
the shift from an authoritarian to a democratic regime, i.e., in 1986. One
may also consider this period as the “pre-neoliberalism” period in the
garment industry, in which the authoritarian state had a heavy hand in
determining the industry’s development thrust. A major question that
emerged during the period was whether the process of democratization
had a distinct impact on state-civil society relations.
The Benguet vegetable farmers before trade liberalization exercised
little political clout to gain state support for their industry despite its
importance to the province’s economy. The weakness in their bargaining
leverage may have stemmed from the lack of demand for vegetables. But
because these farmers enjoyed a sort of market monopoly, there had been
no need for them to engage the state. Also, vegetable farming is a high-risk
enterprise, providing farmers very little incentive. Furthermore, vegetable
is not a political (or major) crop in the Philippines insofar as the number
of farmers, the total area planted/harvested, and its contribution to the
economy (GDP, gross-value added, etc.) are concerned. In the era of
globalization, instead of fighting for government support, the farmers
simply considered alternative means of livelihood.
Conclusion 201
The same cannot be said of the garment and hog industries. As one of
the country’s top dollar earners, the garment industry’s captains enjoyed a
privileged position, particularly with the MFA and the demand for
Philippine exports as facilitated by the boom in garment industries in the
First World. But state-civil society engagement in the garment industry
had differential impact on the stakeholders. That is, the owners/employers
had the bargaining leverage vis-à-vis the state because they were the ones
who profited from the earnings. However, the same could not be said of
the industry’s laborers. As pointed out in the case study, workers have been
exploited not only in terms of low wages but also in terms of inhuman
working conditions. This had been exacerbated by the political dispensation
at the time, i.e., the Martial Law period, in which political and civil rights
were curtailed. Thus, for example, the workers could not strike. Stripped
of their political rights, the workers, like the vegetable farmers, also did
not have the economic clout to engage the state. But unlike the vegetable
farmers, the garment workers benefited from the labor unions, particularly
those organized by the militant Left movement, i.e., those identified with
the Communist Party of the Philippines (CPP), which strengthened
particularly during the Martial Law period. The broadening protest
movement against Marcos’s repressive regime provided the workers the
political opportunity to organize and demand for higher wages and better
working conditions. One, therefore, had a situation in which profit CSOs
were allied with nonprofit CSOs. It was unfortunate that, first, the Left
did not organize the workers in a sectoral manner, i.e., attention was given
to the sector in general and not the specific demands of each sector. Second,
workers’ rights were integrated into the overall revolutionary struggle, so
that the Left was more concerned with what the workers’ movements could
contribute to the overthrow of the government and the establishment of a
revolutionary society rather than what kind of reforms could improve the
workers’ conditions. And lastly, even at the height of its organization, only
10 percent of the workers were organized.
The hog industry apparently saw no need to engage the state since it
has always been a profit-making venture. And even if it had to, it had the
economic clout to pursue such an engagement.
202 People, Profit, and Politics
at what cost? The cost lies in the aspect of the sustainability of an economy
that can no longer compete with foreign goods, resulting in the ultimate
deaths of key industries, i.e., vegetable, hog, and garments.
Based on the case studies, local producers argue that globalization does
not provide an environment conducive to the creation of political
opportunities for long-term development, particularly in the development
of a domestic market for local products. With globalization’s class bias,
even if the imported vegetables, pork, and garments are cheaper, who can
afford to buy these? Certainly not the Benguet vegetable farmers and the
garment workers who have been laid off because their industries can no
longer compete with their foreign counterparts on account of liberalization.
There is need, too, to disaggregate the consumers, particularly with regard
to those who can actually afford to eat three meals a day and those who
cannot. Certainly these are not the farmers, the workers, and their families
who have lost their sources of livelihood.
telcos did not want the independent ISPs to provide the Voice over Internet
Protocol (VoIP), claiming that this fell under their jurisdiction. ISPs could
provide this service at a cheaper rate, but this would pull away profits from
the telcos. The situation required a strong and neutral state regulator to
assure upfront competition.
Engagement also seeks the participation of the affected sectors in policy
making. As pointed out in the Benguet vegetable industry, the Philippine
government has created a political environment hostile to civil society
advocating reforms in trade policies that are deemed threatening to the
full realization of its economic orthodoxy. And for the garment industry,
the policy challenge is for civil society to link the issue of the workers with
the bigger rubric of pushing further the democratization process that would
uphold the workers’ rights. Another challenge for these industries is how
to modify state policies that put them at a disadvantage if the government’s
hands are already tied by agreements it has signed.
Moreover, it is also necessary to prioritize the needs of the industries
along with those of the consumers and to determine what would be best
for the public good. Should the country, for example, continue importing
vegetables to satisfy the consumers in exchange for the death of the Benguet
vegetable industry? On the other hand, the hog raisers, despite being a
powerful business lobby group, are prevented from exercising a complete
monopoly because of competition from other powerful players like the
meat processors and the corn and grain feeders. The state’s entry into
agreements for liberalization has also basically tied its hands with regard to
fully supporting the interests of the hog industry.
In all of these, the question is, under what political conditions can
civil society engage the state to address the impact of trade liberalization,
which is a by-product of government’s submission to market forces?
Again, solutions in the form of safety nets for the Benguet vegetable
farmers and garment workers and more participation in decision making
can be dismissed as an issue of governance. But this is not the case with a
philosophy of development that diminishes the role the state can play in
the economy. Furthermore, the diminished role of the state comes at a
208 People, Profit, and Politics
time where there persists a big gap between the rich and the poor. Thus, if
ever stakeholders could participate in decision making, these would be the
well-off, as can be seen in the telecommunications and hog industries.
One witnesses, for example, the state’s inability to regulate the telcos because
it has been captured by the elite.
Mobilizing allies
Equally important in engagement is the identification of key allies in
government institutions. The Benguet vegetable industry, for example,
found a major ally in then-Department of Agriculture (DA) Undersecretary
Ernesto Ordoñez, who endorsed the actions of the vegetable traders,
210 People, Profit, and Politics
of its huge stake in vegetable farming. The farmers’ allies were the Benguet
local government officials who were running during the elections, opening
doors for civil society’s advocacy in the vegetable industry. Moreover, the
farmers also mobilized nonstakeholders by making the issue part of the
larger campaign against agricultural trade liberalization.
As for powerful allies at the level of the local government, this was
found in Benguet local officials such as Fongwan, Kim, Molintas, Sacla,
and Uy. Some alliances were also formed because some of these local officials
were formerly vegetable traders themselves and thus could commiserate
with the plight of the Benguet vegetable industry players. They are referred
to as “institutional activists,” being government officials formerly associated
with civil-society advocacy groups.
The battle among the players in civil society was most evident in
the telecommunications sector: the ISPs versus the telcos that found
support from telephone companies such as Bell Telecoms with regard
to the VoIP. There was also the involvement of big US telephone
companies such as AT&T Corp., which urged the Philippine
government to classify VoIP as a value-added service (VAS), i.e., not
within the control of the telcos, which will ultimately liberalize the
industry. Thus, deregulation of the industry would be good for the
public as it would prevent foreign players to easily capture a portion
of the market. Civil-society groups emerged, like the PISO, which is
the voice of the small ISPs. In March 2005, the National
Telecommunications Commission (NTC) classified VoIP as a VAS, thus
breaking the monopoly of telcos as the sole provider of VoIP services.
Thus, in the battle of these two profit-making enterprises, public good
was served with the triumph of the ISPs.
While liberalization, i.e., deregulation, frees the market for more
players, there is still need for a strong regulatory body that would prevent
a monopoly. While the telcos and consumers checked the government
on the tax on text messaging, the consumers seemed to be powerless
212 People, Profit, and Politics
eighteen labor federations. Thus, the FTA is one network whose concerns
cut across sectors, in this case, the concern of the vegetable and garment
industries vis-à-vis liberalization.
The hog industry could also rely on its strong organizational and
business networks and its prior experience in building cooperatives. This
is seen in its ability to lobby members of the legislative and executive
branches of the government through formal dialogues, letter-writing
campaigns, and attendance in hearings and sectoral consultations as well
as in the use of the media to air their concerns. Its strength has been further
reinforced with the formation of alliances such as the Agricultural Sector
Alliance of the Philippines (ASAP) in 2001, which include feed millers’
and hog raisers’ associations and cooperatives.
The civil-society network in the telecommunications industry involved
mainly the players who had direct stakes in the industry and the consumers
(who did not figure at all in the vegetable industry). The tax issue, specifically
the so-called text tax, brought the players to a confrontation. The
government along with some legislators framed the issue by arguing that
the text tax will raise government revenue that can provide for more social
services. Civil society, which did not agree, framed its argument by saying:
1) there is no need to tax, if the government spent public money correctly;
2) to impose taxes on text messaging is antipeople; and 3) government
should just run after the big tax evaders. Civil society found allies in
legislators, church groups, and overseas Filipino workers (OFWs), among
others. The telcos also supported civil society on the issue, saying that the
cost would merely be passed on to the subscribers. In the end, the president
raised the VAT system on telecom providers from 10 percent to between
12 and 14 percent instead of the franchise tax, which could translate into
higher cost of service. Thus, one had a case of the telcos and civil society
coming together vis-à-vis the government.
Networks and alliances in the telecommunications sector were also
formed because of a common cause. The tax issue, for example, provided
a political opportunity for civil society to continue to rally around concerns
for more affordable and efficient cellular phone service. One of these groups
214 People, Profit, and Politics
reasonable for the civil-society actors to count on the institution for forming
and influencing public opinion. The garment, hog, and telecommunications
industries also used the media to talk about their problems. Thus, the
media’s openness to social movements, although these are often excluded
in the standard operationalization of political opportunity, is in itself an
important component of political opportunity structures, which has both
structural and dynamic elements (Gamson and Mayer 1996). As seen in
the case studies, the content of media coverage may radically influence the
prospects for mobilization of challenging demands and movements, as it
affects public awareness and perceived importance of a particular issue
(McCombs and Shaw 1993). Mass media’s agenda-setting function,
therefore, has progressed from the classical assertion that the news merely
informs the public. The selection of objects for attention and frames for
interpreting these objects shape the manner in which news is construed
(McCombs and Shaw 1993).
forged alliances at the global level, which differentiated it from the Benguet
vegetable industry whose alliances were limited to the local level. This is
because transnational actors could relate to the issue of human rights, which
was raised vis-à-vis the garment workers in the context of globalization.
The loss of livelihood for the vegetable farmers, on the other hand, did not
generate much sympathy from transnational actors. There was also
transnational civil-society support for the garment workers because they
are better organized, unlike the small-vegetable farmers. This enabled the
garment-industry groups to network with overseas organizations, which
allowed them to learn from the campaigns taken by other groups and
eventually apply these at home. These campaigns usually center on the
corporations’ social responsibility, with specific focus on their
responsibilities toward their workers. The Clean Clothes Campaign, for
example, was formed to improve working conditions and empower workers
in the global garment industry. Local chapters of international organizations
were also established in the Philippines. Moreover, because of the
international networking of trade unions in the Philippines, they can report
to multinational companies the violations committed by local contractors.
Civil-society groups are not the only ones making use of such
campaigns. Governments, for example, have also used these to instill social
responsibility among local manufacturers. Agreements forged through the
efforts of international institutions have also been very useful in setting
the directions of the country’s laws with regard to the protection of workers.
For the garment industry, therefore, external political structures were utilized
to protect the workers’ rights rather than stopping the flow of cheaper
garment imports to the country.
As for the telecommunications sector, an external political opportunity
was for them to draw in the OFWs in their campaign to ban the text tax.
The external environment in which the neoliberal ideology dominates as
perpetuated by the international financial institutions, e.g., the World Bank
and the IMF, has brought more positive rather than negative results. This
brings out the fact that neoliberalism discourages too much state
intervention even as it does not dissipate the state power to tax. The
218 People, Profit, and Politics
pointed out that the smuggling and excessive importation of meat would
ultimately lead to the collapse of the local hog industry. No decisive action,
however, was taken by the government despite the fact that the ASAP held
protest actions and declared a meat holiday, among others. They even
demanded the resignation of government officials who they believed were
involved in smuggling, but this was also to no avail.
In the Benguet vegetable industry, the strategy of civil society to focus
on the executive branch rather than the legislature also seems to have been
flawed. For one, executive orders served only as temporary measures with
very short-term impact. The executive can also issue a policy that may
benefit the Benguet vegetable farmers but only to be negated by another
policy. For example, the government is in partnership with the vegetable
industry to stop smuggling but it will not accede to lowering the tariff
rates on imported vegetables. The legislature also has its limitations as an
arena for engagement. These include the very low awareness of policy makers
of international trade; the high rate of absenteeism, which may indicate
lack of interest or little knowledge of the issue; the long-winded process of
legislation; and the parochial disposition of Congress as an institution.
Changes in policy, therefore, are not based on principles but on realpolitik
or quid pro quo. Furthermore, at the end of the day, the executive is tasked
to implement the trade policies mandated by Congress.
In the case of the telecommunications industry, the legislature generally
played a supporting role either to the state (e.g., the NTC) or to the civil-
society players (i.e., the telcos, the ISPs, and the consumers). The telcos
have more resources; they are able to translate these to political influence.
The reality, therefore, is that the state must address the adverse effects of
globalization, despite the fact that neoliberalism calls for the state’s
diminished role.
To reiterate what Mittelman (2002, 10) said, globalization as manifested
by its major conveyors, the intergovernmental organizations (IGOs) like
the WTO, tends to fragment the national political system and leaves winners
and losers. Among the winners, as very well seen in the case studies, are the
executive and the bureaucracy, which conduct negotiations and provide
220 People, Profit, and Politics
Conclusion
These studies have shown globalization’s different effects within and
across domestic industries as well as the multiple strategies of engagement
between civil society and the state. The impact on the stakeholders in the
Benguet vegetable, garment, and hog industries has been negative. The
impact was most severe in the case of the Benguet vegetable industry, which
barely survived despite its pre-trade liberalization monopoly of the industry.
The garment industry, despite being among the top export earners, shows
that globalization in a time of democracy has brought about profit losses
translating into the closure of several factories and the layoff of hundreds
of workers. The expiration of the MFA will only make matters worse.
Globalization has brought in cheaper meat, but this hardly threatens
the hog industry.
Conclusion 223
their engagement of the state at the national level, i.e., engaging the executive
and its bureaucracy, the legislature, and the judiciary. The nature of
engagement is formal and direct, e.g., through committees on tariff
involving NGOs, as well as informal and direct, e.g., lobbying government
officials. Political opportunities are also present for civil society to engage
the state in an informal and indirect manner, e.g., the use of the media as
well as demonstrations.
The state is not monolithic. While industry players may tap key allies
in government, there will always be state functionaries who are insulated
from the pressure to provide for safety nets to industries, as in the case of
the Benguet vegetable and garment industries. The allies may come from
local government officials whose communities are at risk because of
globalization, or allies who are ideologically against globalization killing
off industries, or those who see that supporting the antiglobalization
movement would mean electoral votes. These combinations were, for
example, seen in the Benguet vegetable industry, where “rifts among elites
could provide movements occasions to influence policy making” and “the
presence or absence of influential allies, such as the elite, could also have
direct impact on the movement’s actions.” This is mainly because “elite
allies possess resources and political influence that movements lack and
could serve as indirect channels of access in the system” (Tarrow 1994) as
was seen in the case studies.
The study also reveals that the industries that have more resources,
e.g., the hog and telecommunications industries, are in a better position to
engage the state because of the profits they bring to the economy. This is
where the state has to come in to provide the balance by, for example,
leveling the playing field. One consolation, though, for the marginal players
is that the competition between big industry players who are in conflict
with one another has provided a check and balance as seen in the hog and
telecommunications industries. Ironically, the check and balance does not
come from the state because of its patrimonial character, i.e., dispenser of
patronage politics, which can be attributed to the elite capture of the state.
In all these experiences, one witnesses not the retreat of the state but the
Conclusion 225
Note
1. Trade liberalization in the Philippines is defined as “lowering tariffs and lifting
quantitative restrictions on hundreds of goods (notably, not rice); removing capital
controls to allow capital to flow unimpeded in and out of the country; and
opening previously restricted sectors and industries to foreign ownership”
(Abinales and Amoroso 2005, 245).
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228 People, Profit, and Politics
Bayan Muna, 35, 40, 126, 178, 212 Citizens’ Alliance for Consumer
BayanTel, 165-66, 172, 184 Protection, 199
Bell Telecoms, 211 civil society, 1-3, 9-11, 20-21, 33-34,
Benguet, see agriculture 39-59, 73-74, 82, 91-94, 100,
Benguet Cold Chain Project, 41, 56 103, 105-6, 108, 123, 137-38,
Benguet Farmers’ Federation Inc., 37, 156, 167, 172, 175-76, 186, 198,
45 202, 208, 211, 213, 215-16
Benguet Vegetable Commission, 37 class bias, 203-4
Benguet Vegetable Council, 37, 53 Clean Clothes Campaign, 122, 203,
Benguet Vegetable Distributors’ 217
Cooperative, 36, 42 Clothing and Textile Industry Tripartite
Bilateral Textile Agreement, 117 Council, 135, 141
bonded warehouses, 103 Co, Nemesio, 101-2
Briones, Nicanor, 102 Coalition for Consumer Protection and
Bukluran ng Manggagawang Pilipino- Welfare, 199
ALMAGATE, 125, 131, 134, 212 Cojuangco, Antonio “Tony Boy”, 164
Bulacan, 97, 102, 105, 116 College Editors Guild of the
Bureau of Agricultural Statistics, 76, Philippines, 177
100 Commission on Information and
Bureau of Animal Industry, 98, 100, Communication Technology, 161,
103 170, 175, 188
Bureau of Customs, 27, 42-43, 48, 53, Communist Party of the Philippines,
103, 106, 126, 137, 140, 142, 209 201
Bureau of Labor and Employment Computer Professionals Union, 177,
Statistics, 121 180, 187
Bureau of Plant Industry, 27, 40-42 computerization, 127
Bureau of Telecommunications, 162 Concepcion, Trixie, 177
Concio, Joseph, 181
C confrontation, 186
Cabinet Oversight Committee on Anti- Congress, 28, 31, 38, 41, 48, 53, 102-3,
Smuggling, 43 164, 169, 171, 187, 209, 215, 219
Calimlim, Carlito, 100 Congressional Oversight Committee on
call center industry, 181 Agriculture and Fisheries
Capiz, 105 Modernization, 46
carabeef, 100-103, 105, 221 Connectivity Unlimited Resources Inc.,
Casiño, Teodoro, 178 165
Cavite, 116 Consumer Union of the Philippines,
cellular and mobile telecommunication 199
services, 160, 165, 202 Consumers Federated Groups of the
cellular mobile telephone system Philippines Inc., 199
providers, 164 contractualization, 119-20
Central Luzon, 76 Convention on the Rights of the Child,
Chikka Asia Inc., 170 123
China, 26, 56, 112, 121-22 Convergence Solutions, 182
Cinco, Emil, 176 cooperatives, 38
Index 231
W
“Washington Consensus”, 217
welgang bayan, 124, 214
Wi-Fi/Max, 170, 173, 183
women, 204
World Bank, 2, 7, 29, 33, 116, 200,
217
World Summit on the Information
Society, 175
World Trade Organization, 6-7, 26-29,
31, 33, 43, 46, 84, 87, 95, 112,
About the Authors
Teresa S. E
eresa ncarnacion Tadem is associate professor at the Department of
Encarnacion
Political Science, University of the Philippines Diliman, and director of
the UP Third World Studies Center.
Sharon M. Q
haron uinsaat is university researcher at the UP Third World Studies
Quinsaat
Center.
Joel F
F.. Ariate Jr
Jr.. is university research associate at the UP Third World
Studies Center.