Informal workers: A path to inclusive growth and prosperity

The informal economy in the Philippines is a vibrant and industrious community, forming a crucial but often overlooked cornerstone of the national economy. This sector, bustling with street vendors, jeepney drivers, and agricultural workers, is a testament to hard work and resilience. Their potential to substantially boost productivity and economic growth is enormous, but it remains underutilized due to a lack of formal recognition and support from the government.

Operating outside the formal employment framework, the informal sector is a significant contributor to the national revenue system, primarily through indirect taxes such as the Value-Added Tax (VAT) on goods and services. This contribution underscores their role as a critical economic force. If adequately nurtured and formally recognized, these workers have the capacity to thrive, enhancing their success and boosting their contributions to national development.

Angkas, a pioneering ride-hailing service in the Philippines, exemplifies the latent potential within the informal sector. Our experience has shown that with the right blend of technology, supportive policy, and political will, informal workers can successfully integrate into the formal economy. This integration not only enhances their economic stability and prosperity but also showcases their capacity to become a substantial part of the nation’s economic framework.

A pivotal moment in this journey was the recognition of Angkas bikers by PAG-IBIG, a government agency responsible for housing loans. This landmark recognition marks the transition of these workers from the economic periphery to becoming active contributors and beneficiaries of government programs. For many in the informal sector, the dream of homeownership was unattainable until this point. This achievement, without additional government expenditure, demonstrates how strategic policy and recognition can foster thriving industries.

Our initiatives at Angkas have promoted entrepreneurship, increased earnings, and created stable incomes for our bikers. We have effectively bridged them to the formal financial sector, enabling access to essential benefits such as housing loans from PAG-IBIG. Additionally, Angkas bikers now benefit from comprehensive insurance schemes, from accident to health coverage. This progression signifies a transformative social change, marking a shift in the perception and treatment of the informal sector.

The Angkas story underscores that with a well-devised strategy, informal workers can become an integral and flourishing part of the formal economy. Achieving this requires collaborative efforts from both the government and private sector to recognize, support, and integrate these workers into formal systems. Extending formal benefits and protections to the informal sector can unlock their full potential, leading to heightened productivity, economic growth, and a more inclusive economy.

The success of informal workers in transitioning into the formal economy offers a beacon of hope. It demonstrates that when given the right opportunities and support, these hardworking individuals can achieve greater success and make even more significant contributions to the national economy. The government’s role in facilitating this transition is crucial. By recognizing the contributions of the informal sector and providing them with necessary support and benefits, we can build a more equitable and prosperous society.

Amid the global upheaval caused by the COVID-19 pandemic, the precarious position of the informal economy was highlighted. The implementation of safety measures revealed that workers lacking access to social protection, predominantly informal workers, bore the brunt of the health and economic crisis. This period underscored the “invisible” nature of the informal sector, often excluded from relief efforts due to a lack of data and formal recognition.

The Department of Labor and Employment notes that a substantial 36.2 percent of the employed Filipinos (17 million) belong to the informal sector, underscoring their significance in our daily lives. Yet, their absence from formal sector employment leaves them unprotected and excluded from typical safety nets during crises.

In response, the Philippine legislature is championing the Magna Carta of Workers in the Informal Economy (MACWIE). This proposed legislative measure aims to address the multifaceted concerns of informal economy workers, spanning issues like labor rights, working conditions, and equitable wages. It includes provisions for emergency employment aid and support for small online enterprises, among other initiatives.

MACWIE endeavors to legally entrench the rights, protection, and security of workers in the informal sector, aligning with constitutional and labor law standards. It advocates for the right of these workers to organize, and directs government agencies to institutionalize social security measures. This legislation also promotes safety nets such as conditional cash transfers and emergency employment schemes.

Angkas values the importance of the Magna Carta for informal workers. Our efforts have led to our bikers’ official recognition and empowering them to contribute to social insurance and embark on the journey of homeownership.

It is imperative to sustain collaborative efforts with stakeholders and partners in championing the cause of the Magna Carta of Workers in the Informal Economy. This proactive and inclusive legislation recognizes the fundamental right to pursue a dignified livelihood and encourages the formalization of informal activities.

In conclusion, the informal sector, far from being marginal, is a vital component of the economy with immense potential. The experience of Angkas bikers illustrates what can be achieved through effective integration into the formal economy. Through recognition, support, and integration, the Philippines can unlock a new era of growth and prosperity, driven by the hard work and entrepreneurial spirit of our informal workforce.

The implementation of the Magna Carta of Workers in the Informal Economy is a pivotal step towards translating acknowledgment into actual protection and prosperity, securing their employment rights, access to healthcare, and envisioning a promising future through dedicated social and economic programs.