In the Context of the Modern World System

Modernization had such extensive and varied effects on the both world economic markets and its societies. The core section of the paradigm of the modern world system and the division of labor incorporates high standard of technology which results in finished products distributed in both domestic and foreign markets. Due to the nature and how its market operates, most of its workers belong to the formal sector, thus providing an elevated standard of living in contrast to those in the exterior sections – semi peripheral and peripheral segments.

The geographic expansion of the capitalist world economy (particularly industrialized or developed countries) not only altered political systems but also changed the labor conditions wherever it has penetrated. The functioning of the world economy has brought mounting disparities between economies as well as with the abovementioned sections.¹ It has brought distorted growth and development in which social inequalities between the sections of the world economy have increased rather than imparting prosperity for all.

In the Context of Globalization

The new trend called globalization has now replaced the old paradigm of modernizing the world system. Globalization has outlined the economic process which was an outcome from the changes in technology, investment and production and distribution. It is in the framework of globalizing the economies of countries in order to utilize and maximize the resources and economic potential of a specific nation. Foreign investments and its leveraging of resources as well as relocation of its business operations across borders particularly to third world countries has greatly affected the Philippine industrial relations as well as the country’s economic structure.

The new paradigm of the international division of labor states that less developed (or underdeveloped) countries are made to specialize on labor-intensive, low-technology export commodities while those considered to be more developed focuses on capital intensive, high technology products of the multinational companies as well as transnational corporations.² In the Philippines, the most evident effects or trends with reference to globalization both on firm and industry levels are, trends toward labor flexibilization, trends toward the informalization of labor, trend toward an HRD strategy. These in turn have an effect on the workers as well as trade unions at it poses threat on job security which could increase the country’s unemployment and underemployment conditions, restriction on legislation matters, base reduction for union organizing and difficulty in collective bargaining.³ Such effects create greater instability in the Philippine Industrial Relations System as it already is. The outcome illustrates the weakening power and influence of the labor sector which could result in the ineffectiveness of the country to deal with such crisis.

Globalization to a certain extent pushes workers in the formal sector to the other end. The future of unionism cannot be isolated from the future of the workers in general. The determination of that future will be a product of many procedures associated with an integrating world. These include economic restructuring, market-driven policies, technological change, the degree of government intervention in labor markets and industrial relations, flexibility in the way work is organized and growing diversity of work, and the increasing dichotomy in terms of employment and income opportunities between workers from both formal and informal sectors.⁴

Economic growth brought about by globalization is advantageous as it could facilitate in the development of the country. However it should also be taken into account the negative consequences that could be incurred by having such since effects of these could bounce back and have an effect on the state of the country’s economy. It is without a doubt that economic needs of a country could not be disregarded and consequently, compromises are inevitable. It is imperative to emphasize that is not just austerely optimizing the conditions of the market but to reconcile the interest of the workers with the welfare and economic needs of the society as whole.⁵ Trade unions play a major role in the representation and formulation of certain socio-economic policies concerning not only those in the formal labor sector but also for those classified as informal. It must be taken in great consideration in order to adjust suitably to the changing trend in the world economy and landscape in the Philippine Industrial Relations System.

Globalization has taken its socio-economic toll in the exploitation of the labor sector, primarily those located in third world countries such as the Philippines. The old model of the international division of labor has been replaced by a more exploitative paradigm having direct effect on those that belongs in the working class and its trade unions. Addressing the economic needs by adapting to the changing conditions brought about by globalization is essential for the country’s survival. However, interests of workers in the formal labor sector should also be taken into consideration to fully capitalize on the changing trend in the economy.

¹ Wallerstein, I. 1974 The Modern World System: Capitalist Agriculture and the Origins of the European World Economy in the Sixteenth Century, New York: Academic Press
² Ofreneo, R. 2000, WTO and Globalization: Trade Union Issues and Challenges in the Asia Pacific, p.4
³ Ofreneo, R. 2000, WTO and Globalization: Trade Union Issues and Challenges in the Asia Pacific, pp. 11-13
⁴ Bitonio Jr, B. Unions on the Brink: Issues, Challenges and Choices Facing the Labor Movement in the 21st Century

⁵ Weiss, M. Globalization: Challenges and Opportunities for Philippine Industrial Relations in the Next Millennium, J.W. Goethe University, Frankfurt (Germany)

Economic restructuring and policies, even technological change, brought about by trade liberalization and globalization has greatly impinged the current Philippine Industrial Relations Systems. The decline in both numbers and membership of unions in contrast to the mounting presence of cooperatives and its members has brought several implications in the representation of the formal labor sector- creation of national policies concerning the formal workforce and effectiveness of collective bargaining in the country.

The apparent decline in the Philippine labor movement could be attributed to the structural causes as well as institutional barriers which tend to regulate union organizing and expansion.¹ Foreign investments and its leveraging of resources and transfer of operations across borders particularly to third world countries has instigated not only an economic move but also social as well as political. It has affected the existing national set up of industrial relations system of the country which is executed through the reduction of regular workers and increase in contractual or casual employees, and the prevention of unionism.

Cooperatives has somehow benefited from the effects of trade liberalization and globalization. Companies lean towards the acceptance of cooperatives as compared to unions, which can be perceived in the approach used by numerous companies across industries – the “union avoidance approach”. Companies’ either directly undermine union organizing efforts or restructure the company and relocate the unionized business into a non-unionized setting.² Cooperatives are deemed by companies as somehow less problematic and muddled and to a certain extent advantageous as they have become providers of contractual or casual workers for the company they are affiliated or connected to. This has paved the way to the increase in cooperatives over trade unions.

As a major consequence of this growing trend, the underpinning in which the entire industrial relations system is situated has also been compromised – and that is the relationship between the tripartite actors. The core of the Philippine Labor Code which governs the actors is centered within the aspect of regular employment purposely for labor standards and protection.³ The deteriorating number of non-regular employees due to labor flexibility or flexible labor arrangements brought about by globalization implies minimal influence of the labor sector in public policy and governance. Without ample and proper representation from the workers, its influence over national policies and collective bargaining in terms of employment relationship is at stake. The effectiveness of the national industrial relations system, its control over the employers and protection of the workers is inadequate if not desecrated.

If we are to efficiently address issues concerning the labor sector and its impact on the industrial relations system, major actors in the tripartite system should be properly represented. Programs and policies to be developed and implemented in order to achieve a well-balanced and affable industrial relations in the country should be done with proper consultation from the key actors which runs the national tripartite mechanism.

¹ Bitonio Jr, B.E. Unions on the Brink: Issues, Challenges and Choices Facing the Labor Movement in the 21st Century, 128
² Ofreneo, R. Globalization and Unionism: The SMU Challenge, 7
³ Macaraya, B. The Labor Code and the Unprotected Workers, 230

There’s a clear distinction between performing different tasks in order to be familiar with certain functions needed to execute appropriately a particular designation and requiring or dealing with various responsibilities to be able to swathe a nugget of activities essential for the business operation. If we will take the latter as the principle of multi tasking, it is a clear manifestation of employee mismanagement or human capital exploitation.

In third world countries such as the Philippines, the concept of multi tasking is a widely imposed attribute carried out in work places across all industries. Fraudulence in job acquisition has been one of the major sources of grievances and dissatisfaction by majority of workers who were given clear job functions prior to the commencement of the assigned task(s) and then transcended to deviations of the normative occupational description during the course of the worker’s employment in the company.

Multi tasking has been widely exercised and expected to be part of the job. In most cases, companies require the worker to perform several tasks which are oftentimes beyond the scope of the designation given. Even if the title or the role of the employee limits or sets the scope of the functions to a specific area of accountability, it has a propensity of being extended or curled in order to give way to lengthened work assignment.

Companies have a notion that multi tasking is not a bad business concept as it facilitates management of its resources, predominantly for those that do not have sufficient means to acquire or increase the manpower. This cuts or saves operational cost since it necessitates several different tasks to be performed by an individual. However, there is an important factor that has been overlooked which is directly connected to the systems of operations of a business, and that is the capitalization or investment in employee productivity. Productivity is measured or defined by the output generated by the individual in terms of the goods produced or services rendered. In labor terms, it is usually determined or quantified as the output created by the worker in a certain period of time.

Labor productivity is more often than not misrepresented as an exclusive central component of business operations. Employee productivity does not only shape the mechanism of the business but also affects the entire industry. It is not limited to the execution of tasks in the organization. It also concerns the development of the individual in terms of work and contribution in the industry and society. Multi tasking oftentimes hinder both the productivity and the development of the worker as efficiency, delivery and quality are compromised. Consequently, the worker and organization suffer from the cost of employing such aspect.

“If pluralism is a valid view, and respect between systems of values which are not necessarily hostile to each other is possible, then toleration and liberal consequences follow, as they do not either from monism (only one set of values is true, all the others are false) or from relativism (my values are mine, yours are yours, and if we clash, too bad, neither of us can claim to be right).”

– Isaiah Berlin

Pluralism holds the view that diversity amongst individuals and groups is a significant factor that is quite essential and beneficial to society. It is defined in the context of liberal democracies wherein the concentration of power should not be exclusively held by a single or group of elites but should be dispersed among the various ideological and economic pressure groups of the society.¹

The players of pluralism referred to as the pressure or interest groups interact with each other in such a way that they may be able to compromise, compete, have a concession and negotiate with each other. The primary objective is for the group’s principle to develop into the dominant interest and to eventually become the majority. However, given the system in which they operate, pressure groups tend to be controlled and confined within the premise of the system itself.

Pressure or interest groups represent the positions of the bloc or people they belong to. These groups act based on the beliefs and common goals that they share with the rest of the faction. The significance of pressure groups is situated in the ideology and manner of influencing the public or liable parties. They seek to convey their causes, advocacies and programs by influencing people or society in general. These groups are entirely different from political parties – Political parties seek to convey their concerns by being elected in public office whereas pressure groups put across their concerns by influencing the public or the different sectors of society through awareness and persuasion.

Antagonism towards other pressure groups could generate instability and disorder within the system. It could be extremely despotic, which could present threat to the current libertarian state of the society or nation. In order to re-establish pluralism, the dominant group should be removed from the system or be replaced by a less domineering group having the same ideology.

¹ Pluralism, http://concise.britannica.com/ebc/article-9060460/pluralism

John Dunlop’s analysis and study in the concepts, structure, function, practices, outcome and the institution that are constitutive of the employment relationship have paved the way in the establishment of a main framework of an industrial relations system.

According to Dunlop, the system is composed of three main actors and their organizations, the context or setting in which they interact, the common ideology held by the actors and the body of rules that govern the system. These are the fundamental components that shape or outline the industrial relations system in which they belong to.

The actors – hierarchy of managers, the hierarchy of workers and the specialized government agencies are the central personas in an industrial system. The interaction and relationship within the three creates the set of rules of the workplace or the principles of the system. Establishment (and development) of the set of rules is the focus of an industrial relations system. The body of rules in the system administers the actors in the place of work. The function of experts and professionals are very crucial in order to establish and govern the body of rules in the system. This are organized and consists of (a) procedure and authority for making rules (b) substantive rules – related to market or budgetary constraints and related to distribution of power in larger society such as compensation, duties and discipline as well as the rules of discipline and (c) administration of rules governing work place and the work community which involves policies of management hierarchy, laws of worker hierarchy, regulations / decisions/ orders by government agencies, collective bargaining agreements and the customs and traditions of work place and work community.

The entire industrial relations system becomes (or mandated to be) stable because of the common ideology or beliefs shared by the three actors of the industrial relations system. It should be fitting and consistent to allow a mutual set of ideas that identifies an acceptable role for each actor. This also characterizes and delineates both the position and function of each in the entire system or their relationship with the rest of the actors. These set of ideas or beliefs are the factors that integrate the system as a unit. Displacement of the existing ideological equilibrium takes place when a belief has a significant modification. Accordingly, this will create a new position or set of rules within the entire system.

The system operates within or prescribed by technology, product markets as well as the locus and distribution or power in society. These are the contexts or environments in which the main actors interact. The technological characteristics of the place of work may influence the type of management of a particular work community as well as the organization of its workers. Moreover, this may also dictate the required labor force of the organization, the requirement for supervision and possible regulation of the government or government agencies. Product markets for the most part affect management group, however, this is dependent on the type of system in which it operates. The distribution of power is not within the confine of the industrial relations system. This operates outside of the system yet influences the key actors of the system itself. These are types of power orientation or authority that has direct influence over the key actors.

The industrial relations system necessitates unison, interdependency and equilibrium of the components. Even if the balance in the system is displaced, it would be re-established on condition that no major alteration would occur in the actors, contexts and shared ideology.

Several theories and models on wages have been developed in order to address the dilemma in the structure of labor costing. Fixing wages covers a wide range of factors affecting both the supply and demand of the labor market as well as economic and political conditions and policies of a country.

One of the components that need to be attended to is the principle of minimum wage fixing. Minimum wage is a good and reliable reference of the standard of living of the workers particularly in developing or third world countries such as the Philippines. In this particular case, the dependent variable which is the minimum wage determines the outcome or output of the independent variable which is the living standards of the workers. This could assist in the initial approach on how to properly put forward an efficient labor costing policy and structure across economic sectors and industries.

According to the Labor Code of the Philippines, the determinant of the minimum wage in the country constitutes a near satisfactory level that could sustain the living conditions in terms of the basic necessities of the worker. “The regional minimum wages … shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program.”¹

As avowed in the labor code, the minimum cost of labor ensures sufficient remuneration for the worker in order to suffice the cost of living or the standard living necessities of the individual (and their families). However, in this regard, the minimum wage does not entail improvement in the economic situation of the individual. This is just a mere “pay the rent” principle whereby an individual works in order to live by the day.

Minimum labor costing should intend to address poverty and guarantee the sustainability of the necessities of the workers and their families. A study conducted by Catherine Saget of the International Labour Organization (ILO) with reference to the minimum wage and its impact on the nation’s poverty suggests there is evidence to support that minimum labor costing can take an essential part in the reduction of poverty of a country.² In relation to the evidence, at least three premises should be sufficed – (1) most workers should be entitled to get at the least the minimum wage, (2) compliance of employers with the minimum wage regulation and there should be (3) no price increase in commodities following the augmentation in minimum wage. Accordingly, if the three conditions were met, the principle of minimum wage to surmount poverty and meet the requirements of satisfying the necessities of the workers and their families is feasible.

One of the major hindrances aside from the economic condition affecting the country and its labor market is the revenue acquisition of the employers. Employers are quite concerned in the maximization of their profits. Most if not all adheres to the principle of sticky wages. By not promptly responding to the changes in wage levels in the labor market, revenue exceeds the cost of hiring the worker. This is also applicable in hiring additional workforce in their business.

The principle in mimum wage fixing will remain abstract if it would not be applied and stringently implemented. The most viable way of addressing both social and economic issues and eventually arriving to a resolution is through social dialogue in different forms and levels between the tripartite partners.³

In the paper published by the ILO authored by Tayo Fashoyin, discourse and consultation between the workers (with their organizations or trade unions), employers and the government as well as other relevant stakeholders is a useful measure of developing agreements on policy issues.

Coming to agreements and formulating policies based on the consensus of concerned parties plays a fundamental function in shaping the labor market and relevant institutions as well as the economy of the country. An efficient minimum wage fixing could pave the way not only to an efficient structuring of labor costing but also to the development of the country and its economy.

¹ Article 124 of the Philippine Labor Code, www.dole.gov.ph/laborcode/
² Catherine Saget, Minimum Wage – Does it Cut Poverty?, http://www.ilo.org
³ Tayo Fashoyin, Social Dialogue and Labour Market Performance in the Philippines, http://www.ilo.org/public/

In the early 1980s, the economic condition of the country started to experience a stumbling block that has greatly affected the major sources of the nation’s revenue. This period marked the major decline in Philippine exports in the global market and has also affected the credit rating and borrowing of the country in international financial institutions. The fell of the industrial sector (as well as the agricultural sector) in the country could be attributed to the economic crises that the country has experienced. But was it mainly on these crises that the industrial sector had befallen to its current state? How could we revive an industry that has been in its lowest depth (as far as the country’s condition is concerned) for decades?

Before the 1970s, the country has been exporting primarily raw or semi processed goods such as mineral products. Years after, the country has been exporting manufactured commodities chiefly electronic components and garments.¹ This has boosted the Philippine economy which made the country more affluent compared to the neighboring countries in the region. However, the growth in Philippine industries stagnated – there were no increase in both production and employment. The manufacturing output of the county was cut down because of both political and economic crises in 1983.² By the middle of the period, the current administration then developed economic restructuring programs in order to propel the wobbly industry. The economic plan was then effective which made the industry working at full capacity again. However, the programs implemented not were not sustained or fell short of efficacy on a long term period.

The fall of the industry has evidently affected the labor sector. This increased drastically the rate of unemployment which led to the brutal fact of people going abroad to earn sufficient money for their families. The per capita income of the country was intolerable (actually until now). The 1993 GNP of the country was estimated at $830 having an annual GDP per capita growth of .065% between 1986 and 1993.³ This has increased the percentage of the country’s population below the poverty line.

After a decade, the impact of globalization has significantly aggravated the current condition of the industrial sector in the country. The move towards globalization is not a dreadful economic step. However, the number and share of foreign equities in the business sector compared to local is increasing, thus affecting the domestic businesses in general. Currently, the largest sector in terms of the country’s economic revenue generating component is the services sector. Business Process Outsourcing (BPO) companies constitute the largest part of the services market. Ample number of the labor force in the Philippines is employed in these businesses, majority of which are operated by foreign entities.

There are still industrial businesses that are operating in the country. Although for the most part, these are oligopolistic businesses which are run by a handful of family business tycoons way back the start of industrialization in the country. They have survived by cutting down the cost of their operations – downsizing their manpower and usage of available technology for their businesses.

The attitude and practice of domestic entrepreneurship as well as investing in industrial businesses has been considerably decreasing if not nominal due to the economic impediments and lack of efficient programs, support and policies governing the domestic market. If we were to trace the setback, it started from the crises that the country have faced and has been intensified due to short lived and unsupported domestic economic strategies. If we were to revive the industrial sector, the government should pay much attention to the domestic market concerns. The government should invest more on reviving local industries such as setting limit if not a decrease in the entry of imports and expand the domestic industrial market output and exports. This should be backed up by both fiscal and monetary policies in order to protect and gain confidence that the industrial businesses could still be profitable.

¹ Economy of the Philippines, http://countrystudies.us/philippines/
² The Industry, http://countrystudies.us/philippines/
³ Philippines, http://www.unsystem.org/SCN/archives/rwns94update

The Philippines’ economy over the last 10 years could be referred to as a cyclical unsustainable nation. To be more precise, the economic crises that the country has experienced have ranged for more than a decade, but the last 10 years could be considered as a milestone in the country’s devastating condition.

What are the goods and bads of an economy? In Bertell Ollman’s article – Market Economy: Advantages and Disadvantages¹ he discussed the seven main characteristics of a market economy in which both benefits and costs go together. The first characteristic is that people could buy the goods and services they want (or need) only if they have the money to buy for such. Second, Money is a necessity of life – actually this is a fact that no one could contest. Third, In order to acquire money (to suffice the first characteristic) people are forced to do and sell anything. Fourth, the objective of production and investment is to maximize its profit and not to satisfy the social needs. Fifth, the control over those who produce the wealth of the society is no longer carried out but through money and the conditions of a certain task that an individual accepts in order to earn. Sixth, allocation of limited goods is based on money and not through coupons or the basis of who worked harder and longer as well as who needs more than the other. Lastly, In view of the fact that no individual is held back in doing or trying to become wealthy (except illegal means I guess), people gets the notion that each individual gets what they economically deserve.

Economy or the growth in the economy should lead its people to an elevated or at the least a decent living. Growth is already positive in theory or by definition and ideally it should be, but there are several implications when growth is combined with something that concerns the welfare of people and various institutions, such as a country’s economy.

When we say there’s growth in the economy what are the benefits that the people or the country gets? The primary advantage of the growth in economy in terms of the real GDP Per Capita is that the living standards of people improve. In the aspect of labor and employment, this only means that there’s an increase in the employment or reduction in unemployment. In an ideal economy, labor should be at full employment. According to Milton Friedman,² full employment means the lowest level of unemployment that can be sustained given the structure of the economy.

On the business side, it provides a higher business confidence which gives a positive effect on both local and global stock markets as well as to small and medium enterprises. And as for the government, this only means one thing (or maybe the other which is quite rampant in the country) – greater fiscal dividend. Since economic growth boosts revenue coming from taxes, the government could spend more money to finance (more) projects.

Growth in the economy however, does have several negative impacts or inevitable consequences particularly for third world countries having a market economy such as ours. One of the disadvantages as an economy grows is the risk of inflation. If the demand for the goods and services increase rapidly (thus affecting the cost to go down rapidly as well) in contrast to the long run productive potential, this could put pressure on the interest rates to rise which in results to the loss in the competitiveness of domestic businesses in international markets.

Another, which is directly related and is much applicable in the country’s condition, is that as the economy grows, growth in social-economic inequalities also increases. Unequal distribution of the benefits from the economic growth in terms of profit allocation widens the gap between the people who has the more purchasing power to acquire goods and services as compared to those who have less. The tendency of rich people to become wealthier and the poor increasingly befalls to intolerable poverty. This could also mean increase in gaps between regions in the country which are unreached (or left) by economic reforms and projects as compared to those that are.

At the labor sector end – the risk or increase in workers exploitation. The most feasible movement of businesses to increase its profit is to increase its production and decrease its work force. This could be done either by labor downscale or cut back in employee benefits. Wealth accumulation is a prevalent behavior among the elite (primarily business owners) in order to maintain their stature. Wealth accumulation is a negative behavior and one of its manifestations is the unwillingness to allocate profit to capital. There are several ways to allocate or convert profit into capital. One is to improve the means of production by increasing technology, resources, and manpower. Another is to increase the labor wages to improve employee morale and therefore an increase in production.

The attributes outlined above suggest that in a market economy such as ours, the society’s or the economy’s survival is based on how we could maximize the capacity and resources to generate the means to suffice the necessities (at the least) of individuals (or the nation) and minimize the effects that go along with those.

¹ Bertell Ollman, Market Economy: Advantages and Disadvantages, Oct 1999, http://www.nyu.edu/projects/ollman
² Milton Friedman, Natural Rate of Unemployment, http://www.huppi.com

Based on the figures released by the National Statistical Coordination Board (NSCB), from the year 2005 to 2006 the country’s GDP Per Capita has increased from 14,186 to 14,653 (in constant 1985 prices),¹ having a growth rate of 5.4% for the fiscal year 2006.² Early this year (2007) the incumbent Philippine President, Gloria Macapagal-Arroyo in her public statement announced that the first quarter of the current fiscal year (2007) had a 6.9% growth rate which outstripped last year’s performance. Moreover, Q1 of 2007 had the highest growth rate experienced over the past ten years. Does this entail that the Philippine economy is growing?

In any country or economic society, increase in the growth of the economy could be deemed as something positive. However, we have to carefully examine the country’s sources of economic growth and to which degree it affects the country’s economy in general in order to classify if indeed a certain country’s economy is growing.

How can we say that a certain economy is growing? According to the general definition of economic growth – “it is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economic, “economic growth” or “economic growth theory” typically refers to growth of potential output, i.e., production at “full employment,” which is caused by growth in aggregate demand or observed output.”³

If we look closely at the essentials that directly influence the growth of the Philippine economy we would see that there’s a disparity between the figures and the real situation of the country. Let’s focus on the labor sector of the country. According to the survey conducted by the Labor Force Survey (LFS), as of October 2006 the rate of Labor Force Participation is 64.0%, this figure is lower than 2005 which was 64.8%. However, the Employment rate has increased from 92.6% (As of Oct 2005) – 92.7% (As of Oct 2006).⁴ What does this imply? In an article written by Dave Llorito, a noted journalist and researcher focusing on globalization, international trade, business, politics, and public policy affecting urban life, environment, and agriculture stressed that the drop in Labor Force Participation rate from 2005 was an indication that a considerable number of Filipinos opted not to be part of the labor force either because they don’t expect to find a job or they are under (or over) qualified for a specific work. He also stated that the decrease in the underemployment rate was the result of people who got better jobs for the year 2006 were the people who are already part of the labor force.⁵

The growth of the labor and employment sector is a good indicator of the current economic condition a country. The current state of the Philippines reveals that there are a lot of local companies – particularly small and medium industries closing down, downsizing or being bought out by either a larger company or a foreign entity. Increase in foreign investments specifically business process outsourcing (BPO) in the country only suffices the short term and micro level provision of the country’s economic stability. This may appear beneficial in the country’s economy. However, we have to understand the scheme behind outsourcing. The prime mechanism behind every outsourced company is cheap labor. Outsourcing companies do place a high priority in the cost of operations of its business. In order to stay in the industry they must be at the forefront of the movement in the global sourcing market. The current outsourcing industry trend does not promise any stability for the Philippine market since there are a lot of Asian countries particularly China (which opened its door recently to the global market) that is more competitive in terms of labor cost effectiveness.

There are a lot aspects or factors that need to be taken into account in order to adequately say that a certain economy of a country is growing. If I were to base the real GDP Per Capita as the main indicator of the average standard of living of Filipinos as a result of the country’s economic condition, it would be far fetch to assert that the country’s economy is growing even if we base it on the premise that over a decade, the current fiscal year’s growth has been the highest. I guess it would be safe to assume that the country’s economic growth is far beyond mounting.

¹ National Statistical Coordination Board (NSCB), GDP Figures – National Accounts of the Philippines, 1996-2006, http://www.nscb.gov.ph
² National Economic Development Authority, Growth Rate Figure – Gross National Product at Constant 1985 Prices (annual Percent Change), 2006, http://www.neda.gov.ph
³ Definition of Economic Growth, Wikipedia the Free Encyclopedia, http://www.wikipedia.com
⁴ National Statistical Coordination Board (NSCB), Statistics – Labor and Employment, Oct 2005 – Oct 2006, http://www.nscb.gov.ph
⁵ Dave Llorito, Philippines Without Borders – Alternative views on the Philippine economy, politics, Governance, culture, media, and globalization, Is the Philippine economy hallowing out?, Dec 24, 2006, www.davellorito.blogspot.com