DOLE eyes welfare benefits for jobless Pinoys

By Samuel P. Medenilla, Businessmirror, Apr 26, 2018

LOOKING for a job in the country is usually a monthlong gamble.

This was revealed by the Philippine Statistics Authority (PSA) in the agency’s data from 2010 to 2015, which showed job seekers would usually spend from a month (4.6 weeks) or more (5.3 weeks) to find a job. After that, applicants would either have gotten hired or would have already given up.

Fresh graduates are expected to continue relying on their parents and guardians during this period.

Family breadwinners are not so lucky: they would have to dip their hands in their savings or, worse, take on debt to spend for daily needs until they land a job. This becomes an ordeal if the sole source of the family’s income becomes a victim of man-made crises and natural calamities.

In 2013, to note, Supertyphoon Yolanda (international code name Haiyan) became one of the deadliest natural disasters to hit the country.

The storm devastated many parts of the Visayas and initially affected over 25,000 workers. The closure of Boracay Island from visitors yesterday (April 26) is also expected to affect over 36,000 employees.

Some of these displacements are temporary. In the case of Boracay Island, that means only six months, which is the prescribed period of closure for the island resort’s environmental rehabilitation is completed. For others, however, the closure means their joblessness is permanent.

Both incidents and other similar cases have left the local government, Department of Labor and Employment (DOLE) and other government agencies scrambling for the best way to provide alternative jobs and livelihood to displaced workers.

Based on its standard operating procedures, the government is required to provide emergency employment, livelihood programs and skills training to workers in disaster-stricken areas until things return to normal.

However, due to limited funding, only a few selected displaced workers are usually accommodated in each program.

Addressing the gap

EVEN with government intervention to provide employment facilitation services to displaced workers, it would still usually take some time before they could be hired again. This need has prompted the DOLE to revive a proposal to provide welfare benefits to displaced workers in the private sector, particularly a nationwide unemployment insurance (UI).

The DOLE’s Dominique R. Tutay explained a UI is basically financial aid given to employees who were “involuntarily displaced” to help them find new job opportunities.

“This will help them pay for their daily needs until they could get a new job,” Tutay told the BusinessMirror in an interview.

The DOLE Bureau of Local Employment (BLE) Director explained that a UI is different from separation pay. According to her, those who would avail themselves of UI would be required to regularly show proof of their efforts that they are actively searching for a new job.

As early as 2009, the DOLE’s Institute of Labor Studies (ILS), with the assistance of the International Labor Organization, has already started considering using UI to minimize the risk of unemployed workers from dropping out of the labor market.

In his 18-page report, entitled “Exploring the Possibilities of a Philippine Unemployment Insurance Scheme,” Benjamin M. Dalumpines, ILS research associate, surveyed the unemployment insurance models used by China, Korea, Taiwan, Thailand and Vietnam to develop a possible Philippine version of the program.

He proposed a model, wherein employers, employees and the government will provide funds for the UI with universal coverage to be handled by the Social Security System (SSS).

Dalumpines said the UI will need to go through legislation and actuarial valuation to ensure the program’s sustainability.

Setting conditions

DURING the previous administration, the DOLE started holding consultations for the proposed UI.

In a policy brief in 2011, the Employers Confederation of the Philippines said it is amendable in contributing for the UI but only on two conditions. The ILS quoted the Ecop as citing that the conditions involve using the UI to replace their obligation to pay severance pay and only if the government will relax strict labor law to make it more “flexible” for them to dismiss employees.

Labor groups opposed the Ecop proposal of using the UI a substitute for severance pay.

The groups also said acquiescence to the DOLE proposal requires meeting certain conditions, including allowing them to participate in managing the UI funds. Likewise, the labor groups said they would agree to having a UI only if it will contain a provision on training, it is wage-related and duration will be “adequate,” age and physical condition may also determine level and duration of benefits, incentives will be given to those who will not be able to exhaust the duration of the benefits and the benefit will be granted to workers regardless of the reason for their dismissal.

Pros, cons

FEDERATION of Free Workers (FFW) Vice President Julius Cainglet described the UI as the “missing pillar” in the social-protection framework of the Philippines.

“FFW has long been advocating for unemployment insurance…. [UI] can indeed help workers transition from an old job to a new job,” Cainglet said. “It would have helped workers in Boracay or those in the mining industry when mining permits were revoked.”

However, while the DOLE supported the UI, its attached agencies—the Philippine Overseas Employment Administration and the Overseas Workers Welfare Administration—expressed reservations on the program’s feasibility.

The National Economic and Development Authority and the Government Insurance Service System said the program may no longer be necessary.

And when the DOLE circulated its proposal, it drew opposition to the agency the labor department is eyeing as the fund’s administrator: the SSS.

Many government agencies are hesitant in throwing their support for the universal UI due to its inherent problems, most prominent of which is the astounding amount of funding that will be needed for its implementation.

Funding challenge

BASED on DOLE’s unofficial estimates on the possible displacements from recent issues, the implementation of a UI would require between P3.1 billion to P10.3 billion for 2.4 million workers.

The issues used in the estimates include the number of workers to be affected by the fallout from the General System of Preference of the Philippines abroad, the total pyrotechnics ban, a crackdown on immigrants in the US and the Public Utility Vehicle modernization program. Other issues used in the estimates are the number of workers affected with the mining closure, the Saudinization program in the Kingdom of Saudi Arabia and the government’s campaign against contractualization.

The amount could either be shelled out solely by the government or through contributions by employers and employees.

During its consultations with DOLE in 2011, the SSS raised concern over the possibility of including the UI to its services. That time, the SSS said doing so would further shorten the life of its funds if it is implemented without preconditions.

To make the UI feasible, the SSS suggested raising the contribution rates of its members and putting up a separate fund for the program from its current social-security fund used for its existing services.

Also, the SSS noted the government should be ready to augment the UI fund in case it will register any deficit so it could remain sustainable.

Former DOLE Undersecretary Rene E. Ofreneo also made a similar conclusion on the proposed UI. Ofreneo, University of the Philippines labor expert, said it might be too exorbitant of a program to help reduce the country’s unemployment in some sector. He said the program would not cover new entrants in the labor force or those in the informal sector.

“I am not against unemployment insurance,” Ofreneo said. “In fact, I think that is a good a program, but the government should prioritize a more holistic approach in addressing the country’s unemployment by first focusing on job generation.”

Test phase

AT the moment, only workers in the public sector enjoy unemployment insurance through the GSIS. However, this only applies for those who were involuntarily displaced as a result of the abolition or reorganization of their office.

They will be entitled to monthly cash payments equivalent to 50 percent of their average monthly compensation from two to six months depending on their length of their service.

In 2016 the DOLE decided to apply the concept of UI to the private sector through its DOLE Adjustment Measure Program (AMP) for higher-education institution (HEI) workers, who were retrenched because of the implementation of the Department of Education’s K to 12 program.

Under the AMP, the DOLE provided not only provided employment facilitation and livelihood opportunities, but also a monthly financial support to the displaced HEI personnel.

In its AMP web site, BLE said the given amount is “equivalent to P10,000, 75 percent of their last monthly salary, or the prevailing salary of HEI personnel, whichever is the highest.” Its duration would range from three months to six months.

The Dole said, since its launch, the AMP has benefited around 700 people—about half of the 1,489 displaced HEI personnel registered by BLE.

Initial success

CITING their initial observations for the AMP, Tutay noted the program was a success in bringing back the displaced workers back to the labor market.

“As you can observe, there are no complaints coming from the workers who were displaced because most of them are still able to pay for theri daily needs,” Tutay said.

As of December last year, 159 AMP beneficiaries have already graduated from the program and are now employed, have part-time work or are self-employed.

The AMP is set to undergo evaluation this year to measure its effectiveness for its two-year implementation.

Tutay said the outcome of the assessment will be used toward crafting a nationwide UI.

“Everything is now in place. We now have a system for monitoring job displacement and for keeping the profile and stipend for our beneficiaries,” Tutay said.

Top agenda

UNIVERSAL insurance is one of the priority labor-related legislative agenda under the Philippine Development Plan of 2017 to 2022 to enhance the country’s human capital by reducing their economic risks.

Senator Richard J. Gordon has already filed bill seeking to amend the Social Security Act of 1997 to include provisions on unemployment benefits. If passed into law, the bill, which remains pending at the Upper House, is also expected to raise the funds of SSS by increasing the monthly contribution cap of its members from P16,000 to P30,000 in exchange for more benefits.

The incumbent executives of SSS have endorsed the bill last year despite its provisions for a UI amid SSS’s dwindling funds caused by its latest pension hike.

In support for the said legislation, the ILS is now conducting multiple ongoing initiatives on UI.

Patrick P. Patriwirawan Jr. of the ILS said among their target goals this year is the creation of a technical working group on job displacement/UI, the conduct of a national/regional dialogue on the launch and implementation of a UI and the completion of a report on the launch and implementation of a UI in the Philippines by December.

Patriwirawan said his new report, “In-troducing a DOLE Integrated Unemployment Benefit Program,” is also part of the initiative to include UI in DOLE’s existing programs for the unemployed.

“The policy change being introduced will cater to a wider pool of beneficiaries, which will include the new entrants, the long-term unemployed, the voluntary unemployed, the involuntary unemployed, such as the case of end-of-contract workers and the displaced workers, including unemployed OFWs [overseas Filipino workers],” Patriwirawan, officer in charge of the ILS Labor and Social Relations Research Division, said in his report.