The Philippine Statistics Authority (PSA) on Wednesday said the unorganized or informal sector accounted for more than a third of the country’s total GDP of P14.48 trillion last year.
Using current prices, PSA Assistant National Statistician Vivian Illarina pegged the contribution of the informal sector to the country’s economy in 2016 at P5.013 trillion.
“The informal sectors in agriculture, hunting, fishery and forestry contributed P1.35 trillion of GDP in 2016; industry, P1.4 trillion; and services, P2.28 trillion,” Illarina said in a presentation during the 55th Annual Meeting and Conference of the Philippine Economic Society (PES).
The PSA said it considered informal activities as those that are part of the underground production, unobserved activities, illegal production and unrecorded production. The information was obtained from the Labor Force Survey; Census of Philippine Business and Industry; Annual Survey of Philippine Business and Industries; and Family Income and Expenditure Survey.
Other data sources included the Census of Agriculture and Fisheries; other surveys, livestock and poultry survey, survey of municipal fishing, and survey of jeepney operators; and administrative-based data.
In a presentation during the PES Conference, Ma. Katrina Perida-Trayvilla of the Department of Labor and Employment’s Bureau of Workers with Special Concerns said around 35.1 percent of the total 40.83 million labor force were “own account workers,” or self-employed.
At the sidelines of the conference, National Economic and Development Authority (Neda) Undersecretary Rosemarie G. Edillon said the “informal or unorganized sector” does not only include ambulant vendors but also professionals, such as doctors.
Edillon said self-employed Filipinos have control over their own schedules. If they have high incomes, this enables them to be more resilient in the face of economic shocks.
“[Having an] unorganized sector is really not necessarily bad. For instance, practicing physicians, they’re also part of the organized sector. So you have really a range. I think what is sorely missing in the unorganized sector is the level of protection of workers,” Edillon said.
The Neda official said one of the ways the government is addressing this gap is through the efforts of the Social Security System (SSS), which allows self-employed workers to individually pay for their benefits.
Under the rules of the SSS, self-employed workers can become members of the SSS and contribute on a monthly or quarterly basis.
However, self-employed workers who are more at risk of economic shocks are those who have low incomes. Edillon said the problem with this is that the country’s data is not disaggregated enough to be able to determine the needs or interventions to help specific informal-sector groups.