DOLE 2012 Progress

With reference to the Arangkada 2nd Assessment Report Of the Joint Foreign Chambers of the Philippines

Department of Labor and Employment 2013

Contents

Abbreviations Background

Part 1: On the area of “growing too slow” Part 2: On “becoming more competitive” Part 3: Big Winner Sectors Part 4: General Business Environment

5 8 11 27

Acknowledgement

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Abbreviations
ADB - Asian Development Bank ASEAN MRA – Association of South East Asian Nations Mutual Recognition Arrangement BOI – Board of Inquiry BPAP – Business Processing Association of the Philippines BPO – Business Process Outsourcing CCAP – Contact Center Association of the Philippines CCS – Contact Center Services DILG – Department of Interior and Local Government DO – Department Order DOLE – Department of Labor and Employment DOT-TIBFI – Department of Tourism-Tourism Industry Board Foundation, Inc. EIB – Efficiency & Integrity Board FCCCA – Finishing Course for Call Center Agents FGD – focus group discussion FINL – Foreign Investment Negative List GCAT – Global Competitiveness Assessment Tool GLS – General Labor Standards GPH – Government of the Philippines HRD – Human Resource Development ICT – Information and Communication Technology IEC – Information, Education and Communication ITWSP – Industry Training for Work Scholarship Program KEG – Key Employment Generator LMI – Labor Market Information LGU – Local Government Unit NGC – Networks of Guidance Counselors OFW – Overseas Filipino Workers OSH – Occupational Safety and Health PDP – Philippine Development Plan PESO – Public Employment Services Office PLLO – Presidential Legislative Liaison Office PJF – Project JobsFit PJN – Phil JobNet PQF – Philippine Qualifications Framework RFA – Request for Assistance RIA – Regulatory Impact Assessment RTD – round table discussions RTIPC – Regional Tripartite Industry Peace Council RTWPB – Regional Tripartite Wage and Productivity Boards SEnA – Single Entry Approach Program SOSL – Skilled Occupation Shortage List SpeED – Speedy and Efficient Delivery of Labor Justice TIPC – Tripartite Industry Peace Council TLE – Technology and Livelihood Education TR – Training Regulations TVET – Technical Vocational Education and Training TWSP –Training for Work Scholarship Program VCGP – Voluntary Codes of Good Practices

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Background
The DOLE’s Response is a consolidated input of progress reports and updates from among the DOLE bureaus, attached agencies, and services on the status of the recommendations pronounced in the Arangkada 2nd Assessment Report, which particularly address labor and employment concerns. This response follows the organization of the Arangkada 2nd Assessment Report focusing on recommendations that cover issues within the mandate of the Department of Labor and Employment and its attached agencies. The responses are categorized according to the domains identified in the Arangkada 2nd Assessment Report. These domains include: (1) Growing Too Slow; (2) Becoming More Competitive; (3) Big Winner Sectors; and (4) General Business Environment. The framework of responses is anchored within the directions of the Philippine Development Plan (PDP), Labor and Employment Plan (LEP) and Decent Work Agenda (DWA) focusing on employment, rights at work, social protection and social dialogue. The responses further include governance to address recommendations specific to the labor administration system. The collaborative efforts of the DOLE bureaus, attached agencies and services have been realized through this progress report taking into account the comparative information from previous DOLE progress reports, the forms of consultation and discussions accomplished, the specific reform projects and programs undertaken, and the supplementing department orders issued.

The DOLE’s Response to the Arangkada 2nd Assessment Report correspondingly reflects the 2012 progress of the deliverables which the Department has committed and which is now being sustained. Likewise enunciated are specific responses which the Department has set for itself in improving the conditions requiring more positive outcomes in the Arangkada Assessment Report.

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PART 1:
On the area of “growing too slow”

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Recommendation No. 2 – STEADY

Job creation by the private sector should receive extremely high priority. The private sector creates jobs in response to demand for its products and services. Success at accelerating manufacturing and tourism sector growth and reforming the long underperforming agribusiness sector could provide millions of new jobs. 2012 Progress: DOLE conducted focused group discussion (FGDs), round table discussions (RTDs) and consultations involving industry leaders to get first-hand information on the needs and manpower requirements of industries and establishments. DOLE has identified regulations to be subjected to Regulatory Impact Assessment in 2012. The purpose of the assessment is to review the regulations in relation to its impact in government, business and community. The assessment is envisioned to come up with recommendations that will amend or improve existing regulations to reduce the burden to business, thereby making it easier to put up business in the Philippines.

The re-engineered Phil-JobNet will serve as the main LMI portal that functions as the hub of the DOLE’s skills registry and HRD data warehouse. To date, more than 100,000 vacancies are posted on the PJN. The DOLE Regional Offices and Public Employment Services Offices (PESO) continue to intensify their campaign among companies, encouraging them to post their job vacancies and respond to the challenge of soliciting 1M available vacancies from accredited establishments. Job Fairs and Industry-based Career Fairs are also being organized to target specific industries.

Recommendation No. 6 – STEADY

Remittances channeled into productive investments. Financial education for OFWs and their families is needed. The Personal Equity Retirement Account law (RA 9505) that creates a new savings vehicle for OFWs has yet to be implemented four years after its signing. 2012 Progress: The Financial Literacy Program under the Reintegration Program of OWWA is reported to have conducted a total of 458 trainings in-country for 18,240 participants and 170 trainings overseas for 9,721 participants from January to December of 2012.

Financial Literacy is part of the capability building under the OWWA program Family Support and Reintegration Services. The NCR regional office aims to conduct 10 trainings this year with 60 participants per training, or a total of 600 OFWs and dependents financially literate to handle remittances with conscientiousness. The OWWA RWO-NCR has intensified its campaign on financial literacy for the OFW beneficiaries for the first quarter of 2013 through a simple, comprehensive
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standardized module to be drafted jointly by bank institutions that conduct the seminar within Metro Manila. Aggressive promotion on savings consciousness for the OFW beneficiaries will not only address the lean months when remittances do not arrive on time and for unexpected emergencies such as untimely repatriation but it will also help prepare the OFW financially to integrate back to the mainstream most especially in ensuring the family’s future once the OFW decides to stay in the country for good.

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PART 2:
On “becoming more competitive”

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Recommendation No. 3 – DECLINED

Create a national psychology to improve international competitiveness ratings overall and in specific critical areas. The president could report on the state of national competitiveness. A heavy bureaucratic propensity to over regulate persists; sunset provisions on rules, red tape, and fees are rare. The president proclaimed Chinese New Year a non-working holiday without public consultation; the Congress may make it a law. The negative impact of such policies on competitiveness is not fully taken into account. 2012 Progress: Addressing the creation of a national psychology improving competitiveness, ISTIV Productivity Awareness Program, as one of the NWPC core productivity programs, is a values-driven human resource strategy for quality and productivity (Q & P) improvement that is rooted on the five ideal attributes of a productive individual. It is a management concept that recognizes the value of human resource in bringing about the needed changes to improve productivity and enhance competitiveness among SMEs.

The Program has benefitted a total of 455 establishments and 6,632 managers and workers from 2010-12. To ensure effectiveness of the training program, continuous monitoring and evaluation were conducted.

To increase awareness and marketability, the Program is promoted thru dissemination of brochures, posters, posting in the website and advertisements during learning sessions.

In 2012, PNoy proclaimed Chinese New Year a non-working holiday as the holiday fell on a work day. In 2013, the DoLE undertook a successful coordinated approach with business groups, the PLLO and other executive departments, and legislative committees in both Houses, to stop the passage of the bill declaring the Chinese New Year a non-working holiday. At the start of the 16th Congress in June 2013, when Congressional leadership and Committees have been configured, the DoLE shall initiate a pro-active program to help shape/influence the Congress in passing measures that will institutionalize/legislate measures to promote business competitiveness and a level playing field conducive to achieving a balance between economic growth and social protection for labor. The following steps shall be discussed for the consideration of the Secretary:

• Constitute a lean multi-sectoral legislative study and advocacy group that will assess relevant pending bills that impact on competitiveness, identify key actors in the legislative and conduct focused information campaign for or against proposed legislative measures. For example, there were more than 100 local bills filed in the 15th
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Congress that proposed non-working holidays for specific local government’s commemoration of historic/cultural/religious events. Such bills were not processed by the Labor Committee but other Committees like the Local Governance Committee. The DoLE conducted two (2) briefings attended by Congressmen and Senators on why non-working holidays, other than those prescribed by law should not be legislated nor proclaimed. A coordinated approach with other groups like Foreign Chambers will be helpful in the identification and lobby works against such bills. The group can also draft bills and congressional resolutions and identify sponsors and proponents of such measures. • Conduct briefings for Congress and Legislative technical staff on the subject matter.

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PART 3:
Big Winner Sectors

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AGRIBUSINESS
Recommendation No. 15 – STEADY
Ramp up agricultural education and training programs. Create a stronger agribusiness development curriculum. While enrollment in these programs seems healthy, many graduates end up pursuing different career paths after graduation. They do not appreciate the business potential of the industry outside of being an employee of a large agribusiness or food company in the Philippines or overseas. Successful homegrown small to mid-sized agribusiness ventures should be showcased by the government and these ventures should be encouraged to hire more graduates in order to professionalize management. 2012 Progress: DA, DepEd and TESDA will be working for a stronger partnership in education and development. This arrangement will focus on agri-business programs in schools, even non-TVET schools. Some of the initial next steps for this arrangement are as follows:

1. To organize a tripartite working group to push the process. 2. To identify one province per region where the needs are great and opportunities are present. 3. To get the LGU/provincial government on board. 4. To organize provincial summits focused on education and employment issues. 5. To co-design and implement the program of interventions.

Recommendation No. 16 – IMPROVED

Farmer groups need support to establish strong cooperatives. Work on this is being done by bigger cooperatives. Some assistance is needed for smaller ones. 2012 Progress: The DOLE Integrated Livelihood Program (DILP) managed by the Bureau of Workers with Special Concerns (BWSC) is the DOLE’s contribution to the Aquino Administration’s national agenda of reducing poverty through the promotion of livelihood and entrepreneurship and transforming them into community enterprises through convergence of services. It envisions productive, gainful and secure community employment to disadvantaged and vulnerable workers in the informal economy. DILP also endeavors to transform the Philippine society so that every Filipino can enjoy a better and dignified quality of life, consistent with the national goals of inclusive growth, poverty alleviation and job creation. The Program caters to the following:  Workers in informal economy engaged in small livelihood undertakings such
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 Disadvantaged/ unemployed workers especially to specific group of workers which include the agricultural workers (farmers, fisher folks), youth (15-20) years old), women, persons w/ disability, indigenous people (IPs), parents of child laborers, and the elderly;  Low-wage workers seeking to augment their income through the Workers Income Augmentation Program (WIN-AP);  Returning OFWs and OFW Family Circles members; and

as farmers, fisher folks, ambulant vendors or peddlers, ambulant service providers, vendors, tricycle or pedicab drivers and operators, among others.

The DOLE, through its regional, provincial and field offices, provides the following services: • • •

 Displaced Workers due to economic crisis and natural calamities/ disasters and armed conflicts through the DOLE Adjustment Measures Program (DOLE AMP). Provision of productive resources in the form of equipment, raw materials, tools and jigs that can be used by the eligible beneficiaries; Trainings, orientations and advisories on entrepreneurship development, business planning, productivity improvement, worker’s safety and health, and networking and business alliances; Assistance in the establishment of common service facilities that will respond to the common needs of the beneficiaries and facilitate their access to more productive resources, low-cost inputs, wider market, and higher technology; and Advocacy in setting-up of self-help mechanism for social security among informal workers utilizing the established common service facility.

One particular project under the DILP is the DOLE Kabuhayan (DK) Starter KITS Project, a livelihood formation strategy that is intended to bring about improved socioeconomic well-being of workers in the informal economy, in groups/sectors with special concerns, and displaced wage workers (local and overseas) and their families. The project will provide a livelihood starter KITS consisting of a package of services that will enable the target beneficiaries to start quickly a livelihood undertaking and become self-employed. It aims to engage them in sustainable selfemployment through easy to learn livelihood undertakings.

The project targets the poor and long-term unemployed especially those to the following special sectors: out-of-school youths, women, parents of child laborers, Indigenous People (IPs), physically/occupationally disabled, urban poor, elderly persons, landless farmers/fisher folks and other workers in the informal economy, and displaced wage (local and overseas) workers, OFW returnees and their dependents, either individually or as groups.
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The project has the following major service that the implementers shall provide to help the beneficiaries’ plan, set up, start operate their livelihood undertakings:

 Short-period training on production skills with entrepreneurship and business management  Self-instructional Learning Reference Materials (handbook/workbook) on Production, Entrepreneurship and Business Management Skills  Provision of livelihood tools, equipment, material and inputs  Provision of continuing business advisory and consultancy service at the Community Micro-Business Incubation Center (CMBIC)

The beneficiaries will be required to enroll in Social Protection Service like SSS, Philhealth and other alternative social protection schemes as soon as the business cycles allow it.

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BUSINESS PROCESS OUTSOURCING
Recommendation No. 1 – STEADY
Strengthen the industry with a robust legal framework, passing five key bills and opposing legislation that harms the IT-BPO investment climate. The amendment to the Labor Code removing the restriction on women working at night was signed as RA 10151. Bills seeking to make Chinese New Year a non-working holiday were filed in the House and Senate. The House approved it on 3rd reading, while the Senate approved it as a working holiday. 2012 Progress: The BPO Industry, which accounts for close to 800,000 workers in the industry, has requested for representation in the TIPC, as provided for in the recently enacted law on Tripartism. Given the importance of the BPO sector, the Secretary of Labor and Employment may wish to consider the BPO request for representation.

Recommendation No. 3 – IMPROVED

Draft and pass a Holiday Rationalization Act which restricts the total number of national non-working holidays; Malacañang should continue to release no later than mid-year the schedule for the following calendar year of all national holidays. No bill for Holiday Rationalization was passed during the 15th Congress. However, there is a Department of Labor and Employment (DOLE) regulation called “flexi-holiday arrangement” allowing swapping of holidays (along the lines of Recommendation C), provided employees consent to the swap. 2012 Progress: The DOLE issued Department Advisory No.02, Series of 2009 (Guidelines on the Adoption of Flexible Work Arrangements). One of the flexible work arrangements that employers can implement, after consultation with employees, is a flexi-holidays schedule. Under the scheme, employees agree to avail the holidays at some other days provided there is no diminution of existing benefits as a result of such arrangement. The purpose is to provide coping mechanisms and remedial measures in times of economic difficulties and national emergencies. The adoption of such arrangement is considered as a better alternative than the outright termination of the services of the employees or total closure of the establishment. Anchored on voluntary basis and conditions mutually acceptable to both the employer and the employees, it is recognized as beneficial in terms of reduction of business costs and helps in saving jobs while maintaining competitiveness and productivity in industries.

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Recommendation No. 12 – COMPLETED

The Task Force should also propose ways to modernize the Labor Code. BPAP’s Legislative Committee has successfully led many initiatives that have influenced policy-making and legislation to the benefit of the Philippine IT-BPO industry. 2012 Progress: The Agreements during the DOLE-BPAP dialogue:

The Department of Labor and Employment engaged the Business Processing Association of the Philippines in a dialogue to surface safety and health concerns and issues affecting the industry and to forge a mutually acceptable plan of action to assist the industry in enhancing their compliance with the OSH Standards. Among the immediate plan of action include: 1. Stepping up of advocacy to ensure that all BPO establishments have functioning enterprise-level OSH committee and programs that will effectively reduce risk of occupational illness and injuries through continuing engagement of BPAP, CCAP and other BPO groups to commit to adherence to provisions of GLS and OSHS through the forging of a code of good practice.

2. 3.

Strategic inspection of BPOs to determine level of compliance to OSHS and identify appropriate technical assistance that can be extended by government to increase the capacity of BPOs to conform with requirements of OSHS. Promotion of Healthy Lifestyle Programs in the Workplace for BPOs that will implement practical and essential interventions in preventing and controlling prevalent lifestyle related issues such as smoking, physical inactivity and alcohol consumption.

Recommendation No. 13 – COMPLETED

Propose amendments to the Labor Code that make it easier for companies to reasonably terminate employees and remove the prohibition on night work of women. DOLE issued Department Order 18-A, or rules implementing contracting/ subcontracting in the Labor Code, but excluded the IT-BPO industry from its implementation through Department Circular No. 1 series of 2012. A late 2012 meeting with DOLE Secretary Rosalinda Dimapilis-Baldoz also yielded a commitment to partner closely toward resolving issues concerning the IT-BPO sector, a framework drafted by BPAP for IT-BPO industry self-regulation, and support for DOLE’s programs. Regular meetings with Secretary Baldoz and her team will be held in 2013. 2012 Progress:

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In the forthcoming meeting of the DoLE with the BPO industry, particularly on the issues of self-regulation and considering the lifting of the night work prohibition for women, the DoLE should stress the need for compliance by the BPO establishments with the safety net and protection provided by the repeal i.e., providing sleeping quarters, medical advice and assistance and transportation to accessible areas at night to women workers. Compliance to social protection for women is an equally important issue to self-regulation and labor standards enforcement.

Recommendation No. 14 – STEADY

Industry and government should identify manpower requirement goals by sub-sector, function, and specialty. DOST-ICTO and IT and BPO associations are working on the overall and sub-sectorspecific manpower requirements. These efforts cover contact centers and customer relations management, corporate services and multi-lingual BPO, engineering services outsourcing, health information management outsourcing, software development and IT outsourcing, and creative services outsourcing and original content. 2012 Progress: Client specific labor market Information, Education and Communication (IEC) materials have been developed and advocated, to provide timely and accurate signals on jobs and skills in demand and shortages, readily accessible to the public. 121 Career Pamphlets or Occupational Briefs on In-demand and Hard-to-fill occupations identified in DOLE’s Project JobsFit (PJF). Development of Industry Career Guides providing an in-depth look and analysis on the 11 industries/sectors viability and potential which were identified by PJF as Key Employment Generators (KEGs), IT-BPO sector is one of the identified KEGs. The expansion of Networks of Guidance Counselors (NGCs) in the 16 regions nationwide, serve as the conduit of the DOLE in the conduct of career orientation courses and in providing adequate LMI to enable students and jobseekers to make informed career choices.

As part of TESDA’s role of strengthening industry partnerships and to gather industry-based information in skills requirements for the industry, the agency conducts regular consultation with the industry. These consultations result to identification of priority qualifications, identification of TRs for review and development of skills training programs specific to each industry.

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Recommendation No. 15 – IMPROVED

Adopt the National Competency Test at a regional (if not national) level. In 2012, 3,000 graduating students were assessed with BPAP’s Global Competitiveness Assessment Tool (GCAT) bringing the total of GCAT-assessed students to 20,000. DOST Science Education Institute (SEI) provided funding to assess 10,000 students and testing will continue in 2013. BPAP has driven more awareness on GCAT as an assessment tool for work readiness and continues to work with the IT-BPO companies to adopt GCAT for assessment or to prioritize the hiring of applicants with good GCAT scores. BPAP also participated in the discussions of the National Basic Education Competency Assessment for Kindergarten to Grade 12. 2012 Progress: TESDA has developed Training Regulations (TRs) for the IT-BPO industry and has assessed 14,505 and certified 3,501 persons for 2012. Qualifications
Animation NCII

Assessed
428 408 163

Certified
297 261 118 806 628

2D Game Art Development NCIII 3D Game Art Development NCIII Medical Coding and Billing NCII Game Programming NCIII

Visual Graphics Design NCIII

Medical Transcription NCII Programming NCIV

Contact Center Services

2D Animation NCIII 3D Animation NCIII

Assessment Tool scheduled for validation Assessment Tool scheduled for validation Assessment Tool scheduled for validation No assessment tool yet

10,051 1,204

2,251

No assessment tool yet

1.391

Recommendation No. 20 – IMPROVED

Develop an affordable Internet cafe English-training program. BPAP launched the Basic English Skills Training (BEST) e-learning tool, which was piloted in May 2012 with teachers of four schools in Quezon. BEST has also been rolled out with a trainers training program developed by industry, Trainers Methodology Plus, and offered through Technical Education and Skills Development Authority Technical Education and Skills Development Authority (TESDA). Another e-learning program, eAdEPT (Electronic Advanced English Pre-employment Training) will be rolled out in 2013. 2012 Progress: The OWWA maintains the Information Technology Program: -

An information and communication technology (ICT) skills training, the
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-

purpose of which is to bridge the communication gap through the use of internet between the OFWs and their families. Through this program, they learn how to use basic applications like Microsoft Word, Excel and Power Point.

OFWs expect to gain skills that will enhance their work, thus increasing their employability in the workplaces. These new IT skills can enhance their competitiveness in pursuing a career in the country upon their return. IT skills may also be used for career shifts.

The OWWA IT-Program conducted a total of 2,019 sessions in-country with a total of 23,198 trainees from both OFWs and dependents, while on-site there were 40 sessions conducted with a total of 1,720 participants from both OFWs and dependents.

TESDA has developed the curriculum on the Finishing Course for Call Center Agents (FCCCA) and the Contact Center Services (CCS) NC II in coordination with the BPO industry to address the concern on call center skills requirements. In the latest meeting with the industry, CCAP has committed to help in the review of the FCCA and CCS NCII as well as in the development of the assessment tool for CSS NC II. A total of 43,235 individuals have been provided scholarship to develop CCAs from FY 2011. As of March 2013, at least 70% or 30,319 individuals have been employed by the industry.

Recommendation No. 23 – STEADY

Reposition the IT-BPO career opportunity as world class. BPAP launched the Work Abroad, Live Here campaign in print and digital media (newspapers, websites, Facebook, Twitter). Other efforts such as the BPO Career Hub website are also running. BPAP set up www.workabroadlivehere.com as a site to help potential employees learn more about careers in the industry. The site is promoted on Facebook and in print and online news releases. A video was also produced and launched on YouTube to promote the Industry Training for Work Scholarship Program with TESDA. However, a multi-media campaign for career marketing was not funded. 2012 Progress: TESDA has developed the curriculum on the Finishing Course for Call Center Agents (FCCCA) and the Contact Center Services (CCS) NC II to address the concern on call center skills requirements. In the latest meeting with the industry, CCAP has committed to help in the review of the FCCA and CCS NCII as well as in the development of the assessment tool for CSS NC II.

Moreover, as part of its quality assurance mechanism, TESDA has suspended or put under moratorium the registration of new programs for Programming NC IV. This is primarily because programming NC IV has the second largest number of persons
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assessed (36,726) but has the lowest certification rate (7.39%) among the IT sector qualifications. Likewise, Programming NC IV will also be subject for review together with the TRs on 2D Animation NC II, 3D Animation NC III and Visual Graphic Design.

A total of P500 million was provided in 2011 for TESDA’s Industry Training for Work Scholarship Program (ITWSP) implemented in partnership with the Business Processing Association of the Philippines (BPAP) including member associations. It has reported a 67.7% employment rate as of March 21, 2013 and a total of 65,033 persons trained.

TESDA and the IT-BPO industry is also exploring the option of the development of industry assessors and putting up of a BPAP assessment center.

Recommendation No. 24 – STEADY

Develop a repatriation program for qualified Filipino talent overseas. BPAP participated in the OFW Summit sponsored by the Villar Foundation to attract OFWs and their families to consider the IT-BPO industry for employment. Some Filipino American (Fil-Am) executives and managers have come back to work in Philippinebased IT-BPO and GICs without a special program or incentives but due to market forces. We have no information regarding the effectiveness of programs of other organizations. 2012 Progress: Reintegration Services for Returning OFWs. The Philippines is adopting a full cycle reintegration program which means that reintegration initiatives start from predeparture of an OFW, reinforced on-site, and maximized upon return to the country. The reintegration program aims to mitigate the social costs of migration and ensure that the gains of migration benefit the OFWs. Reintegration planning will now be part of PreDeparture Orientation Seminars (PDOS) and Post-Arrival Seminars (PAOS) with OFWs preparing their re-entry and exit plans. Upon return, they will be provided assistance with local or overseas job search; self-employment or entrepreneurship; access to credit/micro-finance; assessment of need for additional techno-skills training; counseling on business or savings mobilization schemes; and psycho-social counseling for those with personal or family issues and challenges, preferably with support and cooperation of Family Circles (families of migrant workers organized by the Overseas Workers Welfare Administration).
(The following information has been retrieved from: http://www.dole.gov.ph/files/First%20100%20Days%20with%20additonal%20reports%2014%20October%2020 10%2011am.pdf)

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CREATIVE INDUSTRIES
Recommendation No. 8 – IMPROVED
Expand the Philippine design talent pool by making better opportunities available to Philippine designers working abroad. “In the approved bill, NDP has goals of “building awareness of the importance of design to the public through local and international exhibitions, conferences, competitions, community and school activities, and other design-related events” and “establishing more public creative zones and environments in Metro Manila and other central hubs in different regions across the country.” However, outside of the effort pursuing the enactment of the bill, no extensive program has been put forth by the government toward expanding the design talent pool. Government has yet to make available opportunities to Philippine designers working abroad.” 2012 Progress: With the implementation of the Philippine Qualifications Framework (PQF) and the K to 12 Education Program, the technology and livelihood education (TLE) subject can be redesigned and include design competitiveness as a common competency in Grade 7.

The passage of the Bill will strengthen the design capabilities in the Philippines and develop the creative potential of Filipinos. Through the Design Advisory Council composed of Government and private sector members, TESDA will be able to advance its concerns in standards development, competency assessment and certification and program registration. TESDA will work closely with the Design Center in order to develop the competent workers.

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MANUFACTURING
Recommendation No. 11 – IMPROVED
Link minimum wage policies to productivity enhancements. The two-tier wage system was introduced and implemented in 2012. Basic pay increase ranged from PhP2 to PhP23 and PhP10 to PhP30 for Cost of Living Allowance. President Aquino took a strong stand against the union-proposed PhP125 increase in minimum wage and instead, provided educational assistance and funding for skills upgrading of government workers. 2012 Progress: The NWPC and the Regional Boards will implement a transition plan to ensure full adoption of the two-tiered wage system. The plan basically involves massive information and awareness campaign nationwide to ensure proper understanding and secure support for the minimum wage policy and its reform, capacity building for the Boards and the social partners and strengthening the monitoring and assessment of socioeconomic conditions in the region and the impact of minimum wage policies on workers, enterprises and the labor market. The Regional Boards shall, at more frequent and regular intervals, report to the NWPC the result of such monitoring and assessment as basis for assessing the effectiveness of the wage reform.

Recommendation No. 12 – STEADY

Security of tenure. Government should continue to engage in tripartite discussions with labor groups and the private sector. DOLE DO 18-A defines the rules on contracting to protect labor as well as employers from unscrupulous contractors. Security of tenure bills did not pass in the 15th Congress. 2012 Progress: The issue on security of tenure is continuously on table for discussion at the Tripartite Industrial Peace Council. In fact, it is one of the priority issues to be raised by the labor sector during the Labor Sector Meeting with the President as part of the 2013 Labor Day Celebration. The TIPC labor sector already drafted and endorsed to the Office of the President their message on security of tenure and the proposed response that they want to be mentioned by the President.

The issue was partly addressed by the administrative issuance of DOLE D.O. 18-A on contracting and subcontracting. Developed by the tripartite stakeholders through a series of tripartite meetings and consultations, the issuance guarantees the following:

 It makes subcontracting a prohibited activity when it is done through repeated hiring of workers for a 5 to 6 months employment contract under the same employer or Service Agreement of the same duration.
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 Workers hired and placed by contractors/subcontractors to companies/principals are considered as regular employees of the contractors. As such, they are entitled to all the rights and privileges afforded to them by the Labor Code, including minimum wage and general labor standards, occupational safety and health, right to security of tenure, right to self-organization and collective bargaining.

Recommendation No. 13 – IMPROVED

Rationalize holidays. The Philippines continues to have one of the highest numbers of paid holidays in Southeast Asia, twice as many as Vietnam. Proposals for new paid holidays continue to be made. DOLE issued a policy brief proposing an increase in the number of paid holidays. 2012 Progress: DOLE is consistently opposing proposed legislations on declaration of special holidays.

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TOURISM, MEDICAL TRAVEL, & RETIREMENT
Recommendation No. 8 – STEADY
Correct human resource competitive disadvantages. DOT and ADB are working together to address this under a new ADB project facility. This is emphasized in the National Tourism Development Plan for 2011 to 2016. The “techvoc” training path of DepEd for high school students not advancing to college and TESDA training programs both emphasize training for tourism skill development. 2012 Progress: In line with the PDP 2011-2016, TESDA has also identified the tourism industry as one of its priority sectors and has developed 17 Training Regulations: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Attractions and Theme Parks Operations NC II Bartending NC II Bread and Pastry Productions NC II Commercial Cooking NC III Commercial Cooking NC IV Events management Services NC III Food and Beverage Service NC II Food and Beverage Service NC III Food and Beverage Service NC IV Front Office Services NC II Housekeeping NC II Housekeeping NC III Housekeeping NC IV Travel Services NC II Tour Guiding Services NC II Tourism Promotion Services NC II Cookery NC II

The assessment and certification mandate of TESDA seeks to determine whether the graduate or worker can perform to the standards expected in the workplace based on defined standards. This ensures the productivity, quality and global competitiveness of the workers. In 2012, a total 280,435 persons were assessed and 247,104 were certified in all the qualifications under the tourism sector. Moreover, TESDA in partnership with the DOT-TIBFI is committed to the following: • Comparability of CS/TR with the ASEAN Tourism Toolbox under the ASEAN MRA for Tourism Professionals; and • Philippine Tourism’s implementation of the ASEAN MRA and Phil. Trainers and Assessors Training
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Recommendation No. 9 – STEADY

Provide technical and marketing training for LGU tourism officers; improve services of tourism workers. Included in the National Tourism Development Plan for 2011 to 2016. 2012 Progress: Hotel, restaurant and tourism are one of the identified KEGs. According to the Bureau of Local Employment, ICG on HRT will be released this year.

As earlier mentioned, TESDA has developed the TRs and implements assessment and certification to ensure the quality, productivity and global competitiveness of the workers in a particular sector.

Another qualification that has a TR and also caters to the tourism industry is Hilot (Wellness Massage) NCII. This qualification though under the health, social and other community development services sector finds its way and fills-in the needed skills in the tourism industry, For 2012, TESDA has assessed 8,101 and certified 7,633 hilot with a certification rate of 94%.

Recommendation No. 10 – STEADY

Increase efforts to meet the manpower demand of hotels and restaurants; make local examination standards for massage therapists appropriate to high school graduates. Included in the National Tourism Development Plan for 2011 to 2016. 2012 Progress: The NWPC/RTWPBs, in coordination with the DILG and the DOT, will conduct orientation workshops for LGU tourism officers on service quality. The NWPC will identify priority regions where orientations will be initially conducted. There is however, continuous review and upgrading of training modules in accordance with industry requirements and standards. As earlier mentioned, TESDA has developed Training Regulations for the tourism industry. It is also one of the priority section supported by the TWSP.

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Recommendation No. 13 – STEADY

Allow more foreign dentists, doctors, medical technologists, nursing professionals, optometrists, physical therapists, and teachers to practice their professions. Discussions with PRC are moving toward more liberal approaches to the practice of foreign professionals, provided there is reciprocity. 2012 Progress: The initial preparation of the Positive List of Occupations or Skilled Occupation Shortage List (SOSL) for the Philippine Labor Market Test is a policy development initiative aimed at facilitating the flow of foreign workers with critical skills and sending appropriate labor market signals to education and training institutions and employers to expand training and supportive educational opportunities in the shortage occupations. The positive list is targeted to be finalized within the year.

The limitations in the foreign equity participation (60/40) in education are inscribed in the Philippine Constitution. Foreign teachers and researchers may be allowed to work in the Philippines upon compliance with Alien Employment Permit and Special Permit to practice profession under section 7(j) of the PRC Modernization Act of 2000. At present, foreign professionals including doctors, dentists, medical technologists, nurses, optometrists, physical therapists and teachers may be allowed to practice their professions under any of the two modes (2) modes: (1) Registration, with or without examination or (2) Special temporary Permit. A foreign national may be admitted to the national licensure examination upon establishing prior reciprocity arrangement between his/her country of origin and the Philippines. On the other hand, Special Temporary Permits may be issued to foreign nationals, without need of proving existence of reciprocity unless otherwise required by the pertinent professional regulatory law.

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PART 4:

General Business Environment

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ENVIRONMENT & NATURAL RESOURCES
Recommendation No. 1 – IMPROVED
Environment: Solid Waste. Implement the Solid Waste Management Act (RA 9003). Build sanitary landfills to contain the future solid waste of the metropolis and clean up existing dumpsites. Improve garbage collection and recycling. Establish clear rules and standards that would allow modern incineration technologies. Amend the Clean Air Act to allow non-polluting clean incineration. The 2011 fatal Baguio landfill disaster could be repeated. The Department of Environment and Natural Resources (DENR) said that clean incineration, which is allowed under a SC decision, is being considered. The growing trend to prefer organic produce offers an opportunity on increased composting, which provides fertilizer on organic plants. SIMBY (Start In My Back Yard) must continuously be promoted to confine solid waste generation at source-households and offices. Local garbage collection must be analyzed; it has been observed that some LGUs benefit from the trucking of garbage, hence no incentive to reduce waste. 2012 Progress: In December 2012, the TESDA Board has approved the prioritization of three qualifications in the area of solid waste management for training regulations development, to wit: 1. 2. 3. Site Foreman Spotter (Tumbalero) Palero

These qualifications were identified in the industry consultations conducted by TESDA with partners-industry bodies and associations on the basis of the needs of the industry/sector, nationwide application in terms of public interest/welfare, employment generation and investment opportunities; and the satisfaction of the criteria for skills standardization and certification (i.e. requiring relatively long period of education or training, performance of the competency affecting and endangering people’s lives and limbs, competency involving the handling of complex equipment, tools and supplies). The prioritization of the above qualifications also complements the implementation of the Solid Waste Management Act (RA 9003) as it would professionalize and upgrade the skills of the people involved in solid waste management in the country.

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BUSINESS COSTS
Recommendation No. 3 – IMPROVED
Introduce a more flexible minimum wage and/or piecework policy for distressed industries; develop new industrial zones with infrastructure that offer lower minimum wage rates. The two-tiered wage policy being introduced by DOLE (see Part 3: Labor: Recommendation D) is an important reform that over time, the Philippine minimum wage can be made more competitive, especially since minimum wages are rising in China, Indonesia, Malaysia, and Thailand. Although there are millions of jobless Filipinos, GPH is not considering making exceptions to minimum wage. FDI in low labor cost export manufacturing has expanded in countries where labor and other business costs are lower than in the Philippines. Recommendations to create export zones with minimum wage holidays to attract investors, such as garment and footwear export firms, have not been considered seriously by government despite their potential to create millions of jobs. 2012 Progress: The NWPC, through its Regional Boards, conduct time and motion studies for enterprises with workers paid by results. The conduct of time and motion studies involves a scientific method of standard- setting and requires participation of representatives of workers and management to ensure the accurate, fair and reasonable setting of production standards. Minimum wages in the Philippines are comparable with other Asian countries. Specifically, the daily minimum wages in Regions III (US$7.76), IV-A (US$8.07) and VII (US$7.04) are lower than those of China (US$7.74) (in the case of Region VII), Malaysia (US$9.80) and Thailand (US9.84). The daily minimum wage in the country is highest in NCR at US$13.41, given the region’s level of living and economic development. It is only the minimum wage in NCR which has remained outside the range of the minimum wages in the country at US$5.36 in ARMM to US$8.07 in Region IV-A.

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Recommendation No. 3 – IMPROVED

Absolute moratorium on new non-working holidays; veto any legislation creating any new non-working holidays; some non-working holidays should be changed to working holidays. Employers in the Philippines absorb the cost of more holidays and leave days for their workers than in competitor economies, raising the cost of doing business and making the Philippines less attractive to many of the companies relocating from China and moving to Bangladesh, Cambodia, Indonesia, and Vietnam. The number of paid holidays has stabilized, but there has been no effort to reduce them to get closer to the ASEAN average of 15 days. The DOLE Institute for Labor Studies issued a special report in 2012 that called for an end to more paid holidays. Rationalization of non-working holidays remains a priority. 2012 Progress: DOLE is consistently opposing proposed legislations on declaration of special holidays.

Recommendation No. 12 – STEADY

New GPH rules and regulations should not be issued without approval of a central office; contain a sunset provision. The concept of sunset provisions and periodic re-justification of public sector rules, regulations, and fees have not been adopted in the Philippines. Stakeholders are not always consulted by government agencies in their rule making. CSC could be empowered to do more to comment on and review regulations through an EO. 2012 Progress: The ongoing Regulatory Impact Assessment pilot project to the Department of Labor and Employment and other pilot agencies with the technical assistance of the Asian Development Bank paved the way for a new era of improving regulatory practice in Philippine government. With the objective of strengthening the business climate and improving the competitiveness of the country’s economy, the pilot project introduces ways to make regulations efficient while adopt best practice principles in developing them. The Department of Labor and Employment aims to engage not only the regulatory bodies under its supervision but also encourage all other regulatory offices that render regulations and policies to propagate, among others, the use of the regulatory impact assessment tool (RIA) as well as the culture of a best practice regulations across government. Engaging all the regulatory authorities and their key stakeholders will maximize the potentials of what the RIA process has to offer. The advocacy and communication plan of the RIA Pilot Project thus requires a component that will enable a wider reach of collaborators with regulation-making agencies. It is for these reasons that the DOLE embarks on an initiative in creating a platform that gathers a multi-stakeholder, inter-agency network of actors involved in regulations in the country.
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FOREIGN EQUITY & PROFESSIONALS
Recommendation No. 9 – IMPROVED
Encourage PRC to relax its interpretation of reciprocity provisions. The issuance of PRC Resolution 2012-668 on the Guidelines on the Practice of Foreign Professionals in the Philippines is an explicit recognition of the reciprocity provisions of existing laws regulating the practice of professions. It serves as an invitation for foreign nationals to practice unrestricted professions in the Philippines. But PRC and GPH can do much more to publicize this policy. 2012 Progress: Reciprocity requirement in the practice of profession is prescribed in the professional regulatory laws as well as in the PRC Modernization Act of 2000.

The initial preparation of the Positive List of Occupations or Skilled Occupation Shortage List (SOSL) for the Philippine Labor Market Test is a policy development initiative aimed at facilitating the flow of foreign workers with critical skills and sending appropriate labor market signals to education and training institutions and employers to expand training and supportive educational opportunities in the shortage occupations. The positive list is targeted to be finalized within the year.

Recommendation No. 10 – IMPROVED

File bills to open the practice of professions now closed by law to foreign nationals. Bills regulating the practice of five professions (Criminology, Forestry, Environmental Planning, Pharmacy, Radio and X-Ray Technology) and amending existing laws to include a foreign reciprocity provision have advanced in Congress. The Environmental Planning bill was approved by Congress and will be transmitted to the President for his signature. The bills on Criminology, Forestry, and Pharmacy, which were approved on Third Reading in Congress, are low hanging fruits which Arangkada will recommend for passage at the first regular session of the 16th Congress. 2012 Progress: This will require amendment of existing professional regulatory laws which is under the Professional Regulatory Boards and the PRC.

The initial preparation of the Positive List of Occupations or Skilled Occupation Shortage List (SOSL) for the Philippine Labor Market Test is a policy development initiative aimed at facilitating the flow of foreign workers with critical skills and sending appropriate labor market signals to education and training institutions and employers to expand training and supportive educational opportunities in the shortage occupations. The positive list is targeted to be finalized within the year.
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To this date, there is an absolute ban on the entry of foreign players to at least five (5) regulated professions, namely: criminology, forestry, pharmacy, environmental planning and radio and x-ray technology. Nevertheless, the PRC has been constantly engaged in the review of existing regulatory policies, particularly on the practice of profession by foreign nationals. The number of bills pending in Congress attests to the Commission’s ardent desire to update regulatory laws including the provisions relating to the practice of profession by foreigners, Though admittedly, removal of these restrictions and limitations will entail rigorous legal procedures.

Apart from the review of the regulatory laws on the practice of profession, the Foreign Investment Negative List (FINL) has likewise been the recent subject of scrutiny. While the Joint Foreign Chambers of Commerce is very articulate on the need to remove the “practice of profession” from FINL, the Commission holds that its inclusion is not misleading or incongruent with those items included in the list. As the Commission has consistently pronounced, the 1987 Constitution itself has expressly reserved the practice of profession to Filipino citizens. Corporate practice of profession, whenever allowed by the pertinent professional regulatory law, is likewise limited to Filipino citizens. Thus, inclusion of the same in the FINL finds sufficient bases in policy and law. Nevertheless, with the current trend towards liberalization, with the professional services not being exempt therefrom, the FINL itself will be undergoing major review that will surely have a phenomenal impact on the local labor and employment situation.

Recommendation No. 12 – IMPROVED

Philippine diplomacy should seek increased opportunities for Philippine professionals to work abroad. We have no information to evaluate whether any increase in diplomatic efforts to benefit Philippine professionals is underway. However, the Philippines is partnering in the ASEAN program to allow cross-border practice for selected professions. 2012 Progress: The recent initiatives of the Professional Regulation Commission have been geared towards promoting and facilitating borderless practice for most of the regulated professions, through the conclusion of mutual recognition arrangements and international, multilateral, and bilateral agreements. To mention a few, the Philippines has been an active party to the various ASEAN MRAs; Asia-Pacific Economic Cooperation; Japan-Philippines Economic Partnership Agreement; and many other bilateral agreements including ASEAN-Japan, ASEAN-India, ASEAN-Korean and Australia-New Zealand ASEAN Free Trade Agreements. In the ASEAN region alone, there are seven (7) mutual recognition arrangements, which cover the engineering, nursing, medicine, dentistry, accountancy, surveying and architecture professions. With the conclusion of such MRAs, cross-border practice of covered professionals becomes less restrictive, in view of the mutual recognition of substantial equivalencies of professionals standards and competencies
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among the ASEAN Member States. The same is true with the recent institutionalization of the Philippine Qualifications Framework, in relation to the ASEAN Qualification Reference Framework. Through the PQF, alignment with international Qualifications Framework (AQRF) is facilitated for the purpose of enabling comparisons of qualifications across countries that will support recognition of qualifications, facilitation of lifelong learning, promotion and encouragement of credit transfer and learner mobility and the promotion of worker mobility.

On a wider scope and perspective, the Asia-Pacific Cooperation, of which the Philippines is part of, has constantly pursued to establish an international benchmark competence standard and a framework for the recognition of substantial equivalence of these standards and quality assurance systems. The registry of APEC engineers and architects are gradually gaining membership in the different APEC economies.

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LABOR
Recommendation No. 1 – STEADY
Modernize the 39-year old Labor Code to end the disadvantage it creates for the Philippines with regional competitors. DOLE Secretary Baldoz issued AO 375 in August 2011, constituting a Tripartite Labor Code Reform Project. This ad hoc project team has not moved forward nor presented its recommendations to the Tripartite Industrial Peace Council (TIPC). In the past, there were attempts by Congress to amend the 1974 Labor Code. No omnibus bill has been filed in Congress to effect a wholesale amendment. Several bills, however, were filed and some were passed to amend specific provisions of the outdated Labor Code, including 52 amendments made on the Labor Code over time. Two bills amending the Labor Code have passed this Congress and may be enacted: Strengthening Tripartism and Strengthening Conciliation-Mediation as a Voluntary Mode of Dispute Settlement for all labor cases. 2012 Progress: According to legislators in the 15th Congress involved in labor and employment issues in both Houses, the doable approach to modernizing the Labor Code is to prioritize the reforms needed and based on consensus forged (tripartite), push for reforms on a piece meal or per book basis. As we head towards a presidential election in 2016, labor code reforms may prove divisive amongst stakeholders and difficult to pass. Thus, part of the strategy should be to provide matrix of reforms according to a political scanning that should be updated from the commencement of the 16th Congress.

The Tripartite Labor Code Reform Project (AO No. 375, s 2011) is on-going and the New Labor Code is targeted to be submitted during the opening of the 16th Congress. Between now and the opening in July 2013, the drafting and consultation process will be undertaken. Working Draft No. 1 of the codal provisions of the proposed New Labor Code has been completed and was submitted in July 2012. Working Draft No. 2 has been completed and was already presented to the Secretary. Meetings and consultations with the DOLE Technical Working Group and other stakeholders are on-going to incorporate the Secretary’s and other stakeholders’ comments. Thereafter, the Working Draft will be discussed in the Small Tripartite Group prior to the conduct of tripartite consultations at the regional and national levels. TESDA participates as a member of the DOLE Inter-Agency Technical Working Group on the Labor Code Review.

TESDA reiterated its position that Book II, Title II- National Manpower Development Program of the Labor Code was already superseded by RA 7796 or the TESDA Act of 1994. The TESDA Board had issued a Resolution No. 2007-30 emphasizing its position to treat the TESDA Law as a reference document and be treated independently of the Labor Code Review.
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Reforms are being undertaken in programs provided for in the Labor Code, such as the Apprenticeship Program.

Recommendation No. 2 – STEADY

Rationalize holidays to approach ASEAN average of 15 paid holidays a year. While DOLE has been consistent with its position to maintain existing regular holidays to 12, and special days to three, the Philippines continue to have more paid regular and special holidays than many of the ASEAN countries. Typical male employees today have 34 paid leave days, excluding paid holidays that number more than 20 per year. Female employees can avail of as many as 142 or 160 more paid leaves. (Data counts as “employed” anyone working just a few hours a week.) There are pending bills increasing maternity leaves from 60 to 120, days, with an optional additional 60 days (HB 6128), 15 day paid leaves for victims of domestic violence (HB 5334), 14-day paid bereavement leaves (HB 3762), 15 day leaves for legitimate spouses of OFWs (HB 2550), and several other bills granting more days off to employees for various reasons. More Philippine holidays and paid leave days will further reduce productivity and reduce the country’s global competitiveness. In 2012, DOLE issued a policy paper, which it circulated to Congress, recommending that no additional non-working holidays be approved. 2012 Progress: DOLE is consistently opposing proposed legislations on declaration of special holidays.

Recommendation No. 3 - COMPLETED

Develop a highly positive and supportive public environment for the industry, informing the media, public, and Congress of its contribution to the Philippine economy and correcting misperceptions. A special Task Force is needed. DOLE Labor Advisory No. 2 series of 2009 allows flexible work arrangements, such as compressed work week, reduction of working days, rotation of workers, forced leave, broken time schedule, and flexi-holiday schedule. Perhaps better guidelines and dissemination can help in the full implementation of this Advisory. Also, on August 7, 2012, DOLE issued Labor Advisory No. 1 series of 2012, together with question and answer guidelines on the payment of wages and related issues on suspension of work to do calamities. 2012 Progress: The DOLE issued Department Advisory No.02, Series of 2009 (Guidelines on the Adoption of Flexible Work Arrangements). One of the flexible work arrangements that employers can implement, after consultation with employees, is a flexi-holidays schedule. Under the scheme, employees agree to avail the holidays at some other days
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Likewise, the DOLE issued Labor Advisory No. 01, Series of 2012 (Payment of Wages Due to Cases of Suspension of Work in Calamity Stricken Areas Pursuant to Presidential Proclamation or Similar Issuances) which specified the conditions of the payment of wages for employees in calamity-stricken areas promoting social protection addressing and alleviating the plight of workers in times of crisis. The following issuances are uploaded in the official websites of the respective agencies of the DOLE who oversees the specific areas of concern: Advisory No. 2, Series of 2009 may be retrieved from: http://www.bwc.dole.gov.ph/userfiles/file/DA%2002-09.pdf Advisory No. 1, Series of 2012 may be retrieved from: http://www.nwpc.dole.gov.ph/pages/labor-advisory-no1-s2012.pdf

provided there is no diminution of existing benefits as a result of such arrangement. The purpose is to provide coping mechanisms and remedial measures in times of economic difficulties and national emergencies. The adoption of such arrangement is considered as a better alternative than the outright termination of the services of the employees or total closure of the establishment. Anchored on voluntary basis and conditions mutually acceptable to both the employer and the employees, it is recognized as beneficial in terms of reduction of business costs and helps in saving jobs while maintaining competitiveness and productivity in industries.

Recommendation No. 4 – STEADY

Make wage increases consistent with inflation and productivity. The National Wages and Productivity Commission issued Resolution No. 2 series of 2010, introducing a two-tiered wage system. The first tier consists of a mandatory floor wage, while the second tier is a voluntary productivity- or performance-based wage component above the floor wage. Regional floor wage is the lowest wage for the most vulnerable workers—the unskilled and new entrants to the labor market. Most recent poverty threshold estimates are used as a major reference for determining the regional floor wage. The two-tiered wage system has first been implemented in Region IV-A on a pilot basis. Regional Wage Boards should implement this system in all other regions of the country. In coordination with other government agencies and private companies, DOLE also pursues non-wage benefits to address specific needs of a target group of workers, particularly the minimum wage earners. 2012 Progress: Under the two-tiered wage system, the Regional Boards consider poverty threshold (as indicator of needs of workers and their families), average wage (as indicator of employers’ capacity to pay) and the region’s socioeconomic conditions such as changes in the levels of prices (as indicated by inflation), employment, and the region’s economic growth (as indicated by the Gross Regional Domestic Product). Specifically, the Boards consider, along with the other criteria, the amount needed to
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restore the erosion in the purchasing power of workers in deciding on the amount of wage adjustment.

The two-tiered wage system also aims to tighten the link between pay and productivity by encouraging enterprises to adopt productivity incentives and gainsharing schemes. Enterprises are encouraged to set up or tap existing plant-level labor management mechanisms (e.g. LMCs) for the purpose of developing and implementing productivity improvement programs and for formulating a system that would ensure the fair and reasonable sharing of productivity gains. The Regional Boards have been directed to issue advisories to guide enterprises in adopting productivity improvement and gain-sharing schemes

Recommendation No. 5 – STEADY

Further narrow the skill-jobs mismatch by revising curricula and training. Ensure that skills needed for the Seven Big Winner sectors are included in curricula. Increase interaction between TESDA and the private sector. Hundreds of thousands of jobs remain unfilled, while millions of Filipinos are jobless. Government, industry, the academe, and non-governmental organizations are continuing to address the issue by determining what is causing the mismatch. These stakeholders are refining a roadmap of Philippine education that can prepare future entrants into the workplace to become more productive in their chosen careers and contribute to nation-building and to a globally competitive Philippine economy. Meanwhile, DOLE chairs the Technical Working Group on Convergent Programs to address job mismatch issues under the Human Development and Poverty Reduction Cluster. Convergent programs include a K-12 modeling program for Grades 11 and 12, review of Higher Education and Training Curriculum, career guidance advocacy plan, skills registry system, and partnerships with various industry sectors. 2012 Progress: The training regulations and curriculum by TESDA are developed based on standards of the industry. This is to ensure that what TESDA develops is what the industry requires, thus facilitates employment of TVET graduates. Industry experts are engaged in the specification of competency standards, training standards, assessment tools and learning materials. TESDA’s conduct of regular industry consultation is part of the agency’s role of strengthening industry partnerships and to gather industry-based information in skills requirements for the industry. The consultations result to identification of skills priorities to guide TVET institutions in their program offerings.

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Recommendation No.6 – STEADY

Create millions of new jobs, many of higher quality, through increased investment. There should be more pro-investment policies and less anti-employer laws, policies, and regulations in order to entice investments that create more employment. In the 2011 Labor and Employment Plan, DOLE endorsed policy and program actions to remove impediments to the creation and expansion of enterprises, and to identify positive reinforcing elements to business innovation and dynamism. However, much is still expected toward implementing these much-needed pro-investment, pro-employment policies and legislations. 2012 Progress: In aid of attracting foreign investments, the DOLE has substantially simplified the procedures and reduced the documentary requirements in the issuance of employment permits. DOLE will be pilot testing within the year, the AEP Online Application System to further simplify application process and eliminate personal contact of applicants and evaluators. (please refer to progress on Part I Recommendation 2)

Recommendation No. 7 – DECLINED

Develop a package of incentives to attract manufacturers relocating from China. There should be more pro-investment policies and less anti-employer laws, policies, and regulations in order to entice investments that create more employment. In the 2011 Labor and Employment Plan, DOLE endorsed policy and program actions to remove impediments to the creation and expansion of enterprises, and to identify positive reinforcing elements to business innovation and dynamism. However, much is still expected toward implementing these much-needed pro-investment, pro-employment policies and legislations. 2012 Progress: The DOLE recognizes its role in creating a hospitable environment and in improving the investment climate in the Philippines through its efforts to address proinvestment policies and regulations. The Department has undertaken substantial measures to ensure these are being realized. A monograph series entitled, “A Framework for Promoting Decent Work by Integrating Employment in Industrial Policies in the Philippines,” which will be issued by the Institute for Labor Studies takes cognizance of the formulation of an Industrial Policy framework in the efforts to boost the manufacturing industry in the country. Likewise, the Regulatory Impact Assessment project currently examines regulations that may directly or indirectly impede influx of investments in the country. Labor regulations are being assessed by taking considerations of the need for government action or intervention, policy objectives addressing problems and risks, options analysis assessing impacts to business and community and key stakeholders consultations.
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Recommendation No. 8 – STEADY

Maintain the low level of labor disruption of business operations. Allow self-regulation of companies. Strengthening TIPC, the highest advisory body on labor in the executive branch, contributed to the reduction of work disruption. The preference of conciliation and mediation over arbitration as the mode of dispute settlement helped in reducing work disruptions. DOLE also continues to cultivate a culture of voluntary compliance by reaching out to big companies to deal with their subcontractors’ legitimacy. This enhances fair and just treatment of workers by small employers, leading to more stable working environments devoid of work issues that can cause disruptions in business operations. 2012 Progress: Since 2010, DOLE has been promoting the concept of developing Voluntary Codes of Good Practices (VCGPs) in all industries nationwide. The idea is to foster a culture of industry self-regulation, where labor and management freely set industry rules and standards in accordance with existing laws and regulations. As of December 2012, a total of 81 VCGPs were developed in such industries as hotel and restaurant, mining, BPOs/ICTs, tourism, academe, hospital, rubber and banana plantation, fishing, shipbuilding, construction and other industries that are considered key employment generators. The exhaustive conciliation-mediation strategy such as team and 24/7 or “tutok” approach adopted within the NCMB Regional Branches helped in maintaining the incidence of strikes at the single digit level and shorter strike duration. Further, the convergence approach with DOLE, RTIPCs and LGUs in case management of critical and high-profile cases proved beneficial in the settlement of disputes. For 2012, only 3 actual strikes were recorded. Strike duration is shorter with only 6 days for the period July 2010 to December 2012 compared to 26 days for the period January 2008 to June 30, 2010

The preference of conciliation-mediation over arbitration as the mode of dispute settlement helped in reducing work disruptions. This is primarily bolstered by the NCMB conciliator-mediators’ continuing efforts to explore every possible means to effect amicable settlement in all the cases they handle.

The Single Entry Approach Program (SEnA) being implemented in all DOLE Offices also succeeded in dejudicializing the dispute settlement procedures thereby providing better options to workers and employers in addressing workplace issues. Since its inception in 2010, there has been a sharp increase in the number of requests for assistance filed in the different offices and agencies of the Department. As of December 31, 2012, the DOLE, through its regional offices, bureaus and attached agencies has processed more than 66,930 RFAs, settling some 37,238 (56%), benefiting 57,168 workers with P 1.6 B in restitution benefits. The compulsory hearing of small money claims recorded drastic decline by 99% because of the SENA program or from 4,485 in 2009 to only 61 in 2012. Similarly, compulsory arbitration cases filed at the NLRC dropped by 3,598 or 11% in 2012 from 33,401 cases in 2009.
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The Project SpeED (Speedy and Efficient Delivery of Labor Justice) contributed also to the reduction of work stoppages and case dockets. Project SpeED is among the DOLE reforms in labor arbitration and adjudication system pursuant to the 22-point labor and employment agenda of the President which calls for the restoration of integrity and fairness in the system; and ensuring quality decision through speedy, fair and just disposition of labor cases.

Project SpeED sets a very high 98% disposition rate. The reform covers all offices of the DOLE including its Attached Agencies, at all levels of adjudication. By the end of the implementation of the project SpeED 5 as of December 31, 2012, 98% of the labor cases enrolled have been disposed of. The Offices and Agencies accomplishment are as follows: • • • • • • • ECC – 100% disposition of its commitments of 4 cases; BLR – 99% disposition of its commitment of 68 cases; NLRC – 98% disposition of its commitments of 12,084 cases; NCMB– 94% disposition of its commitments of 166 cases; BWC – 98% disposition of its commitments of 3,927 cases; POEA – 98% disposition of its commitments of 3,838 cases LS – 100% disposition of its commitments of 227 cases.

Cases disposed totaled 19,930 for 98% disposition rate with an aggregate of 384 cases still pending as of December 31, 2012.

By 2013, all pending cases at the various offices and attached agencies of the Department are expected to be resolved within the prescribed disposition period.

Recommendation No. 9 – IMPROVED

Improve the speed and fairness of the adjudication of labor cases before the National Labor Relations Commission (NLRC). The passage of the bill strengthening conciliation and mediation services would declog the department’s quasi-judicial arm and appropriate offices, prevent issues from escalating into full-blown labor disputes, and reduce lawsuits, especially those on small money matters. 2012 Progress: Republic Act No. 10396 (An Act Strengthening Conciliation-Mediation as a Voluntary Mode of Dispute Settlement for All Labor Cases, Amending for this Purpose Article 228 of Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines), enacted on 14 March 2013, is designed to unclog case dockets and speed up adjudication of labor cases before the NLRC. The law seeks to strengthen conciliation-mediation as a voluntary mode of dispute settlement for labor-related cases, which provides that all issues arising from labor and employment shall be subject to mandatory conciliation-mediation.
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The law allows any or both parties involved in a dispute to pre-terminate the conciliation-mediation proceedings and request referral or endorsement to DOLE agency which has jurisdiction over the dispute. It provides that labor arbiter or the appropriate Department of Labor and Employment (DOLE) agency that has jurisdiction over the dispute shall entertain only enforced or referred cases by the duly authorized officer.

• Continuous implementation of the Project Speedy and Efficient Delivery of Labor Justice (SpeED) and the Single-Entry Approach (SEnA); • Continuous monitoring of the Minimum Level of Performance (Quota System on Case Disposition/Ageing) per En Banc Resolution No. 13-07, Series of 2007; • Amendment of the 2011 NLRC Rules of Procedure per En Banc Resolution No. 11-12, Series of 2012, with the end view of streamlining the procedures and processes; • Promulgation of the 2012 NLRC Sheriffs’ Manual on Execution of Judgment per En Banc Resolution No. 10-12, Series of 2012, with the end view of expediting the enforcement of decisions and streamlining the execution proceedings; • Issuances of Administrative Orders, with the end view of streamlining and expediting the resolution of cases, which include, among others, guidelines on the treatment of frivolous appeals, petitions, and motions; guidelines on examination of records on appeal; guidelines on the appearance of non-lawyers & special power of attorneys; guidelines on service of summons, decisions, resolutions and orders; guidelines on transmittal of case records on appeal; • Creation of Board of Inquiry (BOI), to investigate administrative complaints against Presidential appointees, and Administrative Complaints Committee (ACC), for rank-and-file employees; • Adoption of Efficiency & Integrity Board (EIB) Rules of Procedure; and • Capacity-building programs (e.g. Values Enhancement Seminars, etc.) The Department has set for priority the recommendation of the bills for the 16th Congress, those that address youth unemployment and unemployment in general and improving labor market competitiveness.

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LEGISLATION
Recommendation No. 2 – IMPROVED
Prioritize bills that improve competitiveness, increase investment and revenue, and create jobs; deter market-inimical bills. Deliberation on bills that improve competitiveness, increase investment and revenue, and create jobs moved faster in 2012. 15 business and economic reform laws were enacted as of December 2012 and an additional 15 are to be transmitted to Malacañang for President Aquino’s signature. Many more were approved on Third Reading in one chamber and are pending in plenary in the other. These may still be passed in the remaining weeks of session of the 15th Congress. A number of market inimical bills, including declaration of new local nonworking holidays, mining-free zones, and extreme pro-labor laws have advanced, especially in the House. 2012 Progress: The DOLE Legislative Liaison Office (DLLO) oversees the Department’s legislative agenda, including action on pending legislative bills on labor and employment, and drafting of proposed bills. The priority legislative agenda of DOLE is anchored on the Philippine Development Plan and the Labor and Employment Plan which hallmark the platforms of the 22-point labor and employment policy agenda of the President. The DLLO also recognizes the Legislative-Executive Development Advisory Council (LEDAC) process where bills are enrolled, reviewed and recommended to the President and to Congress. The LEDAC determines a common legislative agenda which determines the priority legislative agenda of the administration and in part of the department. The Technical Committee on Legislative Matters (TCLM) of the DOLE, on the other hand, is an internal review system that also helps determine the Department’s priority bills.

The Department has set for priority the recommendation of the bills for the 16th Congress, those that address youth unemployment and unemployment in general and improving labor market competitiveness and productivity.

Recommendation No. 9 – IMPROVED

Simplify the present 45 laws regulating 46 professions to relax restrictions on foreign professionals and redefine reciprocity. Most laws regulating professions contain a reciprocity provision. Only five (Environmental Planning, Criminology, Forestry, Pharmacy, and Radio and X-Ray Technology) out of 46 under PRC jurisdiction are restricted to Philippine nationals. A SC rule limits legal practice to Philippine nationals. PRC, consistent with laws regulating professions, issued guidelines in the practice of profession of foreign nationals. Bills regulating the above professions, amending existing laws to include a foreign reciprocity provision, have advanced in Congress. The Environmental Planning bill was approved by Congress and will be transmitted to the president for his signature. The
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bills on Criminology, Forestry, and Pharmacy, which were approved on Third Reading in Congress, are low hanging fruits which Arangkada will recommend for passage at the first regular session of the 16th Congress. Once the Environmental Planning bill becomes law, only Criminology, Forestry, Pharmacy, Radio and X-Ray Technology, and Law will be professions restricted solely to Filipinos. 2012 Progress: Section 7(j) of RA 8981 or the PRC Modernization Act of 200 provides for the issuance of employment permit and special permit to practice profession in the Philippines based on reciprocity.

To this date, there is an absolute ban on the entry of foreign players to at least five (5) regulated professions, namely: criminology, forestry, pharmacy, environmental planning and radio and x-ray technology. Nevertheless, the PRC has been constantly engaged in the review of existing regulatory policies, particularly on the practice of profession by foreign nationals. The number of bills pending in Congress attests to the Commission’s ardent desire to update regulatory laws including the provisions relating to the practice of profession by foreigners, Though admittedly, removal of these restrictions and limitations will entail rigorous legal procedures.

Apart from the review of the regulatory laws on the practice of profession, the Foreign Investment Negative List (FINL) has likewise been the recent subject of scrutiny. While the Joint Foreign Chambers of Commerce is very articulate on the need to remove the “practice of profession” from FINL, the Commission holds that its inclusion is not misleading or incongruent with those items included in the list. As the Commission has consistently pronounced, the 1987 Constitution itself has expressly reserved the practice of profession to Filipino citizens. Corporate practice of profession, whenever allowed by the pertinent professional regulatory law, is likewise limited to Filipino citizens. Thus, inclusion of the same in the FINL finds sufficient bases in policy and law. Nevertheless, with the current trend towards liberalization, with the professional services not being exempt therefrom, the FINL itself will be undergoing major review that will surely have a phenomenal impact on the local labor and employment situation.

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MACROECONOMIC POLICY
Recommendation No. 17 – IMPROVED
Reduce the burden of government regulation on the private sector. Encourage the executive branch and Congress to become “smarter” regulators in their writing and administration of laws, protecting health and safety without slowing economic growth and job creation and avoiding undesirable effects on business costs, competition, and innovation. To balance government regulations and their impact is quite a difficult task, even in the most sophisticated developed economies. For instance, while authorities intend to make the business climate as attractive and least expensive as possible, they also have to deal with immediate fiscal needs, consumer concerns, etc. Furthermore, political interests are too often not congruent with what the economy really requires. Efforts have started at reforming government regulatory excess with the help of business-friendly officials at CSC, DOH, DOT, DTI, NCC, the Food and Drug Administration (FDA), and elsewhere. 2012 Progress: The ILS with the assistance of the Asian Development Bank has organized several technical learning sessions on the Regulatory Impact Assessment (RIA) on Guidelines and Forms which essentially introduced the RIA framework to the concerned DOLE bureaus and attached agencies. The enrolling agencies (BLR and BLE) have been able to submit their Preliminary Impact Assessments and are now finalizing their Regulatory Impact Statements that will be subjected to a public consultation among the concerned stakeholders. The Department is one of the pilot agencies making use of the Regulatory Impact Assessment (RIA) as a means to evaluate policies, whether existing or still being formulated. Two (2) agencies of DOLE have enrolled programs/policies under RIA.

For the Bureau of Labor Relations (BLR), regulatory policies on termination of employment were enrolled. It identified the long process of termination of employment as a hindrance to both employee and employer productivity. A Preliminary Impact Assessment (PIA) is also done to assess possible regulatory options to reduce the issues surrounding termination of employment. The following regulatory options are being considered: (a) Strengthening the Single Entry Approach (SEnA) Program; (b) Extending probationary period from six (6) months to twelve (12) months; and (c) Exploring the possibility of unemployment insurance accounts. The first two regulatory options are now undergoing further studies. For the Bureau of Local Employment (BLE), private recruitment services regulation was enrolled. The policy objective is to review the regulatory framework on employment services and adopt options for streamlining the cost for business and government, and to propose a robust, competitive and effective system for private sector participation in employment services, consistent with the objective of promoting employability and mobility, as well as accessibility and affordability of employment facilitation and intermediation services.
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Recommendation No. 18 – STEADY

Maintain policy predictability and stability. Maintaining policies in a predictable and stable fashion creates a positive climate for investors, who prefer that unpredictable risks are minimized. Some years must pass before this recommendation can be evaluated. A long-term plan and reduced corruption may help minimize the pattern of incoming elected officials undoing the work of their predecessors. 2012 Progress: The Department of Labor and Employment (DOLE), Department of Tourism (DOT) and Department of Finance (DOF) are piloting the institutionalization of a Regulatory Impact Assessment (RIA) system in the Philippine Government through support and funding by the Asian Development Bank (ADB) under the Strengthening Institutions for an Improved Investment Climate program. The RIA system targets the development of regulations in accordance with regulatory best practice principles, and therefore improvement in the quality of new regulations. The RIA system aims to deliver an improved regulatory environment for business that is characterized by:

An improved regulatory environment will lower regulatory compliance costs (red tape), foster more robust competition in the Philippine economy, and provide confidence to the international community (e.g., aid organizations and corporate investors) and the Philippines community (e.g., local businesses and investors) to participate and invest in the necessary economic and social reform of the Philippines. This will benefit the welfare of the Filipino people.

1. More transparency, rigor, accountability and consistency in the development and application of regulations; and 2. A focus on minimizing unnecessary and excessive regulation that diverts time and money away from more productive pursuits.

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EDUCATION
Recommendation No. 3 – IMPROVED
Empower teachers by constantly improving their quality and curriculum; apply competency-based standards for teachers and provide more in-service training, while maintaining welfare and morale. Teacher competence is a major reform area under the Basic Education Sector Reform Agenda ever since 2004. National competency standards are needed to improve the quality of teachers and teaching. The National Competency-Based Teacher Standards have been developed by DepEd with pilot implementation starting with diagnostic surveys undertaken in 2011 to 2012. In-service teacher training continues to be delivered. The third and last tranche of the Third Salary Standardization Law was completed in 2011 with teachers now receiving at least 75% more in basic salaries per year. 2012 Progress: TESDA has developed the Trainer’s Methodology for TVET trainers. The trainers are required to be certified in the program that they are teaching and should also get certification in TVET Trainers Methodology. Moreover, TESDA is also implementing the Competency-Based Curriculum in all its programs. Competency-Based Curriculum specifies the knowledge, skills and attitudes needed to qualify students/trainees to industry performance standards. The curriculum covers the basic, common, and core competencies identified in the competency standards developed through series of consultation and workshops with microfinance experts and adheres to the curriculum development process of TESDA.

Recommendation No. 9 – STEADY

Undertake a vigorous public campaign to emphasize the importance of English competency; encourage television and radio stations to use more English in their programs. At the basic education level, English is an important subject taught from Grade 1 up through end of high school. The official policy of DepEd, however, is not to use English as the medium of instruction for science and mathematics until Grade 4 onwards. This policy is consistent with the United Nations Educational, Scientific and Cultural Organization (UNESCO) research findings that very young children learn best in their mother tongue before taking on a second language. There is widespread public agreement that English proficiency is important. The drop in English quality in the country is in implementation or in the quality of instruction of and in English. This is an area that requires more work and investment, especially at the teacher training stage. Television and radio use more Filipino or local languages as the language medium in terms of programing hours. Where language suffers (both Filipino and English) is when taglish or cod-switching (the mix of local language/dialect and English) is used as in variety shows, leading to a situation where individuals lose the proficiency for either.
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There is no policy or program to use more English in television or radio programming. 2012 Progress: The TESDA Language Skills Institute (LSI) provides training on workplace language skills to workers who will be going abroad. It offers courses on the following: • Arabic Language and Saudi/Gulf Culture • English Proficiency Course • Korean Language and Culture • Mandarin Chinese Language and Culture • Japanese (Nihonggo) Language and Culture • Spanish Language for Different Vocation The LSI is also located in all the regions across the country to provide access to all people requiring language training. The Finishing Course for Call Center Agents (FCCCA) program is a 100-hour course developed to address the skills requirements for the BPO industry. It is designed to develop knowledge, skills, and attitudes of a Contact Center Representative in accordance with industry standards. It covers core competencies such as: Communicate Effectively in a Customer Contact Center and Render Quality Customer Service.

Recommendation No. 11– STEADY

Undertake a vigorous public campaign to emphasize the importance of English competency; encourage television and radio stations to use more English in their programs. True Dual Education/Dual Technical Systems in the country remains a limited arrangement between firms and individual student/trainees. Introduced over two decades ago by German foundations, very few companies subscribe to such a dual tech system because of the cost and the large amount of time spent on training while being employed. Unlike Germany where an apprenticeship culture prevails, Philippine companies see apprenticeships as more properly part of pre-employment internship or On-the-Job Training (OJT). A vocational technical education system for pre-service, however, has been greatly expanded under TESDA. Placement in industry is still a relatively weak part of the system. This is not entirely TESDA’s shortcoming because industry hiring has also been slow (though picking up). The reintroduction of technical vocational education in DepEd has been slow despite a policy statement made in 2011. 2012 Progress: In response to the DOLE Secretary’s instruction on the expansion of the implementation of the apprenticeship program, TESDA has developed a Reformed Apprenticeship Program. The following are the proposed features of the above-mentioned program:
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• • • • • • • • • • •

Apprenticeship Period – this will be determined based on the complexity of the skills to be learned by the apprentice.

Program Consent and Delivery – will emphasize the need for theoretical instruction as provided for in the law by the approval and utilization of a Training Plan Program Registration – can be by cluster of competency or bundled qualification No of apprentices to be hired – up to 50% of existing regular workers in the company. This will enable small enterprises to participate in the program.

Competency Assessment – the administration of competency assessment is compulsory for qualifications with Training Regulations

Training Equivalency – issuance of a Training Certificate by the enterprise is mandatory. The Certificate will be comparable to completion of a training program in a TVET institution. Involved Organizations – It will highlight the convergence approach among DOLE, TESDA and PESO of the LGU in program advocacy and implementation. DOLE and TESDA field offices shall jointly promote the program. Program Advocacy – will have massive advocacy with core messages for target audience like the youth and the enterprises. Incentives to employers – Aside from the tax incentives, TESDA will provide technical assistance in the form of capability building for their trainers and other training staff.

Documentary Requirements – would only require a letter of application and training plan.

Compulsory Apprenticeship – Art. 70(b) of the Labor Code provides that when the national security or particular requirements of economic development so demand, the President of the Republic of the Philippines may require compulsory training of apprentices in certain trades, occupations, jobs or employment levels where shortage of trained manpower is deemed critical as determined by the Secretary of Labor. This provision has never been implemented. TESDA to implement this provision for skills declared critical by the DOLE Secretary.

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Acknowledgements
The DOLE 2012 Progress with reference to the Arangkada 2nd Assessment Report is a collaborative effort of the DOLE Bureas, Offices, Service and Attached Agencies. We would like to acknowledge the following agencies for their contributions in the completion of this progress: DOLE Bureaus Bureau of Labor Relations (BLR) Bureau of Local Employment (BLE) Bureau of Working Conditions (BWC)

DOLE Offices and Service Department Legislative Liaison Office (DLLO) Labor Communications Office (LCO) Planning Service (PS)

DOLE Attached Agencies National Conciliation and Mediation Board (NCMB) National Labor Relations Commission (NLRC) National Wages and Productivity Commission (NWPC) Occupational Safety and Health Center (OSHC) Overseas Workers Welfare Administration (OWWA) Philippine Overseas Employment Administration (POEA) Professional Regulation Commission (PRC) Technical Education and Skills Development Authority (TESDA)

Patrick P. Patriwirawan Jr. Labor and Social Relations Research Division 5F DOLE Bldg. Muralla St. cor. Gen. Luna St. Intramuros 1002 Manila, Philippines. E-mail: lsrrd_ilsdole@yahoo.com Telephone: +63 (2) 527-3523 Fax: +63 (2) 5273491 DOLE 2012 Progress | Arangkada 2nd Assessment

You may refer your questions or comments to:

The Institute for Labor Studies consolidated the contributions from the DOLE bureaus, offices, service and attached agencies.

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