People, Profit, and Politics

People, Profit, and Politics

Glenda Lopez Ma. Glenda S. Lopez Wui eresa Encarnacion Teresa S. Encarnacion Tadem

Published in cooperation with the United Nations Development Programme-Philippine Office Third World Studies Center College of Social Sciences and Philosophy University of the Philippines Diliman, Quezon City

Ma. Glenda S. Lopez Wui is assistant professor at the Faculty of Education, University of the Philippines (UP)-Open University, and formerly university researcher and deputy director of the UP Third World Studies Center (TWSC). Teresa S. Encarnacion Tadem is associate professor at the Department of Political Science, UP Diliman, and director of the UP TWSC. Sharon Quinsaat is university researcher at the UP TWSC. Joel F. Ariate Jr. is university research associate at the UP TWSC. Ronald C. Molmisa is a fellow and formerly university research associate at the UP TWSC. Third World Studies Center College of Social Sciences and Philosophy Palma Hall Basement P.O. Box 210 University of the Philippines Diliman, Quezon City 1101 Philippines Phones: +63 2 981 8500 ext. 2442 Telefax: +63 2 920 5428 Mobile: +63 926 710 2926 Email: uptwsc@ URL: © 2006 by the UP Third World Studies Center All rights reserved. No copies can be made in part or in whole without prior written permission from the publisher. Published 2006 ISBN 971-91246-4-4 The UP Third World Studies Center gratefully acknowledges the financial support given by the United Nations Development Programme-Philippine Office in the research for and publication of this book. Printed in the Philippines by CORASIA Inc.

List of Acronyms Foreword Walden Bello Preface Introduction Teresa S. Encarnacion Tadem Mobilizing against Vegetable Importation Sharon M. Quinsaat Protests and Perceived Threats in the Hog Industry Joel F. Ariate Jr. Confronting the Challenges in the Garment Industry Ma. Glenda S. Lopez Wui Balancing Consumer and Corporate Interests in the Telecommunications Industry Ronald C. Molmisa Conclusion: Palliatives for “Globalization with a Human Face” Teresa S. Encarnacion Tadem Index vii

xv xvii






197 229



People, Profit, and Politics



List of Acronyms
ACEF AFMA AFTA ALERT ALMAGATE ALU-TUCP AoA APEC APIT-TAKO APL ASAP ASEAN BAI BAS BAYAN BFFI BLES BMP BoC BoT BPI CAR Agricultural Competitiveness Enhancement Fund Agriculture and Fisheries Modernization Act ASEAN Free Trade Agreement Alliance of Legislators against Regressive Taxes Alyansa ng Manggagawa sa Garment at Textile (Garment and Textile Workers’ Alliance) Associated Labor Unions of the Trade Union Congress of the Philippines Agreement on Agriculture Asia-Pacific Economic Cooperation Alyansa Dagiti Pesante iti Taeng Kordilyera (Alliance of Peasants in the Cordillera Homeland) Alliance of Progressive Labor Agricultural Sector Alliance of the Philippines Association of Southeast Asian Nations Bureau of Animal Industry Bureau of Agricultural Statistics Bagong Alyansang Makabayan (New Patriotic Movement) Benguet Farmers’ Federation Incorporated Bureau of Labor and Employment Statistics Bukluran ng Manggagawang Pilipino (Philippines Workers Solidarity) Bureau of Customs Bureau of Telecommunications Bureau of Plant Industry Cordillera Administrative Region


People, Profit, and Politics


College Editors Guild of the Philippines Common Effective Preferential Tariff Commission on Information and Communications Technology cellular mobile telephone system Congressional Oversight Committee on Agriculture and Fisheries Modernization Cordillera Peoples Alliance Computer Professionals Union civil-society organizations Clothing and Textile Industry Tripartite Council Connectivity Unlimited Resources Inc. Department of Agriculture Department of Information and Communication Technology Department of Labor and Employment Department of Science and Technology Department of Transportation and Communications Department of Trade and Industry executive order export processing zone expanded value-added tax Federation of Free Workers Free Legal Assistance Group Foundation for Media Alternatives foot-and-mouth disease Fair Trade Alliance Garment, Textile and Allied Industries Labor Council General Agreement on Tariffs and Trade GATT-Uruguay Round gross domestic product global system for mobile communications Garment and Textile Export Board House Resolution International Labor Organization International Mobile Equipment Identity

List of Acronyms



international nongovernment organization Indigenous Peoples Rights Act industrial, scientific and medical Information Technology and Electronic Commerce Council International Textile, Garment and Leather Workers’ Federation International Telecommunication Union Kilusang Magbubukid ng Pilipinas (Peasant Movement of the Philippines) Kilusang Mayo Uno (May First Movement) Kilusan para sa Pambansang Demokrasya (Movement for National Democracy) Livestock Development Council local government unit minimum access volume Multi-Fiber Arrangement most-favored nation Meat and Hog Dealers Association of the Philippines multimedia messaging system margins of preference Medium-Term Philippine Development Plan Municipal Telephone Projects Office National Confederation of Labor National Commission on the Role of Filipino Women National Economic and Development Authority National Federation of Hog Farmers Inc. National Federation of Hog Raisers nongovernment organization National Hog Raisers Group Inc. National Meat Inspection Commission National Statistical Coordination Board National Statistics Office National Telecommunications Commission National Telecommunications Development Committee


People, Profit, and Politics




National Telecommunications Development Plan National Union of Students of the Philippines Philippine Association of Broiler Integrators Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno (Helping Each Other for the Future: You, the Bank, the Industry and the Government) Philippine Association of Hog Raisers Inc. Philippine Association of Meat Processors Inc. Philippine Association of Private Telephone Companies Inc. private business organizations Philippine Commission on Good Government Philippine Cable Television Association Inc. Philippine Chamber of Telecommunication Operators Philippine Electronics and Telecommunications Federation Inc. Philippine Economic Zone Authority Philippine Institute for Development Studies Philippine Internet Services Organization Philippine Long Distance Telephone Company Philippine League for Democratic Telecommunications Inc. Philippine Peasant Institute public switched telephone network public telecommunication entities permit to import Pambansang Ugnayan ng Mamamayan Laban sa Liberalisasyon ng Agrikultura (National Network of Citizens against Agricultural Liberalization) quantitative restriction Republic Act Social Action Center Social Accountability International Service Area Scheme Securities and Exchange Commission

List of Acronyms



Subscriber Identity Module Short Message System Stop the New Round Coalition-Philippines Slaughterhouse Operators Association of the Philippines Social Security System Swine Information Network Telecommunications Office Technical Eduction and Skills Development Authority tariff-related matters Tariff Reform Program Trade Union Congress of the Philippines Telecommunication Users Group of the Philippines United Nations Food and Agriculture Organizations value-added service voice over Internet protocol World Bank Worldwide Responsible Apparel Production World Summit on the Information Society World Trade Organization

Walden Bello

eople, Profit, and Politics is an excellent collection of studies that looks at how civil-society organizations in economic sectors subjected to trade liberalization and deregulation have mobilized to defend their interests within a liberal democratic state. The picture that emerges is both reassuring and disconcerting. Reassuring in that civil-society organizations can easily establish political spaces or beachheads from which to exert pressure on key political actors in the executive or in parliament. Reassuring, too, in that there is a great space for coalition building with many other interest groups facing the challenge of globalization. But disconcerting in that no amount of skilled mobilizing and coalition building appears to have been able to save key groups, such as the Benguet vegetable producers and textile and garment workers, from massive dislocation brought about by cheap imports or capital flight. Active lobbying by hog raisers appear to have mainly bought them time, not eliminate the threat of ruinous competition from cheap imports. The picture of the Philippine state that emerges is one that allows significant space for pressure groups opposed to liberalization, to the point where key actors within both the bureaucracy and parliament can, in fact, be mobilized as allies. And yet, when push comes to shove, liberalization wins out. What emerges is a resilient state that can entertain opposition, but where the ideology of neoliberalism so permeates the bureaucracy and the legislature that it can override the coalitions and coalition formations



People, Profit, and Politics

that the threatened sectors can put together. While there certainly is a domestic pro-liberalization lobby, and the World Trade Organization (WTO) and the International Monetary Fund (IMF) are important pressure groups, it seems to be the case that the adoption of trade liberalization policies owes more to ideological belief among key policymakers and elected officials than to the organized political clout of these actors. Thus what we have, at least in the case of economic policies, is a perfect example of what Gramsci termed “consensus,” in this case, neoliberal consensus, as the driver of policy. What this seems to indicate is that for producers, the key to winning the battle is not a superior organizing capability but drawing up an alternative paradigm that is more convincing than neoliberalism. This will be no easy task. As many have pointed out, the overwhelming empirical evidence after 25 years of accelerated liberalization, both in the Philippines and globally, shows that it has been accompanied by growing poverty, inequality, and stagnation, even as stateled protected systems such as Korea and China have progressed by leaps and bounds. Despite this, neoliberalism remains as entrenched as ever in the higher rungs of the economic bureaucracies of the Philippine state. This is, of course, just one lesson that one draws from the case studies of this book. There are other dimensions of the state-civil society relationship in the Philippines that are illuminated here. The authors and editors are to be congratulated for bringing out an indispensable guide to the topic. Walden Bello Professor of Sociology University of the Philippines Diliman, Quezon City Philippines





he idea for this book was conceived way back in 2003 when the then-director of the Third World Studies Center (TWSC), Miriam Coronel Ferrer, invited the case authors for a brainstorming session to prepare a research proposal on the topic “state-civil society relations in the context of globalization.” The research project would be a fitting followup to the just completed TWSC research on “Philippine Civil Society and the Globalization Discourse” (which was subsequently published as a book), and the Center’s previous researches examining the potential of Philippine civil society as agent of democratization. It was also pointed out in the session that a research on the topic is significant because at that time no study has been conducted yet on the nature of interaction between the state and civil-society actors in an environment shaped by globalization. Existing studies only deal with the broad effects of economic globalization on different sectors of the Philippine economy. The writers decided to focus the study on sectors perceived to be widely affected by globalization: the vegetable, hog, garment, and telecommunications. A research proposal was then submitted to the United Nations Development Programme (UNDP), which agreed to fund the conduct of the research in 2004, and the publication of the output in 2005. This project would not have been possible without the assistance of various individuals and institutions. We like to thank the UNDP for the financial assistance, and its program manager for governance unit, Emmanuel Buendia, for his support of TWSC researches. The Social Sciences and Philosophy Research Foundation (SSPRF) was also on hand to manage the research and publication funds.


People, Profit, and Politics

During the research phase, we like to express our gratitude to a number of individuals who helped us complete this stage of the project. Our thanks go to Virgilio Salentes, secretariat head of UNDP’s Governance Portfolio, whose office approved our research proposal for funding. We are indebted to our project consultants whose comments and criticisms helped sharpen the analyses and overall quality of the case studies. Aside from commenting on the drafts of the cases, they also helped refine some conceptual and methodological aspects of the project, like improving the research questions, interview guide, and selection of respondents. The consultants are: Riza Bernabe for the vegetable industry, Teodoro Mendoza for the hog industry; Rosalinda PinedaOfreneo for the garment industry, and Alan Alegre for the telecommunications industry. Some of the case studies were also shown to the following for additional reviews: William Padojinog, Erwin Alampay, Florian Alburo, and Rowena Boquiren. We were also fortunate to have with us two very reliable research assistants, Zuraida Mae Cabilo and Sarah Jane Domingo, who were always available for us even on short notice despite the demands of their graduate studies. For the publication phase of the project, we like to thank the staff of UNDP’s Project Management Office for facilitating the release of our publication funds. Our thanks go to the reviewers of the book manuscript, Jose Magadia and Cielito Habito, for sharing with us their expertise on Philippine civil society and economy, respectively. They helped clarify crucial points in the manuscript that would have been overlooked if it were not for their comments. We also thank the book’s editorial consultant and supervisor, Laura Samson, and her team (Jocelyn de Jesus, Nestor De Guzman, Veni Ilowa, and Dezh David) for making our manuscript measure up to publication standards. The ever reliable staff of the TWSC—Caring Francisco, Bien Lacsamana, Tess Lubang, and Erning Francisco—were always on hand to assist us in all the stages of the project.



Lastly, we express our heartfelt gratitude to all the respondents of the case studies for taking the time off from their busy schedules to accommodate our requests for interviews and for sending us feedback on the drafts of the case studies. Ma. Glenda S. Lopez Wui Teresa S. Encarnacion Tadem
February 2006

Teresa S. Encarnacion Tadem


his research project on state-civil society relations in the context of globalization analyzes the relations between the Philippine state and selected civil-society actors in the context of globalization. It focuses on four sectors: the Benguet vegetable, hog, garment, and telecommunications industries. These sectors are widely known to have been affected by economic liberalization—negatively in the case of the first three, and positively in the case of the telecommunications industry. The project investigates two interrelated aspects of state-civil society relations: 1) how civil-society actors engage with official state agencies through various formal and informal strategies of dialogue, negotiation, and bargaining; and 2) the extent to which civil-society actors have been able to influence governmental policy making. These concerns come in light of studies showing the importance of the role of a strong and effective civil society as one of the major factors in furthering development and democracy. While this study does not assume that a strong civil society is automatically beneficial to development, it is predicated on the view that civil-society participation and inputs can make a positive contribution to the policy-making process. In the academic literature, for example, it is generally accepted that there is some kind of relationship between economic development and the kinds of participatory democracy signaled by the proactive role of civil society. Some analysts claim that there is a strong association between the


People, Profit, and Politics

two; others assert that they exhibit a positive linear relationship, while still others claim this relationship is indeed causal (see Przeworski et al. 2000 for a comprehensive discussion; Sen 2000; Bensabat-Kleinberg and Clark 2000). These academic claims are also substantiated in the policy statements of major international development agencies. There is a near-universal acceptance by agencies such as the World Bank, the Asian Development Bank, bilateral donors, and the United Nations Development Programme (UNDP) that democratic forms of policy making and civil-society participation are integral to effective decision making. Above all, each of these agencies now subscribes to the notion that stakeholders and beneficiaries should participate in all stages of the policy and project cycle. The UNDP, for example, has long been explicit on this point: it suggests that stakeholder participation and the role of civil society are crucial in shaping the political and governance contexts in which policy is made and implemented (UNDP 1993). The creation, in 2000, of the UNDP Bureau for Resources and Strategic Partnerships to coordinate and nurture UNDP’s working relationships with civil-society organizations, among others, adds institutional weight to the participatory approach. Finally, the UNDP book Partners in Human Development: UNDP and Civil Society Organizations (2003) suggests important ways to operationalize the partnership among the international community, states, and civil society. Beyond these general statements of principle about state-civil society relations and participatory approaches to development and good governance, what is needed is a much more empirically grounded research that can reveal not simply the presence (or absence) of civil-society actors in policy dialogue but precisely how civil-society actors negotiate and bargain to open up greater political and policy space and the substance of the policy outcomes of such engagement. The need, therefore, is for an assessment of state-civil society relations both as a means (the context in which policy is negotiated, shaped, and set) and as an end (the implementation, monitoring, and adaptation of more effective policy). That the Philippines provides the setting for the study, particularly in



looking at the dynamics of state-civil society engagement in a time of democracy, is also significant, even crucial. As pointed out by Cielito Habito (2005)
This is the country that has been acknowledged to have among the most, if not the most, vibrant civil society movements around the globe, and especially within the Asia-Pacific region. It is also a country wherein a relatively wide variety of avenues for civil society engagement with the state have been made available, especially after the overthrow of the Marcos dictatorship with the EDSA People Power Revolution. Thus, a similar study focused on another country probably would not have been [as] rich and substantive.

Habito, however, notes that “this uniqueness in the Philippine situation could also be its handicap in the sense that it may limit the study’s potential audience, as the wide applicability of its observations and findings may be open to question”:
One may argue that the vibrancy of Philippine civil society and the wide variety in modes of state-civil society engagement opportunities present in the country in a way make it a standard to which others may aspire, and a kind of yardstick with which other countries’ situations and experiences may be assessed. (Habito 2005)

Defining Civil Society
Civil society is generally identified with the “private” sphere of the capitalist market, which is to be distinguished from the “public” domain of the state (Colas 2002, 14). It consists of non-state actors and these include the private sector. Civil-society players or organizations (CSOs) are considered part of social movements comprising amorphous and fluid groups in which the bonds are common grievances or conviction, and shared goals for societal and policy change (rather than structures). They connect people with causes through developing communities of interests around shared conditions (Clark 2003, 4). Their relevance is seen in the light of non-state actors as “crucial determinants of state policies, whether domestic or foreign.” Of importance is that the real change is in the breadth


People, Profit, and Politics

of the social interests represented by CSOs, which has witnessed a move toward democratization that is both domestic and international (Uvin 2000, 17-18). CSOs can be categorized. One category of CSO is engaged in voluntary organizing, which is primarily devoted to promoting policy change through public education, direct lobbying, policy research, and so on. Distinction, however, is made between a profit CSO and a nonprofit one. The former includes chambers of commerce and producers’ associations. The latter performs its tasks out of a sense of the general interests, e.g., environmental organizations (Uvin 2000, 12). Nonprofit CSOs are also defined as nongovernment organizations (NGOs), which are considered as key players in social movements
that do grassroots support and advocacy work. They are intermediary organizations in contrast to membership groups with relatively defined social constitutions. They, therefore, do not directly represent the grassroots constituencies they attempt to serve. (Fox and Brown 1998, 21)

Some would consider this a second category of nonprofit CSOs— the voluntary organizations that seek to promote change, also referred to as intermediary organizations or grassroots support organizations (Uvin 2000, 11-12). A subcategory here is the so-called international NGOs (INGOs), which refers to organizations that are located in one or more rich countries and seek to promote social and economic change in Third World countries (Uvin 2000, 12). A third category of nonprofit CSOs is people’s organizations (POs)—NGOs whose members belong to the same community they are serving. They also generally consist of member organizations composed of people seeking to advance their own community interests, e.g., peasant associations (Uvin 2000, 11). What also emerges here is the phenomenon of CSO networks in which there is no single organization or center for decision making and often not even any formal process. In this situation, cooperation is nonhierarchical, informal, and often temporary and issue-specific (Uvin 2000, 12).



Defining Globalization
The other important concern of this research is globalization, which is “the rapidly expanding process through which societies are connecting to each other through markets and new technology” (Grugel 2004, 29-30). Social-movement scholars have pointed out that globalization is not a new phenomenon. While “the world economy had interlocking trade and investment patterns as early as the 19th century,” what distinguishes today’s global economy is its neoliberal character, which structures contemporary transnational content (Ayres 2002, 191). Proponents of neoliberalism argue that there should be no government intervention with market forces for economic growth to occur. This is because the neoliberal economic theory asserts that “the law of free markets is sufficient regulation for an economy seeking to find sustainable income flows and thus distributes revenues to the most needy segments of society” (Peters 2000, 6). The view is that premium must be placed on trade liberalization and the unfettered entry of foreign investments into any country. Second, globalization with its emphasis on a free-market economy and privatization seeks to minimize the role of the state. By doing so, it hopes to put an end to the inefficiency and corruption that has plagued state-dominated economies as epitomized by capitalist authoritarian states as well as socialist authoritarian states. Another tenet of globalization is trade liberalization and the opening up of the economy to foreign investors. Critics, however, have pointed out that such a setup does not create a political opportunity for long-term development. Investors, for example, can easily fly out of the host country when the latter ceases to provide them optimum environment for capital accumulation. Moreover, emphasis on export would give less attention to the development of a domestic mass following for local products. Although the emphasis on export could create more employment for the local workforce because of bigger markets abroad, problems nonetheless arise if importing countries begin to tap other sources offering better-quality goods at lower prices. The other critique concerns the class bias of globalization—that is, against the poor. This is because globalization has intensified economic, social, and political inequalities by


People, Profit, and Politics

privileging the private over the public sphere and by marginalizing the actual, as well as the potential, importance of the commons (Thomas 1997, 6). As noted by its critics, globalization has resulted in the rich countries growing richer and the poor countries becoming poorer; within the country itself, the rich are getting richer and the poor are getting poorer. Such a reality has been a major criticism of the neoliberal development policy whereby “20 years of liberalization of the world economy has not led to the generous trickle-down that they have predicted, either in absolute or in relative terms” (Wilkin 1997, 28). These inequalities are further perpetuated because globalization allows the private sector, e.g., multinational corporations (MNCs), to have unfettered access to the markets of a developing country. Because of this, there is a real likelihood that there will be a contraction of wealth that is heavily skewed in favor of the wealthiest sections of developing countries (Serrano 2001, 9). And lastly, creating a favorable environment for foreign investors is often translated to the repression of workers’ wages. Besides the class bias of globalization, the other issue is concerned with the quality of life that this economic phenomenon is promoting. Critics argue that globalization has brought about a rapid development that threatens the quality of life, and the absence of gender equality despite the growth in the number of working women (Peters 2000). This stage of capitalism is also accused of degrading the environment (Callinicos 2001, 116). It also does not help much that the agents of globalization such as the World Trade Organization (WTO) have accelerated globalization without social control. The perpetuation of undemocratic WTO rules and procedures, which have marginalized the majority of the world’s people who must live with the instability and social degradation (Tabb 2001, 191). Related to this is the critique of the loss of state control of the economy. The market-based solution, for example, is seen in the bigger context of globalization’s integrating a national economy into the world’s globalized free markets. This thus brings about a situation whereby states are left to have very little control of their economies as seen during the Asian financial crisis (Peters 2000).



State-Civil Society Engagement in a Period of Globalization
Taking into consideration the pros and cons of globalization, this research looks into how this economic phenomenon has affected statecivil society engagement in the Philippines. Although there are existing studies on the broad effects of economic globalization on different sectors of the Philippine economy, to date no research has focused on the nature of interaction that takes place between the state and civil-society actors within an environment shaped by globalization. Further, little analysis has been undertaken on the implications of this engagement for development policy outcomes and raising the standards of governance (including transparency, accountability, and responsiveness). The research, therefore, attempts to fill these gaps. A systematic study on how civil-society groups engage the state could yield valuable lessons—both for the civil-society community in its advocacy and for the government in its policy-making responsibilities, and for both state and civil society in their development partnership. This would include the identification of the circumstances under which broader and more effective participation in the decisionmaking process is achieved, as well as when it is not. It would also help to clarify areas for possible reforms, especially in relation to the developmental outcomes arising from economic liberalization in specific sectors. Such an engagement is also defined by the manner in which members of civil society situate themselves. There are NGOs, for example, that are promoters of neoliberalism. That is, they work with “large sums from the World Bank, the US Agency for International Development (USAID), and other international and state funding agencies on a ‘subcontracted’ basis to undermine national comprehensive welfare institutions” (Petras 2003, 141). There are NGOs, however, that are considered reformists as they “receive middle-range funding from private social democratic foundations and progressive local or regional governments to fund ameliorative projects and to correct the excesses of the free market. The reformists try to ‘reform’ the WTO, IMF and World Bank and regulate capital” (Petras 2003, 142). And lastly, there are radical NGOs, which


People, Profit, and Politics

believe that basic structural changes from below, e.g., redistribution of power, property and income, are necessary to achieve sustained development and social justice (Petras 2003, 143). In all these, the interaction between social movements of civil society and the institutions of global governance is still mediated through the structure of the state. The interesting question in this context, therefore, “is not so much if state sovereignty is disappearing in the face of globalization, but rather how is the relationship between state and civil society being shaped internationally under the pressures of globalization” (Colas 2002, 139). Moreover, the engagement is also determined by the manner in which the global process has shaped both domestic and transnational mobilization of civil society. This is because global processes produce similar responses by movements in different contexts by structuring common transnational threats or opportunities. Second, global pressures have also produced similar opportunity structures for collective action in different national contexts (Smith and Johnston 2002, 3). “Transnational actors become more relevant as they organize to address grievances of global character and to take advantage of parallel statelevel organized groups like Amnesty International … [Transnational actors] can readily advance a common political strategy that targets multiple national governments” (Smith and Johnston 2002, 3). Third, cross-national movements have also been identified as due to the diffusion processes whereby there emerge globally defined targets or sources of grievances brought about by the structural affinity among states. A proponent of this is Marco Giugni who points out that transnational diffusion is also a crucial process for explaining common ideologies and tactics across differing national movements (Smith and Johnston 2002, 3). Globalization also brings with it an expanded array of political institutions that create both opportunity and constraints for activity. Not only do global institutions have distinguished effects on activists’ political strategies and opportunities; they also shape the ways that social movement actors relate to each other (Smith and Johnston 2002, 9). A phenomenon



that has also emerged are global civil societies, which operate at the international level. Because of this, “many studies of transnational associations and political contention implicitly or explicitly argue that global processes are creating an expanded web of interdependence among states, thereby nesting national institutions within a broader, global framework of interest and obligations” (Smith and Johnston 2002, 7).
Propositions on Civil Society-State Engagement

In determining the role which civil society would like the state to play in an era of globalization, a number of proposals have been put forward. There are those who argue that governments should not divest themselves wholly of the provision of essential services such as health and education. By maintaining a strong presence in civil society, government can still exercise some influence over the vagaries attendant to a free-market economy (Peters 2000). There is also a need to create conditions for markets that empower the impoverished and in the process respond to local demands. Furthermore, “governments should be encouraged to take a more active role in the regulation of markets as a means of ensuring that those who are most vulnerable to fluctuations in financial markets, particularly those who are living in poverty, can be assured of some means of protection by a state committed to principles of equity, democracy, and sustainability” (Peters 2000, 6-7).
Civil Society and State Engagement and the Specific Sectors

Another dimension introduced by this study in state-civil society relations in a time of globalization is the empirical focus. In highlighting four sectors—the Benguet vegetable, hog, garment, and telecommunications industries—which have been both positively and negatively affected by economic liberalization, the research is predicated on the assumption that some form of state-civil society engagement is both necessary and desirable if the new context for policy making— globalization—is to be “managed” or “governed” in ways that minimize


People, Profit, and Politics

its downside effects and maximize its developmental potential. In the Philippine context, there are built-in mechanisms and venues in the three branches of government (executive, legislative, and judiciary) where civil-society actors can formally engage the state to negotiate policy reforms that address specific concerns. Civil-society groups can engage Congress in the enactment of laws; they can also engage the executive branch in the implementation and enforcement of the laws and the formulation of other programs and policies. They can also appeal to the judiciary for the interpretation of laws and redress of grievances. Likewise, summits, dialogues, and other fora as well as tripartite and multisectoral councils have been made available to civilsociety actors where they can sit and conduct dialogue with state actors. These are all part of the general drive to enhance the transparency of governmental decision making. It is also the case that, beyond these formal channels, much of the quality of state-civil society relations is determined informally through flexible policy networks that are also present in processes of lobbying, bargaining, policy shaping, policy setting, and policy change. The research seeks to understand the precise nature of these formal and informal state-civil society relations along a spectrum of engagement, ranging from inclusion through accommodation to exclusion, and seeks to account for these different modalities. A third dimension of the research examines the specificities of policy outcomes through an analysis of these four sectors. The rationale for choosing them is twofold. First, each of these sectors of the Philippine economy, with the exception of the telecommunications industry, has confronted difficulties in the last few years and these problems are widely attributed to liberalization policies associated with the globalization process. The research establishes whether this understanding is well founded and how it determines the forms and means of intervention civil-society actors utilize in their engagement with the government. Second, the effectiveness of these modes of intervention and how the state responds to the processes of dialogue, negotiation, and bargaining are also assessed to account for substantive policy changes or, alternatively, policy disagreement or policy



Theoretical Perspectives on State-Civil Society Relations

There are three major approaches in viewing and explaining statecivil society relations: liberal-oppositional, liberal-relational, and Marxist-relational (Ku 2002). This research has a bias toward the liberalrelational approach. The liberal-relational approach views civil society “as being necessarily intertwined with the state. Much liberal theory believes that civil society may effectively defend itself against an encroaching government only through legal and political institutions” (Ku 2002, 534-35). If in the liberal-relational approach the state is necessary to ensure the rights of individuals in a civil society and of the civil society itself, the Marxist-relational approach considers the state as a referee among contending egoistic interests in civil society. “In this theory, state intervention is legitimate if it is to remedy injustices and inequalities within civil society, and if it is to protect the universal interest of the people” (Ku 2002, 532). As for the liberal-oppositional approach, it views civil society “as a realm outside and in opposition to the state. Believing that the state is necessarily coercive and oppressive, it favors a highly autonomous civil sphere outside the state. It advocates the self-management of the sphere, through self-help bodies, informal networks and social movements” (Ku 2002, 534). These two approaches have their own explanatory power; however, given the current developments in state-civil society relations in the case studies of the industries covered in the context of globalization mentioned above, the liberal-relational approach is deemed to capture much of the ongoing dynamics in the sectors being studied. This is because in the liberalrelational approach, civil society in this research “exists at the intersection where the various elements of society come together to protect and nurture the individual and where the individual operates to provide those same protections and liberating opportunities for others” (O’Connell 2000, 474). These “various elements” refer to the


People, Profit, and Politics

community; the business sector; the voluntary, nonprofit, independent sector; and even, in part, the government (Hearn 2001, 342).
Theoretical Framework of Political Opportunity Structures

These perspectives, however, may not fully capture state-civil society relations when a new element is introduced: globalization. Will globalization weaken the intertwined relationship of the state and the civil society, and thereby also reduce the democratizing potential of such relation to the detriment of the people who have to suffer the effect of undemocratically crafted socioeconomic policies? Or, is it also possible that economic liberalization, the main economic regime that underpins globalization, will result “in the transfer of economic decision making and power to market forces and social actors, therefore potentially empowering civil society” (Kamrava and O Mora 1998, 896-97)? To examine these questions, the study also draws heavily from the framework of resource mobilization in explaining the emergence of social movements in terms of the capability of movement entrepreneurs to mobilize resources toward the attainment of identified collective objectives. In addressing the questions posed in the research, the theory of political opportunity structure (POS) was used as the framework of the study. The concept of POS is part of the resource mobilization theories conceived to analyze social movements. This theory is based on the assumption that aspects within the political milieu determine the emergence of strategies utilized by civil society in engaging the state as well as the outcomes of the engagement. While previous theories emphasize internal characteristics and resources of movements that could affect mobilization and realization of objectives, the bias of the political opportunity model is toward external factors or conditions; in this case, the broader political system that structures the opportunities for collective action. Succinctly, a social movement’s political environment influences the kind of approach and the result of protest. The POS framework, however, also points to the importance of movements to create and mobilize resources at their disposal to advance



their agenda. Thus, the concept of political opportunity structures is applied in examining how a specific political environment determines the outcome of the actions of civil-society actors in each of these respective sectors of the study and how these actors are also able to take advantage of opportunities that are external to them. Changes in political opportunity structures are also monitored as these may either encourage or discourage social movements, and when or how struggles would lead to actual reforms. Political opportunity structures include the opening up of access to power, shifts in ruling alignments brought about by cleavages within and among elites, and the availability of influential allies (Tarrow 1994). Also, political opportunity structures are not confined to the state. In an environment where the state does not have monopoly of trade policy making and governance, it is likewise imperative to look at intergovernmental and supranational institutions. Furthermore, political opportunity structures, according to Tarrow (1994), are “consistent but not necessarily formal or permanent dimensions of the political environment that provide incentives for people to undertake collective action by affecting their expectations for success or failure” (85). By privileging the structure of political opportunity, the fortunes of movements in terms of mobilization and policy influence can be explained largely by the nature of political institutions within the challenged polity and the movement’s preferences in approach anchored in this environment (Meyer 2003). In simple terms, therefore, the political context, conceptualized broadly, produces opportunities for actions, responsiveness to change, and policy influence. Corollary to this is the idea that movements decide on goals and strategies based on political circumstances instead of organizational dispositions. Therefore, political opportunity structure is largely used to explain three main aspects of social movements: their emergence, preference in tactics or strategies, and the degree to which they achieve their objectives (McAdam, McCarthy, and Zald 1996, 27). Furthermore, in looking into political opportunity structures, Giugni (1998) identifies two salient features central to this model: the system of


People, Profit, and Politics

alliances and oppositions, which movements can use as a political resource for their success, given that they are considered as powerless challengers; and the structure of the state.
The Case Studies

These theoretical perspectives were applied to the four case studies presented. Sharon M. Quinsaat’s case study, “Mobilizing against Vegetable Importation,” looks into the mobilization of the civil society in cooperation with government to end the importation of cheaper vegetables, which has brought about the demise of the already underdeveloped Benguet vegetable industry. It looks into how civil society explored the different channels opened under a democracy to penetrate the hostile policy environment in advocating for reforms to save the industry. A similar situation is also found in Ma. Glenda S. Lopez Wui’s “Confronting the Challenges in the Garment Industry.” Like the vegetable industry, the garment industry also suffers from the adverse effects of cheaper importation of garments. Unlike the vegetable industry, though, it is export-oriented and is not geared toward the domestic market. Furthermore, it enjoyed its heyday as a leading export industry and continues to be one of the major export earners of the country. However, its export earnings are threatened by the expiration of the MultiFiber Arrangement and the removal of the assured quota for its products. Members of the industry, i.e., the garment factory owners and laborers, together with members of civil-society groups have launched an advocacy campaign for policy reforms to prevent the industry from further demise. Joel F. Ariate Jr.’s “Protests and Perceived Threats in the Hog Industry” depicts the hog industry as suffering the same fate of the Benguet vegetable and garment industries with regard to the loss of profit as brought about by cheaper imports. Like the Benguet vegetable industry, it primarily serves the domestic market. Unlike the other two industries, however, the hog industry’s profit continues to increase and has not experienced the bankruptcy of any of its major players. Despite these, however, the hog industry owners are not taking any chances and have launched a series of campaigns and lobbying with regard to policy



reforms to be undertaken by the government to secure their profits. As in the Benguet vegetable and garment industries, however, there are also certain international treaties and agreements that have bound the Philippine state to abide by the entry of cheaper imports. The last case study, “Balancing Consumer and Corporate Interests in the Telecommunications Industry” by Ronald C. Molmisa, highlights a different experience of state-civil society engagement in a period of globalization. This is because the telecommunications industry—unlike the Benguet vegetable, garment, and hog industries—has generally benefited from the liberalization of the industry with the emergence of telecommunication companies as epitomized by the cellphone and Internet phenomena in the country. The bone of contention now lies on the power of the regulatory state to prevent any form of monopoly and to come out with policies that will benefit most the industry players and the consumers.
Data Gathering

For this research, a preliminary review of the literature was undertaken, focusing on conceptualizing globalization, state-civil society relations, and processes of policy transfer. Data and information were taken from document collection of key policy statements, plans of action, and implementation reports. The researchers conducted interviews/focus group discussions (FGDs) with the subject/civil-society organizations being studied; with officials of concerned government institutions/offices and their attached agencies; and with business groups, NGOs, and people’s organizations.

Ayres, Jeffrey. 2002. Transnational political processes and contention against the global economy. In Globalization and Resistance, ed. Jackie Smith and Hank Johnston, 191-205. Lanham: Rowman & Littlefield Publishers, Inc. Bensabat-Kleinberg, Remonda, and Jenine A. Clark, eds. 2000. Economic liberalisation, democratization and civil society in the developing world. London:


People, Profit, and Politics

Palgrave Macmillan. Callinicos, Alex. 2001. Against the third way. Cambridge: Polity Press. Clark, John. 2003. Civil society and transnational action. In Globalizing civic engagement: Civil society and transnational action, ed. John Clark, 1-28. London and Sterlina: Earthscan Publishing Inc. Colas, Alejandro. 2002. International civil society. Cambridge: Polity Press. Fox, Jonathan A., and L. David Brown. 1998. The struggle for accountability: The World Bank, NGOs and grassroots movements. Cambridge and London: The Massachussetts Institute of Technology Press. Giugni, Marco G. 1998. Was it worth the effort? The outcomes and consequences of social movements. Annual Review of Sociology 98: 37193. Grugel, Jean. 2004. State power and transnational activism. In Transnational activism in Asia: Problems of power and democracy, ed. Nicola Piper and Anders Uhlin, 26-42. London and New York: Routledge. Habito, Cielito. 2005. State-civil society relations in the context of globalization: A review. Draft manuscript. UP Third World Studies Center and United Nations Development Programme. Hearn, Jonathan. 2001. Taking liberties: Contesting visions of the civil society project. Critique of Anthropology 21 (4): 339-60. Kamrava, Mehran, and Frank O Mora. 1998. Civil society and democratization in comparative perspective: Latin America and the Middle East. Third World Quarterly 19 (5): 893-916. Ku, Agnes S. 2002. Beyond the paradoxical conception of “civil society without citizenship.” International Sociology 17 (4): 529-48. Meyer, David S. 2003. Political opportunity and nested institutions. Social Movement Studies 2 (1): 17-35. McAdam, Doug, John D. McCarthy, and Mayer Zald, eds. 1996. Comparative perspectives on social movements. Cambridge: Cambridge University Press. O’Connell, Brian. 2000. Civil society: Definitions and descriptions. Nonprofit and Voluntary Sector Quarterly 29 (3): 471-78. Peters, Chris. 2000. An assessment of the ADB’s poverty reduction strategy paper. Freedom from Debt Coalition document. October. Petras, James. 2003. The new development politics: The age of empire building and new social movements. England: Ashgate Publishing Limited. Przeworski, Adam, Michael E. Alvarez, Jose Antonio Cheibub, and Fernando



Limongi. 2000. Democracy and development: Political institutions and wellbeing in the world, 1950-1990. Cambridge: Cambridge University Press. Sen, Amartya. 2000. Development as freedom. Oxford: Oxford University Press. Serrano, Isagani. 2001. Globalization and poverty eradication in Asia and Pacific. Paper presented at the Asia and Pacific Forum on Poverty, Asian Development Bank Headquarters, Manila, February 5-9. Smith, Jackie, and Hank Johnston. 2002. Globalization and resistance: An introduction. In Globalization and Resistance, ed. Jackie Smith and Hank Johnston, 1-10. Lanham: Rowman & Littlefield Publishers, Inc. Tabb, William. 2001. The amoral elephant: Globalization and the struggle for social justice in the twenty-first century. New York: Monthly Review Press. Tarrow, Sidney. 1994. Power in movement: Social movements, collective action, and politics. Cambridge: Cambridge University Press. Thomas, Caroline. 1997. Globalization and the south. In Globalization and the South, ed. Caroline Thomas and Peter Wilkin, 1-17. Thomas: MacMillan Press Ltd. United Nations Development Programme (UNDP). 1993. Human Development Report: People’s Participation. en/default.cfm. ———. 2003. Partners in human development: UNDP and civil society organizations. New York: United Nations Development Programme. Uvin, Peter. 2000. From local organizations to global governance: The role of NGOs in international relation. In Global institutions and local empowerment: Competing theoretical perspectives, ed. Kendall Stiles, 9-29. London: MacMillan Press Ltd. Wilkin, Peter. 1997. New myths for the south: Globalization and conflict between private power and freedom. In Globalization and the South, ed. Caroline Thomas and Peter Wilkin, 18-35. London: MacMillan Press Ltd.


People, Profit, and Politics

Mobilizing against Vegetable Importation
Sharon M. Quinsaat


uided by the theory of comparative advantage, the Philippines liberalized trade in agriculture through the ratification of various international accords such as the General Agreement on Tariffs and Trade-Uruguay Round (GATT-UR) and the Association of Southeast Asian Nations Free Trade Area (AFTA) as a means of spurring growth in the sector through increased productivity and access to foreign markets. However, in a country where agriculture remains economically important,1 in spite of government’s traditional bias against the sector, the opening up of the domestic market to foreign agricultural commodities was regarded as a guaranteed recipe for failure. Central to the opposition to trade liberalization is the removal of quantitative restrictions (QRs) on imports and decrease in tariff rates of imported goods, which facilitate the incursion of cheaper, often subsidized, goods, displacing Filipino farmers’ sizeable share in local markets. Amid protestations against the merits of free trade in agriculture was guarded optimism for the vegetable industry. With its growth potential in exports, vegetables ostensibly offer economic opportunities to Filipino farmers. Economists have championed vegetables to be among the “gainers” from trade liberalization as agricultural production and trade shift from traditional to high-value crops, owing to the country’s favorable climate, which makes it possible to produce different kinds of vegetables all year round.2


People, Profit, and Politics

In 1999, massive importation of government-subsidized Australian and Chinese produce, particularly semitemperate vegetables, placed the province of Benguet in a crisis with long-term consequences. With more than half of the population highly dependent on vegetable farming, the prognosis was that Benguet had a very dismal chance of recovery. The sector was considered to be an unforeseen casualty of agricultural trade liberalization, as it boasts of monopoly of such commodity in the domestic market. To some extent, the unintended but laudable outcome of the crisis was the unprecedented mobilization of civil society and the local government to end the bane of importation, at least for vegetables. The stirrings at the local level became a springboard for more concerted actions at the national level, which some have characterized as “a paradigm shift from victims waiting helplessly for government action to empowered farmers taking the initiative” (Ordoñez 2003). Although civil society elicited only temporary solutions and modest policy reforms from government, the experience of the Benguet vegetable sector presents a unique opportunity to examine the underlying dynamics of a process by which civil society relates to the state in an environment conditioned by globalization. Taking the case of the Benguet vegetable industry from October 2002 to September 2004, this study endeavors to answer the main question: “How is the relationship between the state and civil society in addressing the impact of trade liberalization, a by-product of government’s submission to market forces?” More specifically, the study aims to: 1) examine the factors underlying the mobilization, strategies, and outcomes of civil-society groups in engaging the state, with specific focus on the political environment that facilitated or impeded such causes; 2) assess the extent of the influence of civil-society groups in pressing for government action on the Benguet vegetable crisis; and 3) determine the lessons that such success or failure indicates in terms of the viability of state-civil society engagement in addressing the impact of trade liberalization. This paper argues that despite the opening up of channels for citizen’s participation in government due largely to the democratization

Mobilizing against Vegetable Importation


processes after Martial Law, the neoliberal ideology strongly and faithfully espoused by the Philippine government has created a hostile political environment for civil society advocating reforms in trade policies that are deemed threatening to the full realization of its economic orthodoxy. However, civil society was able to seize important opportunities for mobilization and policy influence: access to channels in the political system, either mandated by law or superficially created by government officials in their attempt to respond to the problem of the industry; presence of influential allies, especially the elite; a politically charged atmosphere owing to the approaching national elections; and persistent and sympathetic media treatment of the problem building an impression of urgency.

Vegetable Contours of the Vegetable Sector in Trade Benguet in the Era of Trade Liberalization
The province of Benguet located in the Cordillera Administrative Region (CAR) has dominated the local production and trade of semitemperate vegetables,3 earning the moniker “Salad Bowl of the Philippines.” Prior to the development of the vegetable industry, however, most of Benguet agriculture was devoted to the production of rice, camote (sweet potato), and gabi (taro) for local consumption. Although the Spaniards introduced the production of cabbage and potato in the mid1800s, farming was limited, small-scale, and household-oriented until the late 1920s. The Americans further developed vegetable production during their colonial rule due largely to the mining boom and growth of logging companies in the area. Two important factors ushered in commercial interest in semitemperate vegetables in Benguet: the presence of Japanese and Chinese nationals who had knowledge of the technology for vegetable farming, and the construction and opening of the Halsema Road, which enabled the growth and expansion of production and trade (Reyes-Boquiren 1989; Lewis 1992). From this time on, the vegetable industry has increasingly become substantially important to the economy of Benguet.4


People, Profit, and Politics

However, the Philippine vegetable industry, in general, has by and large been backward and subsistence-based, suffering for decades from limited and erratic production, low demand, weak infrastructure, and lack of government support. In actuality, there is no explicit government policy regarding the development of vegetable farming. As a matter of fact, vegetable production through the years has been “accorded less attention and support by the government” (Lantican 1998, 52). Vegetables are included under the “high value crops”5 category, wherein the chief policy instruments for its development are the Republic Act (RA) 7900 or the High Value Crops Development Act of 1995 and the Gintong Ani for the High-Value Commercial Crops program of the Department of Agriculture. Vegetable farming in Benguet is capital intensive and at times involves “an elusive interplay of skill, fortitude and luck” (Lewis 1992, 118). First, there are production-related factors which are beyond the control of the farmers. One alarming trend related to low volume of production is the decreasing area planted to vegetables due mainly to declining fertility of the land (owing to long years of use) and soil erosion, and land use and/or crop conversion, such as the shift to planting of ornamental plants (Aquino 2003). Next, in the case of cost of production, farm inputs alone require a substantial amount of capital. Machinery, seeds, and chemicals are often imported.6 Benguet farmers have been importing American, Japanese, and European hybrid seeds since the 1960s, which produce quality cauliflower, broccoli, carrots, potatoes, and cabbages (Cabreza and Caluza 2002). Because of inadequate farm extension and other support services from the government, farmers resort to, and are at the mercy of, abusive informal moneylenders.7 Production forms only half of the farmers’ expenditures. Farmers have to wrestle with high transport costs, which usually take a large share of total costs in postharvest, especially for highland vegetables. Poor farm-tomarket roads, inadequate storage, and inferior market information system result in under- and/or over-supply and spoilage.8 Price fluctuations are also a common problem of farmers, regardless of the type of crop. Due to limited access to reliable market information and a multilayered marketing

Mobilizing against Vegetable Importation


channel, farmers are reliant on traders who dictate the farmgate prices of their produce, which are usually low.9 High costs of packaging their produce, high rental of stalls and stands, low quality of products, limited research and development, lack of modern/appropriate marketing technology and varieties, and weak (or lack of ) producer organizations that could effectively market the vegetables directly to the consumers are also challenges that farmers deal with (Aquino 2003). Adding to these supply-side factors is the declining share of vegetables in household food expenditures.10 Due to its geographic location, the province of Benguet is also vulnerable to natural disasters. In July 2001, one of the worst tropical storms to hit the Philippines—Feria (Utor)—struck Northern Luzon, destroying infrastructure and devastating rice and vegetable farms. Trade was disrupted in Benguet, as the province was temporarily isolated due to landslides and floods, which rendered major routes impassable. The calamity created a shortage in the supply of semitemperate vegetables, inducing traders and retailers to seek alternative sources to meet the demands of the markets and consumers. This opened a Pandora’s box, as what started as an emergency or stopgap scheme developed into a recurrent then finally permanent practice. Not fully recovered from Feria’s rampage, Benguet faced another outpouring—this time, of cheap and high-quality imported vegetables. Since 2001, farmers in Benguet have been articulating that the scourge of cheap imports has become the main threat to their livelihood, if not to their very chance of survival. Indeed, from the last quarter of 2001 to 2002, the farmers of CAR, especially Benguet, suffered, as the country imported about USD 6.4 million (PHP 328.7 million) worth of fresh/ chilled vegetables as compared to USD 5.8 million (PHP 295 million) the previous year, according to figures from the National Statistics Office (NSO). In general, imports grew by 3 percent on volume and 10 percent on value. Notable is the 1,925 percent growth in quantity for carrots, 102 percent for head lettuce, 97 percent for cauliflowers and headed broccoli, and 94 percent for cabbage, from 2001 to 2002; all of which are also produced locally (table 1). Data provided by the NSO and the Philippine


Table 1. Volume (in kilograms) and percentage growth from previous year of selected imported semitemperate vegetables, 1998-2003
1999 2000 2001 2002 2003

Commodity (fresh/chilled)


Total vegetable imports 5,410 27,944 6,178 22,215


Cabbage (in-quota)

Cabbage lettuce (head lettuce)


Celery other than celeriac

Cauliflower and headed broccoli


People, Profit, and Politics

Lettuce 36,530



83,210 (20%) 165,980 (-3%) 1,346,560 (108%) 1,750 (-68%) 270,560 (-56%) 139,640 (-35%) 154,400 (151%)

Seed potato


191,494,671 (32%) 236,930 (4,279%) 118,349 (324%) 18,404 (198%) 7,933 (-64%) 112,301 (-27%) 309,884 (3%) 53,864 (47%) 472,888 (94%) 21,513 0

1,924,244,095 (905%) 1,451 (-99%) 150,983 (28%) 57,175 (211%) 17,410 (119%) 6,725,781 (5,889%) 691,172 (123%) 43,701 (-19%) 1,131,466 (139%)

227,941,098 (-88%) 35,742 (2,363%) 84,917 (-44%) 31,956 (-44%) 24,105 (38%) 309,590 (-95%) 369,197 (-47%) 78,894 (81%) 756,483 (-33%)

180,256,455 (-21%) 69,422 (94%) 171,186 (102%) 646,966 (1,925%) 5,511 (-77%) 609,724 (97%) 215,393 (-42%) 61,586 (-22%) 1,169,954 (55%)

Potato, other than seed potato (in-quota)


285,911 (1,229%) 0

609,084 (113%) 0

1,514,195 (149%) 0

812,897 (-46%) 1,118,186

Source: Bureau of Agricultural Statistics (BAS).

Mobilizing against Vegetable Importation


Table 2. Annual average farmgate price of selected vegetables in Benguet, 1998-2003
Commodity Cabbage Carrots Cauliflower White potato 1998 15.17 18.13 – 14.7 1999 10.63 17.28 – 16.1 2000 7.71 16.26 32.49 12.69 2001 4.78 10.87 13.9 15.44 2002 7.9 10.46 20.66 11.33 2003 8.39 17.42 21.56 13

Source: Bureau of Agricultural Statistics.

Institute for Development Studies (PIDS) show a 152 percent increase in the average volume of imported fresh vegetables from 40,419 metric tons in 1991-1994 to 101,659 metric tons in 1995-2001.11 The entry of cheap imported vegetables caused the province of Benguet to incur heavy losses with an estimate of PHP 2 billion in failed transactions between July and August 2002 alone (Requejo 2002). In a study conducted by Tagarino and Siano (2003), about 80 percent of 608 farmers in Benguet and Mountain Province ascribe their losses to imported vegetables. The most conspicuous outcome of the flood of imports was depressed farmgate price (table 2). Being a major market of cheap vegetable imports, Manila may serve as a benchmark in the pricing system. With a highly layered marketing system dominated by monopoly traders, prices of cheap imports may be used as leverage to further depress farmgate prices (Morilla 2003). Most farmers have been inclined to sell their cash crops at a loss to Metro Manila markets to cope with the crisis.12 Price alone, however, does not capture the effects of cheap vegetable imports. Equally important are the often-overlooked impact on the psyche and morale of farmers, and on family and community relations. Eightyeight percent of the respondents have registered extreme discouragement to continue vegetable farming (Tagarino and Siano 2003) and acknowledged the exigency of engaging the state.


People, Profit, and Politics

Key Elements Affecting State-Civil Society Relations
In the policy process, civil society, particularly stakeholders, engages the state or vice versa in setting the agenda, influencing the formulation and adoption of a policy, and monitoring and assessing the implementation of policy in terms of achieving its objectives. However, there are certain factors that may impinge on the likelihood of this interaction, courses of action, and purported outcomes, specifically in terms of policy reforms. For this particular case study, these are divergences among the parties involved at the rudimentary level of problem identification and interpretation, intricacies of the policy in question, and a mixture of civil society players with disparate tactics and interests.
Pinpointing the Problem: Variances in Analysis

Recognition and understanding of the problem is a critical first step in state-civil society engagement. It identifies who should be engaged and what the prospects and setbacks are and determines the effectiveness of the techniques to be employed. Likewise, it delineates the parameters for interaction, offers a clear-cut focus, and sets the elements of a strategy. With regard to the Benguet vegetable industry, there were three predominant interpretations of the situation, mainly centering on the causes of its ailing performance in the domestic market: smuggling, tariff reduction, and absence of safety nets. Those who saw the problem as a result of aggressive reduction of tariff rates were polarized into those who considered this policy as directed by the World Trade Organization (WTO) and those who thought that it was a unilateral action by the government. Smuggling: The proverbial culprit Since majority of the total volume of fresh/chilled imports originated from China (Macabasco 2003), a country still in the process of acceding to the WTO in 2001 at the same time forging a free trade agreement with member-states of the Association of Southeast Asian Nations (ASEAN), smuggling was easily identified as the nemesis. However, the relationship between agricultural trade liberalization and smuggling is incongruous.

Mobilizing against Vegetable Importation


When a commodity is protected with high tariffs and quota restrictions, the importation of such becomes costly, making smuggling an economical recourse; thus the belief that the old problem of smuggling is not, in any way, a function of free trade. Furthermore, unlike importation, which is authorized through government laws and policies, smuggling is a criminal offense, often linked to poor enforcement of customs regulations and corrupt practices of government officials.13 There are two kinds of smuggling: outright, which does not require documentation such as import permits; and technical, which takes place through undervaluation, underdeclaration of the volume shipped, misclassification, and diversion of cargo (Francia 2004). Technical smuggling is the main way in which goods are brought into the country. But it cannot exist without the collusion of unscrupulous traders and corrupt government personnel and officials (Bacalla 2004). This was often the case for vegetables. Smuggled vegetables pose a much bigger threat than legally imported produce as they imperil not only the source of income of farmers, but the health of consumers as well.14 Stakeholders in Benguet, particularly traders and farmers, widely believed that smuggling was their biggest enemy. As a result, the different line agencies directly involved in importation procedures were the identified venues of engagement: the Bureau of Plant Industry (BPI), mandated to enforce the Plant Quarantine Law through the issuance of import permits on plants and small animals likely to become pests, and the inspection and treatment of imported agricultural commodities among others; and the Bureau of Customs (BoC), the principal institution tasked to enforce tariff and customs laws. To some groups, however, smuggling was a flawed analysis, thereby targeting the wrong agencies. The Alyansa Dagiti Pesante iti Taeng Kordilyera (Alliance of Peasants in the Cordillera Homeland [APIT TAKO]), a sectoral organization of the Cordillera Peoples Alliance (CPA), has referred to smuggling as a smoke screen of a much larger issue which the government does not intend to confront head-on (Bagyan and Gimenez 2004). By shifting the blame on smuggling


People, Profit, and Politics

instead of legal importation, the problem is relegated to the level of policy implementation rather than policymaking. This becomes problematic because the tragedy experienced by the Benguet vegetable industry now becomes a symptom of the Philippines’ perpetual development problem, graft and corruption, instead of its economic ideology, neoliberalism. Tariff reduction: Diktat of the WTO In line with market access commitments under the Agreement on Agriculture (AoA) of the GATT, the Philippines has agreed to remove import quotas and other QRs and to replace these with corresponding tariff rates, which will be reduced at a predetermined schedule.15 This is codified in RA 8178 or the Agricultural Tarrification Act of 1995.16 The initial bound tariffs for most of sensitive agricultural products fall within 50 to 100 percent in 1995 and 1996. These rates are then reduced to 10 to 50 percent by 2003 and 2004. For vegetables, the Philippines offered to bind tariff at 40 percent. Hence, the influx of imported vegetables was just the most recent repercussion of unbridled trade liberalization, under the directive of the WTO to scale down tariffs of various agricultural commodities through modification of the Most Favored Nation (MFN)17 tariff rates. Expedients in the form of safety nets and executive orders that temporarily increase tariffs are futile. Because of government’s accession to a rules-based trading organization, tariffs will eventually be scaled down no matter what (Bagyan and Gimenez 2004; Gobrin 2004). Since vegetable importation is a direct outcome of policy, then the most fitting and constructive tactic is to petition for the restoration of quantitative restrictions through legislation. The legislative branch, therefore, not the executive, is the venue for engagement, for the reason that the Congress has the exclusive rights on tax-related matters, as stipulated in the Philippine Constitution. But a comprehensive reinstatement of quantitative import restrictions would be impossible without a repeal of RA 8178, which in effect means withdrawal of membership from the WTO.

Mobilizing against Vegetable Importation


Tariff reduction: Solo act As opposed to the analysis that the vegetable crisis was WTO’s sole responsibility, some civil-society groups have continuously asserted that the Philippine government prefers to set and apply a much lower tariff rate independently (table 3). A 40-percent tariff on vegetables does not breach commitments on tariff schedules presented to the multilateral trade body. However, the Philippines has been unilaterally reducing tariffs on agricultural products, arguing that such move is only an act of compliance to the WTO. In effect, the WTO has become the government’s scapegoat for its own faults and inaction. The government’s rhetoric that it has been completely emasculated by the trade body is a myth (Villanueva 2004). What it fails to publicly disclose is the fact that the country’s economic managers promote tariff reduction, not because they abide by the rules and procedures of the WTO for threat of retribution, but because they themselves are steadfast in their belief that this would spur economic growth. A review of major episodes of trade policy reform in the Philippines strengthens this assertion. Each administration has its legacy of unilateral trade liberalization, commencing with Marcos’s Tariff Reform Program (TRP) I, an integral component of the structural adjustment loan program extended by the World Bank in the early 1980s, which reduced the level and dispersion of tariff rates from a range of zero to 100 percent in 1980 to a range of 10 to 50 percent, and removed the quantitative restrictions beginning in 1981 and ending in 1985. This became the antecedent of subsequent policies and programs—Aquino’s TRP II, which decreased the tariff range to within a 3 to 30 percent tariff range by 1995; TRP III, which was the first major step by the Ramos government in adopting a uniform 5 percent tariff by 2005 based on the liberalization targets of the 1993-1998 Medium Term Philippine Development Plan; and TRP IV during the Estrada administration, which adjusted the tariff structure toward a standardized tariff rate of 5 percent by the year 2004, except for a few sensitive agricultural and manufactured items. For her part, President Gloria Macapagal Arroyo issued in 2003 Executive Orders 241 and 246, respectively, to modify the tariff structure such that the tariff rates on


Table 3. MFN tariff rates of selected imported vegetables, 1995-2003, under GATT-UR
1995a 2000 2002 2005 1999b 2001c 2003ad 2003be 2004f


Potato 40 45 60 45 60 45 60 40 50 35 40 40 40 40 40

People, Profit, and Politics

In-quota Out-quota Cabbage In-quota Out-quota Cabbage lettuce (head lettuce) Carrot Cauliflower and headed broccoli Witloof chicory Turnip Peas Beans Asparagus Celery 40 100 40 40 40 40 40 40 40 40 40 60 10 10 10 3 10 10 10 10 10 10 7 7 50 7 7 7 3 7 7 7 7 7 40 7 7 7 3 7 7 7 7 7 25 25 25 20 20 20 20 20 10 40 15 10 30 60 15 15 15 10 15 15 15 15 15 30 60 10 10 10 7 10 10 10 10 10 25 40 25 20 20 20 20 10

25 40 25 20 20 20 20 10 10


Source: Tariff Commission of the Philippines. a 1995 – commitments/bound tariffs submitted to the WTO b 1999-2000 – Executive Order (EO) 313 (March 29, 1996) and EO 486 (June 11, 1998) of Ramos c 2001-2002 – EO 334 (January 3, 2001) of Estrada d 2003a – EO 164 (January 10, 2003) of Arroyo e 2003b – EO 197 (April 16, 2003) of Arroyo f 2004-2005 – EO 264 (December 30, 2003) of Arroyo

Mobilizing against Vegetable Importation


products that are not locally produced are as low as possible while the tariff rates on products that are locally produced are adjusted upward (see Aldaba 2005). Given this analysis, the strategy is to pressure the executive to increase tariff rates as a short-term response, while maximizing the potentials of Congress in advocating for policies and laws intended to protect small farmers from the onslaught of further trade liberalization, such as safety nets, coupled with a recalibration of the tariff program for agriculture. Safety nets: The missing link If programs and projects to offset the adverse effects of trade liberalization were implemented in the first place, then the vegetable crisis should have been avoided. This was the sentiment of majority of civilsociety groups and even local officials in Benguet. Within the WTO, member-states can institute safety nets to cushion the blow of the AoA: increase in tariffs up to the bound rates; imposition of safeguards against unfair trade, if the situation so warrants; and delivery of competitive enhancement measures to make local agriculture become more efficient. The Philippine state is replete with protective instruments against unjust foreign competition and trade practices, as three important measures were legislated, albeit at a snail’s pace, in light of the country’s membership in the WTO: the Countervailing Act of 1999 (RA 8751), which strengthens the procedures for the enforcement of countervailing duties on imported subsidized products; the Anti-Dumping Act of 1999 (RA 8752), which provides the rules for the imposition of a duty for products entering the country at an export price less than their normal value in the ordinary course of trade; and the Safeguard Measures Act of 2000 (RA 8800), wherein government can levy a higher tariff on imports of agricultural commodities once they violate a certain volume of price, protecting local farmers growing the same products. In connection with transforming the vegetable industry in order to compete with the onslaught of imports and maintain its foothold in the domestic market, government is also obliged to provide the necessary


People, Profit, and Politics

support, such as the Agricultural Competitiveness Enhancement Fund (ACEF) stipulated under RA 8178—a trust out of the proceeds of the minimum access volume (MAV)18 importations intended for farmers/ fisherfolks and agribusiness enterprises. However, although many see the ACEF as a potential solution, it is actually ridden with loopholes and bureaucratic impediments. What is paradoxical is the fact that ACEF draws its funding from in-quota tariff revenues earned via the importation of MAVs, necessitating further importation to sustain it. In addition, to access the funds, farmers’ organizations must meet stringent requirements, contradicting ACEF’s objective of protecting vulnerable and marginalized producers (Aquino 1998). In spite of the imperfection of policies on safety nets, lobbying for the provision of such is still indispensable. These analyses of the difficulties faced by the Benguet vegetable sector under agricultural trade liberalization have led to civil society’s threepronged strategy in its engagement with the state: 1) pushing for investigation of smuggling activities, with the main goal of identifying and meting out punishment to all the actors involved, especially government officials; 2) petitioning for the increase of tariffs of vegetables up to the GATT-consistent bound rate of 40 percent; and 3) lobbying for the competitiveness enhancement of the Benguet vegetable industry, not only through easy access to ACEF, but also through the provision of the longoverdue assistance in production, post-production, and marketing aspects.
Complex and Unpopular Policy Terrain

There are unique features of the trade policy environment that have provided civil society, in the past and at present, challenges in advancing its advocacies through engagement with the state, especially in relation to the institution of protective mechanisms for vulnerable and weak sectors. To begin with, the predominance of the neoliberal ideology among crucial policymakers is a powerful obstacle to the acceptance of an alternative framework for trade and industrial policy. This tenet is not only tenaciously adhered to but also nurtured by like-minded academic experts, think-tanks

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and consultancy firms working closely with government. As such, the program of liberalization, privatization, and deregulation was indoctrinated and carried out with much fervor, especially during the Ramos administration, when neoliberalism came into fashion and reached a critical mass “not as a result of an intellectual coup but of a gradual takeover of the strategic heights of the technocracy by these free market-oriented policy makers coming from the academe, government, and business” (Bello et al. 2004, 92). As a spawn of doctrinaire economics, trade by design is a policy domain where only a handful of actors have monopoly in decision making, mostly technocrats appointed by a president who seeks legitimacy and consolidated power of his or her economic doctrine. While some interest groups are able to permeate the arena, these are mostly the privileged and powerful, such as the landlord-controlled sugar industry lobbyists. Moreover, the transnational character of economic policy making has created a state of affairs where the Philippine government is more accountable to the institutions of global governance, such as the World Bank, the International Monetary Fund, and the WTO, along with the states that exercise hegemony within and over these establishments, than to its citizens. Relationships with these players in the global trade regime are bestowed with so much importance, either by intention or by sheer mendicancy of the government, such that responsibility to its public is often compromised. On another aspect, but equally important to civil-society actors, despite the uproar that trade liberalization has created from the structural adjustment programs in the 1980s to the WTO accession in the 1990s, public knowledge and appreciation of trade-related issues is extremely low. Compared to other economic issues, such as tax and foreign debt, trade lacks the popularity that could propel it to the public agenda, and hopefully, the media, government, and electoral agenda. Therefore, civil society has to contend with the difficult task of educating the public on the intricacies of trade, in an attempt to widen the debate, as well as gain the necessary support for its advocacies.


People, Profit, and Politics

Blurring of Civil Society

It is important to note that with the advent of globalization, some obscurities on who civil society is have surfaced. This is particularly relevant in the case of the Benguet vegetable sector. As the negative impact of trade liberalization began and continues to take its toll on the agricultural sector, multisectoral formations confronting these issues have mushroomed. Campaign coalitions, which are generally initiated by civil society in its strictest sense, have expanded to include even interest groups and industry stakeholders like businessmen and traders. This phenomenon can be explained by the fact that trade liberalization is jeopardizing the existence of local industries, which means all players—from producers to business owners—are put at risk (Frago, Quinsaat, and Viajar 2004). Hence, in examining how civil-society actors engaged the state in responding to the problems besetting the Benguet vegetable sector in the context of trade liberalization, it is useful to classify who were involved in the issue (table 4). Civil society in this study consisted of: 1) those who were directly affected by the problem and may entirely benefit or suffer from the outcomes of the engagement in terms of policy response—the stakeholders (farmers’/peasant organizations and traders groups), and 2) those who claimed to speak in behalf of the affected sectors and took on supportive roles in the advocacy effort (political blocs, nongovernment organizations [NGOs], coalitions, and the church). In this case, civil society comprised advocates for the producers. It is also crucial to emphasize that some civil-society groups, especially those that are nonstakeholders, are not inclined to take on commodityspecific engagement of the state. Instead, they tackle issues concerning agricultural trade liberalization or even the Philippine economic framework in its entirety; thus, on some occasions, these groups are actually advocating for policy reforms that would benefit the whole industry, and not exclusively the vegetable sector. Actually, these groups have been involved in the longstanding movement against trade liberalization in the Philippines. For instance, the Philippine Peasant Institute (PPI) was at the forefront of the campaign to defer ratification of the GATT-UR, through the alliance Pabi-

Mobilizing against Vegetable Importation


Table 4. Civil-society actors involved in the issues of the Benguet vegetable industry
Type of civil-society group Stakeholders Organization Farmers’/Peasant Organizations Benguet Farmers Federation Inc. Alyansa Dagiti Pesante iti Taeng Kordilyera

Traders’ Organizations Benguet Vegetables Distributors’ Cooperative, Inc. Early Bird Traders’ Association La Trinidad Vegetable Trading Post Association Bagsakan Traders’ Association La Trinidad Booth Holders Association Political blocs Akbayan Bayan Muna Kilusan Para sa Pambansang Demokrasya Philippine Peasant Institute Alyansa Agrikultura Fair Trade Alliance Stop the New Round Coalition Social Action Center

NGO Multisectoral coalitions


GATT,19 in 1994. Later on, some of the forerunners of Pabi-GATT founded the Stop the New Round Coalition-Philippines (SNR).20 On the other hand, political blocs like Bayan Muna (People First) and Kilusan para sa Pambansang Demokrasya (Movement for National Democracy [KPD]) have linked the opposition to trade liberalization to contemporary anticapitalist struggles. Concomitantly, these groups have had a history of government interaction, which has transformed over the years from antagonistic to critical collaboration to as far as entry into the mainstream arena of Philippine policymaking. Hence, they have tested the bounds of engagement and have built working relations with official state agencies and individuals.


People, Profit, and Politics

The Engagement Process
Maximizing the Local Gateway

With revenues coming in trickles and the La Trinidad Trading Post at a standstill, the local government realized that it could not afford to languish and wait for national government to take action. The situation prompted local officials to take action and signaled an opportunity for farmers, traders, and other civil-society actors to engage the local government. Local officials are themselves farmers and traders or are engaged in agricultural production and trade with their family, kinship, network ties, and patron-client bonds; thus foreshadowing at least responsiveness of the public servants to the demands of their social relations. A partnership was immediately forged among the three stakeholders—local government, traders, and farmers— to investigate and curb the prevalence of importation in Metro Manila, and to formulate a comprehensive development blueprint for the local vegetable industry to guarantee its competitiveness in the domestic market and shield it from import surges. At the outset, since most of the information presented by the media revealed dubious import permits and extremely low price of imported vegetables, smuggling was quickly identified as the cause. In July 2002, the La Trinidad Anti-Smuggling Task Force was created through an administrative order issued by the municipal government. Actions of the task force revolved around monitoring and research of smuggling activities in Metro Manila and crafting of policy proposals, which were mainly directed to national state agencies with the endorsement of the local government officials. Since the nature of their work entailed constant interaction with retailers and knowledge of the market situation, the traders, led by the Benguet Vegetables Distributors’ Cooperative, took the driver’s seat and steered the anti-smuggling drive (Fongwan 2004; Kim 2004). However, the provincial government through the leadership of Governor Raul Molintas, a self-proclaimed anti-GATT advocate, and Board Member Johnny Uy, chairman of the Provincial Board Committee of Agriculture, recognized from the start that smuggling was just the tip of

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the iceberg. The Provincial Board created the Benguet Vegetable Commission in early 2003, tasked primarily to study the impact of importation and recommend remedies by which the provincial government could endorse policies and other alternative courses of action. In light of the country’s looming full implementation of the GATT by 2005, the commission would also identify development-related projects to enhance the status of the local vegetable industry (Molintas 2004; Uy 2004; Sales 2003b). However, the commission was an interagency project, with no seat allotted for NGOs. In the process, the provincial government also initiated the establishment of the Benguet Farmers’ Federation Inc. (BFFI). The BFFI, the tangible outcome of the National Vegetable Summit in 2003, was composed of 80,000 farmers from the thirteen towns of Benguet (Sales 2003c). The main objective for organizing was to address problems at the production level. To collectively deal with importation was merely secondary (Andiso 2004). Since its formation, the federation has been working closely with the provincial government, earning representation in the Benguet Vegetable Council, which replaced the old Benguet Vegetable Commission following its expiration at the end of 2003. Through the Council, the BFFI became party to a development plan of the vegetable industry in Benguet, and strengthened its partnership with the Department of Agriculture (DA)–Regional Field Unit–Cordillera Administrative Region in crop programming and with the Department of Trade and Industry (DTI) Baguio-Benguet in its market-matching projects (Usman 2004; Santiago 2004). The debilitating impact of vegetable imports in Benguet also prompted other civil-society groups in the area to strategize. For their part, they were also caught up with the vegetable crisis primarily because the industry is part of their larger campaign against agricultural trade liberalization. A federation of peasant political organizations originally focused on defense of resources and land reform, APIT-TAKO dealt with the issue of vegetable importation in 2002, when the crisis was at its peak. The group admitted that a key constraint to its involvement in the issue was the absence of organization of its constituents—the vegetable farmers. Although


People, Profit, and Politics

organizations instrumental to the foundation of the APIT-TAKO have been organizing farmers at the barangay (local village), municipal, and provincial levels since the early 1980s, most of these were not sustained. In addition, a large number of farmers’ cooperatives in Benguet, particularly in the vegetable-producing towns of Atok, Buguias, and La Trinidad, were established mainly to access loans and credits (Bagyan and Gimenez 2004; Cosalan, Tobias, and Yano 2004). As a result, the group undertook parallel organizing, building new peasant communities and politically reorienting existing cooperatives. APIT-TAKO conducted massive education campaign on the impact of trade liberalization particularly in the two most affected provinces— Benguet and Mountain Province. In May 2003, APIT-TAKO organized the Cordillera chapter of the Pambansang Ugnayan ng Mamamayan Laban sa Liberalisasyon ng Agrikultura (National Network of Citizens Against Agricultural Liberalization [PUMALAG]), and launched a petition in the Cordillera region urging Congress to rescind RA 8178. In all its actions, APIT-TAKO forged a working relationship with the local government. However, cooperation was limited to the issue of legal importation and to select officials, namely Uy, the only Benguet politician who was a founding member of PUMALAG, and La Trinidad Councilors John Kim and Wasing Sacla. The group singled out the three officials because of their unwavering stand against trade liberalization, often publicly disclosed. Although consultations were mostly initiated by APIT-TAKO, they were very productive in terms of arriving at a negotiated position. For example, on APIT-TAKO’s proposal to lobby for the repeal of RA 8178, the officials found this to some extent excessive, especially since they were still concentrating their energies on pressing the national government for safety nets. But with sustained dialogue, both parties agreed to advocate for increase in tariff rates of vegetables. Meanwhile, guided by the theology of liberation, the Vicariate of Baguio-Benguet through the Social Action Center (SAC) also took a proactive stance in its involvement in agricultural issues. SAC’s treatment

Mobilizing against Vegetable Importation


of the vegetable crisis and globalization was within the indigenous peoples’ framework, arguing that Benguet farmers should not be regarded as ordinary peasants but as indigenous peoples. The issue then boils down to the question of land. Essentially, SAC is not concerned about the incursion of imported vegetables in the country. Rather, it is alarmed by the policies and programs that the government has fashioned to mitigate its impact on and enhance the competitiveness of the industry—agricultural modernization through the Agriculture and Fisheries Modernization Act (AFMA). Specifically, SAC is opposed to crop programming or zoning being introduced to vegetable farmers to sustain the supply and meet the high-quality standards of the consumers, the principal deficiency being leveled against vegetable farmers.21 Through the basic ecclesial communities, SAC also organized their own farmers’ groups; educated them on GATT, AFMA, and the Indigenous Peoples Rights Act (IPRA); and built their capacity to engage government at the grassroots level. After which, a farmers’ congress was held where recommendations were put forward, targeting the only branch of government where laws such as GATT can be revoked, where policies such as IPRA, albeit inadequate, can be strengthened, and where new legislative measures can be introduced to protect farmers as indigenous peoples—the Philippine Congress. On the other hand, SAC and the farmers’ groups realize that the local officials, through the Provincial Board, can also enact policies for the benefit of the farmers. But most of their engagement with the local government and the line agencies in the province was to support and expedite the awarding of Certificate of Ancestral Domain Titles and Certificate of Ancestral Land Titles, in view of the DA’s move toward crop programming. Ultimately, though, civil society understood the limited capacity of the local government to respond to the problems of the vegetable industry. Local governments are also victims of the systemic adoption of the neoliberal ideology. Their hands are also tied to the whims of the national government (Cosalan, Tobias, and Yano 2004). The bottom line, therefore, was to elevate the issue and engagement to the national level.


People, Profit, and Politics

Struggling for Space at the National Level

Realizing that technical expertise and public support, besides political influence, were crucial to engage the national government, the farmers, traders, and local officials of Benguet elicited the assistance of the Fair Trade Alliance (FTA),22 through its convenor, former senator Wigberto Tañada, and the Kilusang Magbubukid ng Pilipinas (Peasant Movement of the Philippines [KMP]), through its chairperson, Rafael Mariano (Molintas 2004; Uy 2004). FTA was instrumental in the preparation of position papers, particularly on the trigger price23 for vegetables. The alliance also facilitated its participation in consultations with various agencies and institutions. On the other hand, KMP pledged support for rallies and demonstrations. To strengthen their advocacy for the industry, the farmers and traders also undertook parallel networking, cultivated strong partnership with political blocs like Akbayan and Bayan Muna and NGOs such as PPI, and formalized membership in coalitions like the FTA and Alyansa Agrikultura (Agriculture Alliance). But in most of the engagement at the national level, it was a collaboration between the local government and the other stakeholders—traders and farmers—with national civil society playing a more supportive rather than leadership role. Engagement with different agencies was synchronized and concerted, with the end view of extracting the most response from the national government. Department of Agriculture Interaction with the DA was based on three lobbying points: 1) investigation of permits to import (PTI) issued by the Bureau of Plant Industry (BPI), 2) increase in tariff rates of imported vegetables, and 3) provision of safety nets for the industry. But the course of their engagement traversed three leaderships, each offering them different opportunities and priorities for action. In October 2002, at the height of importation, Agriculture Secretary Leonardo Montemayor ordered the immediate implementation of RA 8800, which intends to protect local agricultural products against import surges in view of the reported entry of vegetables from foreign sources,

Mobilizing against Vegetable Importation


and at the same time actively support the initiatives of the local vegetable industry led by the Benguet vegetable industry stakeholders (DA 2002). Montemayor, known for his knowledge and understanding of the concerns of small farmers as a former peasant representative in Congress, was immediately identified as a possible ally in the bureaucracy. However, later that year, Luis Lorenzo took over the post. The change in leadership at the height of importation dampened the spirits of civil society. The farmers had reservations in engaging an agribusiness magnate. In an attempt to appease the disgruntled, Lorenzo pledged to focus on core programs in favor of small farmers and fisherfolk. He immediately conducted consultations with vegetable farmers and officials from Benguet regarding DA’s proposal to the Tariff Commission to apply the maximum bound rate of 40 percent to vegetable imports and to include twenty vegetable products under the sensitive list of commodities (Mendoza 2004). In addition, under his administration, the DA expedited the Benguet Cold Chain Project, expected to address postharvest losses and the quality of Benguet vegetables. However, in July 2004, Lorenzo resigned and was replaced by Arthur Yap, a move that anti-smuggling groups found adverse due to Yap’s suspected involvement in technical smuggling (Mendoza 2004). Yap’s reputation preceded him and this became a major deterrent for civil society’s engagement with the DA. Although civil society found Montemayor and Lorenzo sympathetic to their concerns and recommendations, they saw a staunch supporter through Undersecretary Ernesto Ordoñez due to his instantaneous response to the problem of importation (Alangdeo 2004; Kim 2004). Ordoñez was active in bridging the gap between the agency and civil society. His initial approach, however, was to engage in battle through the media (Fongwan 2004). In any case, Ordoñez became their key person in influencing decisions in the DA. The BPI, in contrast, was very different. Civil society was at odds with its head, Blo Umpar Adiong, from the start. Adiong had been blamed for the unabated importation of vegetables, due to a series of defective import clearances that were unearthed by the traders. But what aggravated Adiong’s


People, Profit, and Politics

unfavorable position was his alleged defiance of the president’s oral moratorium on the issuance of import permits to save the Benguet vegetable industry (Cabreza 2003b). This, compounded with BPI’s failure to obtain the commitment of importers to support Benguet farmers,24 was sufficient for the stakeholders to cast doubt on the capability and sincerity of the BPI to address the problems of the industry. In light of the president’s decision to reorganize the BPI, Adiong handed in his resignation (Philippine Daily Inquirer, November 21, 2003). Bureau of Customs The stakeholders understood that anomalous import permits did not complete the smuggling equation. The BoC, the agency supposed to be on top of monitoring the importation of goods among other things, was the core of much of the engagement of the traders’ groups led by the Benguet Vegetable Distributors’ Cooperative, backed by Councilor John Kim. The BoC did not deny the incidence of smuggling, but downplayed the extent of revenue losses, which the traders found insulting to the Benguet stakeholders (Alangdeo 2004). At the start of the engagement, the BoC, where corruption is an open secret, was very hostile to civil society. However, with Ordoñez endorsing their actions, the traders were able to penetrate the agency (Kim 2004; Alangdeo 2004), but were limited to the acquisition of documents in order to study the magnitude of the problem. As their engagement persisted, the traders’ participation in the antismuggling operations of the agency was institutionalized in 2003 through various memoranda stating that examination of refrigerated shipments of fruits and vegetables should be conducted in the presence of a representative from the La Trinidad Trading Post Association, along with other concerned organizations. Likewise, they were witness to the condemnation of seized container vans and actual destruction of confiscated vegetables. Of note were other parallel initiatives of the traders to control smuggling. Following the creation of an ad hoc interagency body, Task Force Blue Collar,25 to investigate and monitor points of entry of smuggled

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goods, the Early Bird Traders Association, La Trinidad Vegetable Trading Post Association, Bagsakan Traders Association, and La Trinidad Booth Holders Association founded the La Trinidad Vegetable Supreme Council. Instead of waiting for the government to identify the location of the smuggled goods, the traders went to Manila and identified the areas themselves. The traders personally got documents on import requirements from the DA and brought these to the BoC, thus avoiding critical delays. They also conducted antismuggling inspections in Metro Manila markets, warehouses, and port areas. There was actually a superfluity of antismuggling projects initiated separately by government, civil society, and business or founded as joint undertakings of the three sectors. As smuggling became almost ubiquitous, from vegetables to cellular phones, the president constituted the National Anti-Smuggling Task Force, part of the three anti-smuggling agencies together with the Cabinet Oversight Committee on Anti-Smuggling and the Anti-Smuggling Intelligence and Investigation Center (ASIIC). The Benguet stakeholders were represented in each of these projects, clearly indicating the government’s openness toward civil society participation in subduing smuggling activities. But with no law enforcement power, their role was confined to monitoring and inspections. Department of Trade and Industry Surprisingly, although the DTI is the chief agency in charge of international trade negotiations, the Benguet vegetable stakeholders found it secondary, if not totally unnecessary, to tap the agency for assistance. The traders and farmers had the impression that the DTI could only be utilized in the promotion of their products (Alangdeo 2004; Andiso 2004). Nevertheless, since the vegetable crisis coincided with the Fifth Ministerial Conference of the WTO, FTA and the SNR took the issue as part of their lobbying strategy in opposing further WTO- and trade-related liberalization. DTI Secretary Manuel “Mar” Roxas III, however, a supporter of consumer-oriented globalization, was opposed to an increase in tariff rates.


People, Profit, and Politics

Fortunately, with the national elections fast approaching, civil society discovered the best way to engage the DTI—the secretary’s political aspirations. Civil society, along with the local officials, tried to win over Roxas by insinuating that the support of the Cordillera voting public would be dependent on his stance on further trade liberalization in agriculture, especially vegetables. Thus in the end, he capitulated and supported the actions of civil society. However, although Roxas was seemingly receptive to the concerns of the civil-society groups in the end, the DTI as an institution, which could have taken a more proactive role on trade issues, has somehow relinquished its role and has been reduced to a mere marketing arm. Tariff Commission The Tariff Commission conducted two public hearings26 in view of the petition filed by the DA, along with food crops manufacturers and importers, local government officials of Benguet and Mountain Province, and farmers led by the Bad-ayan Buguias Development Multipurpose Cooperative, to increase up to the maximum bound levels the tariff rates on certain vegetables and root crops. During the public hearings, the challengers27 fought for the existing 7-percent tariff rate. Armed with statistics from various sources, one of which from the Bureau of Agricultural Statistics (BAS), the parties against the petition argued that contrary to popular opinion, the volume of legally imported vegetables was in fact declining, which naturally made smuggling the real problem. Thus, inept customs implementation, rather than low tariffs, was the issue that must be resolved. The importers further contended that higher tariffs would only provide greater incentive to smuggle. Unable to make a precise distinction between legally imported and smuggled vegetables, and demonstrate that the former was indeed the cause of the domestic vegetable industry’s bankruptcy, the DA’s argument for a tariff rate increase did not hold water. The Tariff Commission struck down the proposal and recommended to the cabinet and the interagency TariffRelated Matters (TRM) to maintain the status quo at 7 percent.

Mobilizing against Vegetable Importation


Office of the President Since the vegetable crisis began in late 2001, the local officials and traders in Benguet had been flooding the Office of the President with letters, petitions, and resolutions, first asking the president to stop importation then eventually appealing to enhance the competitiveness of the industry. It was not until 2003 that the Office of the President through the Presidential Management Staff initiated formal meetings with the stakeholders from the major vegetable- producing and -trading towns of Atok, Buguias, Kapangan, and Kibungan to probe into the industry’s plight (Sales 2003a). These resulted in the drafting of various recommendations involving production, post-production, marketing, and importation to enhance the productivity of vegetable farmers in Benguet (Sales 2003d; Molintas 2004). On the occasion of the 103rd founding anniversary of the province, the president herself visited Benguet, convened the BFFI, and pledged to stop the issuances of permits by BPI, along with a promise of an assistance package for production, postharvest, and transport facilities. These formal and informal engagements bore immediate results, as the president issued Executive Order 197 to raise tariff rates of imported vegetables from 7 percent to 25 percent. Legislature The media hype over the Benguet vegetable industry’s imminent demise due to trade liberalization resulted in the filing of three separate resolutions in the Twelfth Congress—House Resolution (HR) 834 by Imee Marcos, HR 879 by Satur Ocampo, and HR 894 by Oscar Gozos—to conduct an inquiry into the importation and alleged smuggling of vegetables. The relentless lobbying of like-minded legislators, mainly from party-list groups such as Representatives Loretta Rosales of Akbayan and Satur Ocampo of Bayan Muna, in tandem with a privilege speech delivered by Benguet solon Samuel Dangwa underscoring the impact of vegetable importation on the livelihood of the farmers, gave the problems of the vegetable industry ample space in the legislative arena. In the Senate as well, Senator Manuel Villar introduced two resolutions, Senate Resolution (SR) 464 and SR 258,


People, Profit, and Politics

directing the appropriate Senate committees to conduct an inquiry into the influx of imported and smuggled vegetables, with the main objective of reviewing the GATT provision lifting quantitative restrictions on vegetables. A related resolution was also introduced by Senator Rodolfo Biazon to look into the impact of the implementation of the country’s commitments to the WTO under the GATT. Congressional hearings were held through the House Special Committee on Globalization and the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFM), each attended by civil society. However, like the public hearings in the Tariff Commission, the differentiation between legal and illegal importation and their attendant impact was once again the point of contention. If it was any consolation, though, the lack of government support in production and market intervention was highlighted in the inquiries. COCAFM, through its chair, Senator Ramon Magsaysay Jr., carried on continued dialogues and organized a field visit to Benguet. Though no straightforward resolution was laid out, civil society was able to obtain the assurance of the senators, through Magsaysay’s influence, regarding the farmers’ utilization of the ACEF. In sum, civil-society groups were comprehensive in their approach of engaging the state. With well-defined analysis of the problem, they were able to properly identify the government institutions where pressure should be applied, thus avoiding needless efforts and misuse of resources. In the course of the engagement, the relationship between government and civil society underwent various arrangements—from largely collaborative at the local level to critical and hostile at the national level. On the whole, though, civil society was able to elicit only minimal response from the government.

Analysis and Assessment
Political Opportunities

By and large, civil-society groups strategically exploited favorable political opportunities to engage government and brought their

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organizational strengths to bear on a somewhat vulnerable environment. In the policy arena, the engagement process was made possible on the whole by institutional openings, presence of influential allies, electoral instability and, to a certain extent, persistent and sympathetic media coverage. It is important to point out, however, that the opportunities for mobilization and engagement seized by the civil-society groups in this study were actually an offshoot of the indefatigable campaign against unbridled trade liberalization. As mentioned earlier, civil society has assiduously labored for reforms in the economic development framework championed by various institutions of the state. In effect, the Benguet vegetable industry stakeholders benefited from the changes in the political opportunity structure given birth to by a larger movement. Access to political institutions Notwithstanding the creation of avenues for citizen participation in governance, unequal degrees of openness were rendered by official state agencies to civil society for very different reasons. Nonetheless, most of the interaction that took place was attributed largely to institutional openings for mobilization and policy influence. The local government’s accommodating posture toward civil-society participation—especially the farmers and traders—was a natural response, given that it benefits much from the industry. Thus, receptivity by local government was generally driven by economic urgencies. The local government perceives all players in the Benguet vegetable industry as partners to the development of its predominantly rural economy. Moreover, indifference by the local officials to the concerns of their constituents, mainly within their kinship and patron-client network, is tantamount to political suicide. At the national level, the perspective of the bureaucracy with respect to civil society participation differed from one unit to another. As the principal agency of the Philippine government responsible for the promotion of agricultural development, the Department of Agriculture is


People, Profit, and Politics

theoretically the institution where small farmers could automatically gain access and support. The case study demonstrated that it was, indeed, the case. In fact, DA has been responsive to civil society’s clamor for democratizing the trade policymaking process.28 In contrast, having purely police-authority function over the ports, the Bureau of Customs has not conventionally enjoyed attention from civil society. In addition, due to endemic and deeply ingrained corruption in the institution, the BoC was apprehensive and suspicious of groups gaining access and making inroads into their operations. On the other hand, through the inquiries, the Philippine Congress became a platform for grievances of various groups with legislators acting as arbitrators. This third-party function of the legislative, in the pretext of aiding legislation, provided an opening for civil society into the legislature. Furthermore, the party-list system offered a doorway for the marginalized and underrepresented to take part in the policymaking process. However, there are institutional problems in the legislature that make openness of the Congress a matter of contention. One is the very low awareness of policymakers on international trade—the treaties, the jargon and, ironically, even the commitments made by the Philippine government; two, the nonattendance of representatives to committee hearings on trade and tariffrelated matters, which clearly confirms their lack of knowledge and also highlights their lack of interest; three, the legislative mill which tests the resilience and dexterity of civil-society groups; and finally, the parochial disposition of the Congress as an institution, in which an issue that does not deliver votes is bound to be overlooked (Villanueva 2004). In addition, although the legislature has the power to make laws and to, theoretically, lay down the legal blueprint for the policies and programs that the executive is mandated to implement, in terms of policy directions in trade, it is the decision of the executive that still holds. In fact, more often than not, the legislature becomes a mere rubber stamp for economic programs and policies that have already been firmed up by the line agencies, especially the National Economic and Development Agency (NEDA).

Mobilizing against Vegetable Importation


Therefore, caution should be applied in portraying the institutionalization of civil society participation through ironclad canons as an immediate political opportunity, which could set in motion interaction with the state. In the case of the Benguet vegetable industry, institutionalization has only secured the minimum requirement of providing the staple ingredient of every democracy—spaces for participation—but not policy influence. While the law may appear sufficient, even socially progressive, equally important is the openness of the politico-administrative environment to civil society participation in policy making (Brillantes 1997). The problem with the main agencies tasked to craft Philippine trade policy, especially on tariff-setting—the NEDA, the Tariff Commission, the interagency TRM, and the DTI—is that a facade of openness to consultation is projected. But in actuality, these institutions are insulated from popular pressure; they merely allow sufficient access to give the illusion of democratic practice. Government, particularly the Ramos administration, instituted protective instruments to shield these organizations from external influence and particularistic interests, and from the conflicts, setbacks, and media assault produced by open consultation. Thus, trade policy making and implementation have been basically “technocratic” (Aquino 1998, 33), with apolitical managers posing a barrier between civil society and the elite planning agencies. The Tariff Commission is a case in point. While it may seem that civil society can rely on consultations with the commission for redress of grievances on tariff-related matters, in truth, public hearings are purely fact-finding in nature to accommodate complaints. The commission may unilaterally set tariffs even without consultations. Related to this, naturally, is the opacity of these agencies in formulating policies. As they are supposedly protected from public pressure, clandestine practices are customary, thereby watering down the likelihood of participation and influence.29 Presence of influential allies If the trade policymaking arena is exclusively controlled by the executive department, which is elusive to political participation by


People, Profit, and Politics

dissident groups, how then was civil society able to permeate the state? In the case of the Benguet vegetable industry, the presence of influential allies, particularly the elite, became vital. In situations where opportunities are not favorable or hostile, such as the insulated trade policymaking and implementation bodies, allies may be useful for prying open these institutions and ensuring that inputs of civil society are not merely noted but incorporated. Hence, these allies, who commiserate with or support the objectives of civil society, usually have the political influence and resources that movements lack—and in some cases, moral authority—which are particularly important during formal policy deliberations. A close look at the engagement process discussed earlier would evidently suggest that powerful allies consisted both of officials at the local (Fongwan, Kim, Molintas, Sacla, and Uy) and at the national levels (Montemayor, Ordoñez, Rosales, and Ocampo) levels; and important figures in Philippine civil society (Tañada, Mariano, and the church as an institution). Although the former are part of the state apparatus and members of the polity, most of them can be considered as institutional activists.30 They assured civil society of open channels for dialogue and facilitated interaction with well-disposed key individuals. Some of the allies are party to the engagement process as well, which implies that the persona of the leader determines how a government agency is responsive to civil society. Certainly, they have their own motivations and self-interests (e.g., to further their political careers) in supporting the organization and advocacy of civil society involved in the concerns of the Benguet vegetable industry. Hence, for civil society, seizing such opportunities could be tantamount to allowing themselves to be used, wittingly or unwittingly, by certain narrowly motivated parties or sectors with self-serving interests. Nonetheless, civil society seized the opportunities posed by their individual desires and they were pivotal in terms of influencing the outcome of engagement. Furthermore, it is important to note the high degree of trust and confidence afforded to officials at the local level, something

Mobilizing against Vegetable Importation


that may hardly transpire at the national. Trust is not necessarily sine qua non in state-civil society engagement, but farmers and traders counted on their personal relations with all their key allies, as patrons and friends. Thus, instinctively, the stakeholders singled them out as supporters, subscribing to their analyses and positions of the issue. Electoral instability The national elections were contributory to the moderate success of state-civil society engagement in the vegetable industry. It was a coincidence that civil society engaged the state at the time when cleavages within the political elite were prominent, but not solidly frozen, thereby creating a highly volatile situation for the electorate. This unpredictability encouraged political elites to compete for electoral support and to accommodate diverse concerns, in which civil society significantly benefited. Although fragmentation of elite alignments is often associated with political parties, in a country where the party system is generally weak, the shift in the support base of individuals makes them more or less acquiescent to the demands of civil society. Why Arroyo took a year since the deluge of imports reached incalculable proportions to respond to the crisis, which incidentally was also a year prior to the national elections, could be explained by this precariousness, especially after Molintas’s pronouncement of a victory for her opponent, Panfilo Lacson, in Benguet. This was also the case with Roxas in his effort to cajole the Benguet voters with his populist image and with the local government officials as the political costs of inaction in a predominantly rural economy would be insurmountable. Local politicians are generally more likely to accommodate civil society than their national counterparts because of the more volatile nature of local elections. Concomitantly, civil society has gained knowledge of the game of traditional politics, employing quid pro quo and realpolitik in its negotiation for tariff reduction and safety nets. Electoral support was extremely used as a leverage. Strategy-wise, this facilitated the


People, Profit, and Politics

engagement process. Furthermore, there were advantages in capturing the political opportunities offered by electoral instability. For example, although discussions on economic issues, such as trade liberalization, have traditionally remained at the margins during elections, given the candidate-centered campaigns, civil society was able to push vegetable importation as a major electoral concern for the voting public in Cordillera. Favorable media coverage The media coverage of the impact of trade liberalization on the Benguet vegetable industry was high for the whole year of 2002, as the inundation of cheap imports and the predicted collapse of the industry surfaced practically every day in the major broadsheets. Besides the news reports, editorials and opinion sections discussed the problem, most of which acknowledged the need to institute mechanisms to enhance the competitiveness of the industry and protect the agricultural sector in general from the ramifications of liberalized trade. Some newspaper columnists even engaged the public in sustained debate, running a series of thinkpieces on the future of Philippine agriculture, with the Benguet vegetable industry as a case in point. Although news coverage achieved balanced reporting as data fed by government sources (i.e., underscoring the persistence of smuggling) were often presented with competing views (i.e., emphasizing the problem as a result of WTO-mandated trade liberalization), mainly from spokespersons of civil society organizations, overall, the slant was sympathetic to the plight of the Benguet vegetable farmers. This media access increased the political opportunity for civil society, as it likewise became entangled with the struggle over meanings in its attempt to influence public policy. At the time of engagement, the Arroyo administration was absorbed with the grand design of projecting an image of populism in anticipation of the elections; thus, when the vegetable issue moved into the headlines, the government institutions opened their doors. In the experience of civil-

Mobilizing against Vegetable Importation


society groups involved in the issue of the vegetable industry, public sentiment in their favor became an instrument of pressure, which hastened the engagement process as well as educated the populace on the implications of agricultural trade liberalization.

Civil society utilized a range of tactics, which can be roughly classified according to the degree to which such approach targets the exact government institutions and individuals involved in the vegetable industry (direct and indirect) and the level to which these submit to rules and procedures of engagement established by law (formal and informal). Mainly, civil society action fall within the broad categorizations: formal and direct, informal and direct, and informal and indirect. Formal and direct engagement was employed merely to take advantage of the conventional and institutional mechanisms for direct participation and policy influence. For instance, at the local government level, this can be seen in BFFI’s membership in the Benguet Vegetable Council. By the same token, civil-society groups participated in the consultations at the DA, DTI, and Office of the President; and in hearings held by Congress and the Tariff Commission. At the level of policy implementation, by virtue of administrative orders and memorandums, civil society was included in the official anti-smuggling operations of BoC and other ad hoc bodies. Basically, the logic was to work within the official gateways established by laws and procedures, in fulfillment of democratic goals and objectives. However, the formal process draws attention to the vulnerability of civil society. The study has undoubtedly shown that the Achilles’ heel of civil society in the formal battleground of policy engagement comes from its inadequate organizational resources, mainly proper information to corroborate its positions. In policy engagement, information becomes a powerful weapon in various ways. First, only through accurate data can one formulate a clear analysis of and position on the issue. Articulated positions without basis or evidence can likewise


People, Profit, and Politics

compromise public support. While it may seem prosaic, civil society, in some cases, has the tendency to ignore the importance of data and information. This obviously affects the outcome of its engagement because without proper evidence, civil society can only bank on banners and rhetoric as a strategy (Villanueva 2004). With neoliberalism cemented in the bureaucracy, civil society cannot merely debate with government at the level of economic ideologies.31 Informal and direct strategies of engagement were used to access hostile institutions, through the support of influential allies. Central to this is building working relations with the heads of concerned agencies through informal meetings and creating rapport with their staff. This method was profoundly used by civil society, as the formal process was, for the most part, cursory and undertaken only to comply with the statutes and to placate the demand for political participation. A high level of expertise has been achieved by civil society in informal and indirect tactics, which revolved mostly on influencing the media agenda. With the media capitalizing on the issue, civil society also utilized this unofficial opening for policy engagement. Indeed, media advocacy became a huge component of civil society’s strategy, which consisted of bombarding the public with statements, consciously using sound bites (such as marijuana for vegetables) and farmers’ anecdotes to give the effects of importation a human face, and even building good relationships with the press, to get their message across and, more significantly, to arouse public outrage for government’s inaction and lack of support for civil society.32 McCarthy, Smith, and Zald (1996) rationalize the necessity of shaping public opinion to collective action.
An essential task… is to frame social problems and injustices in a way that convinces a wide and diverse audience of the necessity for and utility of collective attempts to redress them…While movements’ ultimate targets are typically policymakers, movements must mobilize people and resources within the wider society in order to influence this authoritative elite. These third parties include both the mass public and reference elites, the people with whom the authoritative elite interacts and consults. (291)

Mobilizing against Vegetable Importation



Based on the tactical objectives laid down earlier, the dismissal of a public official involved in smuggling activities, increase in tariff rates from 7 to 25 percent, and provision of a competitive-enhancement package for the Benguet vegetable industry demonstrate the presence and extent of state-civil society engagement. Judging from these accomplished goals, it can be construed that the relations between state and civil society in addressing the impact of trade liberalization on the sector has been successful. However, a more circumspect analysis reveals that not all policy actions should be taken at face value. The smuggling scourge continues, so long as corruption is systemic. Although there has been a decline in the illegal importation of vegetables since the active involvement of traders’ organizations in the monitoring of Customs procedures (Kim 2004), no official implicated in smuggling activities has been convicted.33 Despite the fact that Arroyo took political action on the matter by relieving Adiong of his duty, smuggling remains the norm in a bureaucracy that is accustomed to corruption, especially with loopholes in the Tariff and Customs Code and tolerance for such practices. For this reason, civil society is persevering in its lobby to expedite the passage of the Anti-Smuggling Bill, which provides for systematic solutions and stiffer penalties—both fine and imprisonment—for outright and technical smuggling, and for the creation of a special body against smuggling composed of heads of relevant government enforcement agencies and private sector who will be appointed by the president.34 With regard to the tariff rates increase, although civil society emerged victorious due to an executive order issued by the president to increase the rates of duty of imported semitemperate vegetables from 7 percent to 20-25 percent, the fact is every EO has a shelf life. In effect, this would imply the need for a new round of engagement once the order expires. From another angle, though, continuous engagement could contribute to the consolidation and sustained action of movements, which are at least unified on the issue of tariffs. But at the level of policy influence, EOs only serve as transitory measures with very short-term impact. The possibility


People, Profit, and Politics

of lengthening the period of the EO is still indeterminate, given the full implementation of GATT-UR by 2005, continued application of the AFTA-CEPT, and ongoing negotiations on bilateral trade agreements. This scenario makes the competitive enhancement package all the more important. The Benguet Cold Chain System project was finally installed in the first quarter of 2004.35 In addition, the government approved a PHP 25.19 million loan from the ACEF for a project in Benguet that would modernize and ensure year-round production of cut flowers, cutfoliage, and high-value vegetable products, thereby boosting chances of Cordillera-grown crops to compete with imported farm commodities.36 But while the accomplishment in this aspect is commendable, once more, these forms of government support were long overdue, such that it took a near-bankruptcy of the sector for them to be even deemed as necessary. Cynicism on the policy “victories” of the engagement is, however, balanced by encouraging results on other dimensions, which can be interpreted as both inadvertent and intentional. These spillover effects are manifest in three aspects: industry, civil society, and political opportunity. The most evident of which is the state’s recognition of the vegetable sector as an industry. Indeed, vegetables have been historically at the periphery in terms of agricultural development, compared to other crops. At this point, there is a clear appreciation of its importance economically and politically. The players—farmers, traders, local governments, etc.—have now taken the cudgels of upholding its survival in the global market; a concrete manifestation is a national consultative summit, which started in 2003, to formulate a development blueprint for the sector. Whereas the interests of the vegetable industry were overlooked in the previous trade agreements that the Philippine government entered into, this was not the case any longer as vegetables are not included in the Early Harvest Program between the Philippines and China signed in April 27, 2005, even though raw and unprocessed agricultural products are covered by the agreement (Go 2005), as a result of the political muscle flexed by industry participants. Second, civil society in the process contributed to the strengthening of the grassroots through political organizing and raising social awareness, in order to hold

Mobilizing against Vegetable Importation


government accountable and responsive to community needs. It consolidated and expanded its base, thereby ensuring power both in numbers and political influence. Moreover, despite differences in interests and tactics, the relationship among the civil-society actors was collaborative, based on mutual needs and common goals, and their actions were complementary and, in most of cases, dependent on each other. Finally, civil society in this study has also created or expanded opportunities for others. 37 Having benefited immensely from the opportunities produced by the burgeoning movement against aggressive liberalization, the Benguet stakeholders and other civil society organizations have also exposed and gauged the points of weaknesses within the political system that can be arrested by groups of similar interests and objectives, or by their challengers.

This study has shown that the strategies, processes, and outcomes of civil society in its engagement with the state rest upon external factors, which are neither constant nor permanent, and that the changes could facilitate, hinder, or totally obstruct collective action. In the case of the civil society players in the Benguet vegetable sector, they were unduly optimistic and more or less responsive to changes in political opportunity structures. However, while there are changes in the political opportunity structures which civil society can take advantage of, there are stable structures in Philippine polity—submission of the state to market forces—that frustrate consequential and long-term actions of civil society. Dryzek (1996) suggests that for movement groups to engage effectively with the state, the aims of the movement groups should be in some way matched with imperatives such as economic growth, legitimacy, or security, which are sought by all governments regardless of political leanings to ensure stability. If there is little or no connection between movement goals and state imperatives, inclusion in state fora presents risks of cooptation. The Philippine government has been in an uphill battle in its fulfillment of economic development, but unfortunately, the course it has taken is


People, Profit, and Politics

contradictory to what civil society judges as the right path. While it seeks growth through the doctrine of laissez-faire, civil society, on the other hand, pushes for state regulation of the market, which implies strong faith in the ability of the state to effectively manage the market. However, alongside this confidence in the state’s regulatory functions is an equally strong distrust of its governance role, based on its failure to implement and enforce policies and laws, which have led to the pervasiveness of smuggling activities. Hence, civil society is ostensibly ambivalent on the state’s position in the scope of problems confronting the vegetable industry. This underpins the assertion put forward earlier regarding openness of the state as a function of policy in question. It is axiomatic why there was a plethora of government-civil society partnerships against smuggling, while civil society continues to be hammered or repudiated in its lobby for tariff rates increase. Anticorruption has been a major plank of administrations following the transition to democracy, in which the antismuggling project in tandem with civil society fits perfectly. On the other hand, the increase in tariff rates of imported agricultural produce, which civil-society groups in this study are advocating, threatens the foundation of the Philippine government’s economic paradigm of neoliberalism, of which the President is a strong advocate. Reinstatement of protective measures for agriculture, which in effect means reversal of trade liberalization, would be a silent but open admission of Macapagal Arroyo’s oversight on economic planning, a step which she is not enthusiastic about. Hence, the government’s accommodation of civil-society groups was more symbolic than substantive, as illustrated in the perfunctory consultative processes on tariff setting with negligible influence of civil society on policy outcomes. In spite of this, characterizing the relations between state and civil society in this study cannot be reduced to simplistic dichotomies of “partnership” or “opposition.” Both state and civil society are intertwined in complex forms of interaction in which antagonism and cooperation often occur simultaneously. Difficulties abound in engaging state agencies that perform the roles of policy advocates and regulators.

Mobilizing against Vegetable Importation


This is especially the case with agencies involved in promoting business confidence and supporting capital accumulation, which more often than not, are in conflict with social movements because of the former’s extensive political influence in the polity and their agenda reflective of the interests of corporations (Stearns and Almeida 2004). In such a condition, the relationship between the state and civil society is antagonistic; the token accommodation of the state is merely to manage conflict. In contrast, the engagement of civil society with the local government has undoubtedly shown much potential. Hostility, suspicion, and mistrust—which often characterize state-civil society relations at the local level on controversial globalization-related issues such as mining and dam building—were stymied. What transpired was what Stearns and Almeida (2004, 479) refer to as “state-social movement coalition.”38 The impetus for state and social movement actors in forging such coalition diverges, but in the case of the problems of the Benguet vegetable industry, it was the seriousness of the local economic situation that prompted the political demand making. The probability of civil society forming an alliance with local government is greatest when the cause of civil-society groups has a widespread, direct, and negative effect on the locality (Stearns and Almeida 2004). In any case, a certain “state-society synergy” (Evans in Magadia 2003, 11) existed between the local government of Benguet and civil-society organizations. Although they each enjoyed distinct capacities and power that the others do not have or only partially possess, they were “able to enhance, and not challenge, oppose or cancel out, each other’s efforts” (Magadia 2003, 11). However, this seemingly synergistic relationship was forged merely to collectively muddle through the ordeal brought about by trade liberalization. Rather than engage in the politics of resistance, local government and civil society embraced coping strategies that somehow legitimized the economic development track pursued by the Philippine state. In sum, engaging the state in the era of globalization poses more challenges for civil society organizations compared to the past.


People, Profit, and Politics

Agricultural trade liberalization is a huge component of the neoliberal agenda, which has been the guiding principle of past and present administrations—unequivocally expressed in their development plans and also supported by a large number of intended beneficiaries, the consumers, and a few local industries profiting from cheap agricultural imports. Hence, given its marginal status, dissident groups wrestling to influence trade policy are dismissed as protectionist ideologues keen on reverting the country to a planned economy where the state plays a big role. Their relations with the state on trade-related matters such as importation remain confined to issue-specific and moderate reforms that are meant only to pacify the uproar and not to comprehensively address the problem.

I thank Liza Gobrin, Linda Gobrin, and Pablo Rosales for their generous assistance and support in the conduct of the fieldwork for this study. I am also grateful to Alfredo Alangdeo and John Kim for sharing their records on their engagement with various agencies, majority of which were hard to obtain elsewhere. Mars Mendoza helped correct factual errors on the earlier draft of this paper.

1. In 2004, agriculture accounted for about 20 percent of total gross domestic product (GDP), contributing 0.96 percentage point to total GDP growth (National Statistical Coordination Board 2005). Estimated at 11.37 million, the sector’s share to total employment is 36 percent (BLES 2005). According to Lantican (1998), the Philippines has a comparative advantage in the production of select fresh vegetables and vegetable seeds. From 1999 to 2002, exports averaged 24 million kilograms. Primary exports were shallots, asparagus, and fresh or dried manioc/cassava (Ibon 2003; Guzman 2000). Foreign exchange earnings in 1995 and 1996 posted very encouraging records for both volume (51,107 tons in 1995 and 39,060 in 1996) and value (USD 34 million in 1995 and USD 35 million in 1996). Fresh/chilled vegetables accounted for the bulk. However, due to limited production, the cultivation of vegetables has been largely


Mobilizing against Vegetable Importation


meant for local consumption. Only less than 1 percent of the total supply of vegetables is exported. 3. Semitemperate vegetables include broccoli, cabbage, carrot, cauliflower, celery, lettuce, mushroom, and potato. 4. Vegetable farmers in Benguet supply from 20 to 25 percent of the total vegetable needs of the Philippines (Ilagan 2003). The province accounts for 67 percent of the volume of production of white potato, 64 percent of cabbage, and 75 percent of carrots for the whole country in 2000 (PIDS 2004). Northern Benguet towns produce 20 tons of carrots and 50 tons of potatoes a day (Dumlao 2002). In terms of employment, in the rural areas, 60 percent of Benguet’s 322,000 farmers get their livelihood from vegetable farming (Alcantara 2001; Cabreza 2002a), representing up to 40,000 farm families (Cabreza 2002a). 5. The “high value crops” development framework is a market-/private sector-led strategy, with minimal subsidies to vegetable growers, under a liberalized trade policy. It further necessitates the adoption of modern technology in production (Lantican 1998; Aquino 2003) and rationalization of resources to maximize agricultural productivity by virtue of Republic Act 8435 or the Agriculture and Fisheries Modernization Act of 1997. 6. Actually, Lewis (1992) claims, “the Benguet vegetable farmers became entangled in the world market economy not primarily as producers for a global market, but rather as consumers of agricultural supplies produced in the metropolitan states” (143-44), dominated by Hoescht and Bayer (German), Shell (AngloDutch), and Union Carbide (American). 7. In Cordillera, many vegetable farmers source their capital from a landholder or trader, usually a close friend or relative. Some own the land they till, while others work as tenants or rent the land for cultivation. Farmers buy inputs either from traders or middlemen in trading posts, and sell their produce to the same trader. The trader would naturally get half of the farmer’s earnings (Ibon 2003). 8. Thirty to 50 percent of vegetables are registered as postharvest losses (Ibon 2003). 9. For example, in 2000, while the farmgate price of carrots was pegged at PHP 16.33 per kilo in Benguet, its retail price in its primary market, Manila, is PHP 43.70 per kilo (PIDS 2004). 10. Domestic demand and consumption of vegetables in lowland areas has been decreasing by 40 to 60 percent since 1999 (Ibon 2003). 11. Potato is the leading vegetable imported, with 13 percent. 12. Retailers were forced to sell their commodities at much lower prices than their imported counterparts. Normally, during typhoons in early July, prices of vegetables

Protests and Perceived Threats in the Hog Industry
Joel F. Ariate Jr.

ig-waste management and disposal, controlling foot-and-mouth disease (FMD) and other zoonotic diseases (i.e., animal diseases that can be transmitted to humans), food safety concerns, and the issue of social equity are the pressing concerns that the Philippine hog industry must address at present, according to a recent study made for the United Nations Food and Agriculture Organizations (UNFAO) (Costales and Delgado 2002). The issue of social equity best sums up the interrelatedness of these concerns:
The survival of the smallholders in pig production depends primarily on political decisions to finally enforce zoning ordinances, effluent standards, and environmental pollution regulations, and only to a lesser extent on the engagement in international trade agreements, or on domestic market developments influencing the scaling up of production systems to the disadvantage of smallholders. (Costales and Delgado 2002)


However, civil-society actors in the hog industry are only tangentially concerned with these issues. These actors are mainly the hog industry players themselves. As such, the civil-society actors in the hog industry have focused primarily on one issue: for them not to suffer a “profit squeeze.”


People, Profit, and Politics

As articulated by more vociferous and visible civil-society actors in the industry, this concern has been expressed as a fight against smuggling of other meat products, a fight against any increase on meat imports, a fight for greater importation of corn, and a fight against low farmgate prices. To justify these “fights,” the big and organized industry players cum civil-society actors have advanced loftier causes. These advocates claim to represent the more than three million backyard hog raisers that produce more than 70 percent of the country’s total hog inventory. If the smuggling and importation of meat goes unchecked, hog raisers will be selling their livestock at a loss. If nothing is done about the perennially low supply of corn, thus meriting its high market price, then the Filipino consumers cannot ask for a lower price of pork since corn constitutes 50-60 percent of hog feeds. Either the millions of hog raisers suffer irrecoverable financial losses or the millions of consumers lose pork in their food basket. Economic gain or food security: these are the two main issues that underpin the so-called fights of civil-society actors in the hog industry. And these are often waged against the state and occasionally against players from other industries that are also engaged in providing food for the Filipinos. Where is globalization in all these? In the hog industry, the polysyllabic word globalization has been reduced to three two-syllable words: tariff, import, quota. These trade issues are what basically draw civil-society actors in the industry to engage the state, specifically its legislative and executive branches, the branches that determine how much tariff to impose on what commodities and how much of which commodities to import. However, prevailing international trade agreements structure the state’s engagement with civil-society actors in the hog industry. Even the civil-society actors in the hog industry apparently understand the state’s predicament. For example, in 2003, tariffs on imported processed meat have been reduced to 0-5 percent as an effect of the 1992 Association of Southeast Asian Nations (ASEAN) Free Trade Area and Common Effective Preferential Tariff (AFTA-CEPT) Agreement; for whatever protest there was it did not go beyond the level of a pip. “This is in spite of the

Protests and Perceived Threats in the Hog Industry


possibility that increased importation of canned meat products and other processed meat could result in weaker demand for domestically produced meat, once domestic processors find themselves losing market share to competing imports” (Habito 2002). In 2009, lower tariff rates will take effect on all meat products, posing a more direct threat to the hog industry and yet at the moment, no civil-society actor in the hog industry is making any significant move on this issue. This situation foreshadows the kind of engagement the state and civilsociety actors in the hog industry had and will have in the context of globalization. It is and will be a selective engagement on issues that civilsociety actors believe they can still maneuver the government to accept their own terms. Moreover, since these civil-society actors are industry players themselves, issues of economic viability more than issues of social equity will be the focus of their engagement with the state. Hog-industry players have the financial and organizational advantage over the other small and un- or semi-organized industry actors to wage campaigns on some issues that involve the state’s intervention. However, international trade agreements had and will vitiate the engagement of the state and civil-society actors. This chapter will look into two interrelated aspects of state-civil society relations in the Philippine hog industry in the context of globalization. The first aspect deals with how civil-society actors have engaged official state agencies through various formal and informal strategies of dialogue, negotiation, and bargaining on specific issues or concerns. The second will look into the extent civil-society actors have been able to influence governmental policy making. However, with international trade agreements already in place, and since “it is one thing to argue that NGOs are affecting the political process [and] … quite a different matter to argue that civil society is actually shaping the policies that emerge from the process” (Silliman and Noble 1998, 302), this second aspect will not be an enumeration of policy transfers. Rather, it will be a look into the state’s responses to specific demands from the hog industry cum civil-society actors.


People, Profit, and Politics

Pigging Out on Pork
The Philippine hog industry’s growth in the last two decades is mainly driven by domestic factors, namely, the more than 2 percent annual population growth rate and the emergence of urban areas. It was, and still is, a demand-driven growth. A weakening in demand caused by importation and smuggling of low-priced meat is the most immediate threat to the hog industry’s profitability.

In an in-depth study conducted for the United Nations Food and Agricultural Organization (UNFAO), Delgado and Narrod (2002) conclude that the almost unhampered growth of the Philippine hog industry in the past two decades (table 1 and figure 1) is related to two interrelated phenomena: the continuing high population growth rates and rapid urbanization.
Robust growth in the demand for meat in the last two decades in the Philippines has been propelled mainly by continued high population growth rates, at about 2.3 [percent] per annum and the rapid rise of urbanization, particularly in the provinces around the National Capital Region (Metro Manila), covering the regions of Central Luzon and Southern Luzon. There are also major urban centers in the south, Metro Cebu in the Visayas islands, and Metro Davao in the southern island of Mindanao. Demand growth for meat has been impressive, even with modest and often interrupted improvements in per capita incomes. (Delgado and Narrod 2002)

In 1980 the average pork consumption per person was 9.17 kilogram; now the average hovers around the 18 kilogram per person mark, an increase of about 85 percent (table 1). Because of market demand, hog production continues to grow, though at times the industry’s growth rate seems to taper off then bounce back again (figures 1 and 2). A cursory glance at figure 2 will reveal that commercial hog producers seem to have experienced a bumpier growth than backyard or small-scale hog raisers. The Bureau of Agricultural Statistics (BAS) defines backyard or small-scale livestock farms

Protests and Perceived Threats in the Hog Industry


Table 1. Pork supply and utilization in the Philippines, 1980-2002
Supply (in metric tons) Year Production 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 448,000.00 548,000.00 523,000.00 564,000.00 590,000.00 508,000.00 589,000.00 641,000.00 713,000.00 804,000.00 824,545.01 845,189.00 845,256.46 880,944.91 921,760.63 969,862.46 1,035,808.19 1,085,544.33 1,123,747.85 – 1,212,536.00 1,265,888.00 1,332,347.00 Imports 1,000.00 6,000.00 3,000.00 2,000.00 50.00 1,000.00 1,000.00 1,000.00 3,000.00 4,000.00 1,177.01 741.47 793.38 418.47 695.37 2183.42 6072.96 10,369.22 12,592.88 – 32,338.00 22,022.00 25,636.00 Total 449,000.00 554,000.00 526,000.00 566,000.00 590,050.00 509,000.00 590,000.00 642,000.00 716,000.00 808,000.00 825,722.02 845,930.47 846,049.84 881,363.38 922,456.00 972,045.88 1,041,881.15 1,095,913.55 1,136,340.73 – 1,244,874.00 1,287,910.00 1,357,983.00 Per capita utilization of pork as food (kilogram per person) 9.17 11.03 10.23 10.74 10.92 9.20 10.41 11.05 12.04 13.31 13.26 13.29 13.00 13.31 13.28 14.00 14.72 15.13 15.36 15.91 16.09 16.33 16.88

Source: Bureau of Agricultural Statistics.

as farms holding not more than twenty heads of adult-equivalent animals. Is this the mere workings of the domestic market or could this be attributed to the state’s trade regime? This will be discussed later in the paper.

Protests and Perceived Threats in the Hog Industry


Since 1998, the Philippines has been producing more than 10 million pigs a year. At present, the country’s hog inventory stands at 12.5 million; nearly 80 percent of this number comes from backyard or small-scale hog raisers. The industry’s workforce is estimated at four to five million workers (the backyard hog raisers alone number around four million workers). Despite the continuing increase in production, the price of hog in the market—farmgate, wholesale, or retail price—also continues to go up (figure 3). This implies a rather stable market that could not be easily deterred by a simple price increase. The Department of Science and Technology’s Swine Information Network argues that “the preference of Filipino consumers for fresh warm or chilled pork over frozen pork gives the local industry market assurance of its products” (Swine Information Network 2003). It must be also pointed out that pork accounts for about 60 percent of the country’s total meat demand and has consistently dominated other livestock industries in terms of volume and value of production. Hogs remain the largest source of meat in the country’s livestock industry, making up about three-quarters of Philippine livestock production with a PHP 92.67 billion value of production in 2003. As of 2004, hogs represent 15.14 percent of the total value of agricultural production based on current value. However, the Philippines’ undeterred population growth and its continuing urbanization—the prime drivers of pork consumption—may in the end trigger the hog industry’s downturn. Hogs and people will compete for land and water. As more areas become urbanized, lands previously allotted to hog farming will give way to the people’s housing requirements and health concerns. With limited area for hog production, the government might strongly consider pork importation. It will be then that the domestic hog industry will fully feel the brunt of the liberalized trading environment. Thus, unless new technologies and policies are enacted with this scenario in mind, the domestic hog industry might be enjoying a false sense of confidence on the Filipinos’ love for pork.


People, Profit, and Politics

Figure 3. Average price of hog in the Philippines, 1980-2004

300.00 250.00 200.00 Prices in 150.00 100.00 50.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004


199019911992199319941995199619971998199920002001200220032004 Year
Farmgate Price Wholesale Price Retail Price

Source: Bureau of Agricultural Statistics.

Industry Structure and Stakeholders

Habito (2002) identifies seven major stakeholders in the domestic hog industry: the hog farmers (both commercial and backyard), the farm workers, the feed millers (both large—and usually organized—integrators, and the smaller and usually independent feed millers), the consumers, the government, the nongovernment organizations (NGOs), and the country’s trading partners in the international market. The meat processors, slaughterhouse operators, and the hog and meat dealers can be added to this list. The hog farmers, in their attempt to make their business profitable, would like to have a sure and inexpensive access to inputs necessary in growing hogs, like feeds, biomedical supplies, capital, and labor. A secure and steady growing market must also complement the hog farmers’ low production cost if maximum profit is to be gained. The same sentiment will be true among farm workers. The farm workers are expected to be

Protests and Perceived Threats in the Hog Industry


strong allies of the hog farmers since the former depend on the latter for their job and income security. As the provider of one of the most basic production components, the feed millers’ interest is expected to be closely aligned with the hog farmers’. And like the hog farmers, the feed millers’ main interest is to secure a sufficient and stable supply of raw materials coupled with an ever-expanding market, i.e., the hog farmers. Habito’s (2002) inclusion of the country’s international trading partners as one of the key stakeholders in the hog industry is quite telling of the issues that the industry faces owing to globalization:
Figuring prominently in the landscape are the country’s trading partners, who normally want to ensure easy access to the domestic market, in order to maximize their own citizens’ sales, and therefore incomes, obtained from the trading relationship. At the same time, they would prefer to restrict access to their own domestic markets by their foreign trading partners, for the sake of protecting the economic interests of their domestic citizens. While distant, these particular stakeholders can prove to be more powerful and influential than those who are within the country itself.

Given the dynamics of the domestic hog industry, it will not be hard for some foreign traders to exert their influence on the domestic hog industry. For instance, most of the commercial hog farmers and feed millers look favorably on corn and soya imports, the same way meat processors support meat imports. This does not mean, however, that they all are in the same boat. Hog farmers and feed millers strongly oppose any increase in meat importation since this will lower the price of pork in the market. The meat processors’ usual retort: they will not go for the imported meat if the domestic supply of pork is adequate and reasonably priced. More than asking for an adequate supply and reasonable price, hog and meat dealers and slaughterhouse operators are also after a high price of pork since their income rests on processing hogs and preparing pork for consumption. However, in a limited locale, having a high supply of hog


People, Profit, and Politics

usually causes a dip in retail price. To remedy the situation, hog and meat dealers must rely on their initiative and business acumen to create a situation in which profit could be realized. The most common way to achieve this is to link areas with a high supply of hog to those with low hog production yet with a high number of pork consumers—thus the flow of hogs from rural and peri-urban areas into the city. The government and the NGOs (the civil-society actors) are supposed to mediate the interaction of the previously mentioned stakeholders as they also continuously engage each other on issues concerning the industry. This is not, however, to imply that they are on an equal footing. In most issues confronting the industry, the power to decide and to enforce those decisions rests on the government. The civil-society actors can only try to influence this decision the best way they could. The consumers ideally should benefit from the action of all these stakeholders, that is, they are able to obtain quality pork products at a low price.

Globalization and the Hog Industry
If the Philippine hog industry is driven by domestic factors like population growth and urbanization, what issues confronting the industry could be clearly attributed to globalization or to its reigning economic form, trade liberalization? Current literature argues that in the current liberalized trade regime, the local livestock industry as a whole is at risk because of the rapid increase in meat and meat products importation (Bello 2003; Mendoza 2003; Obanil 2003; Yabut-Bernardino 2002; The Philippine Star, October 27, 2002). These studies, however, must be taken with a bit of skepticism despite their engaging polemical tone that lash out on trade liberalization. These studies give undue emphasis on the dramatic increase in meat importation but do not correlate this with the continuously increasing total domestic hog production, the price of hog and pork that does not taper off, and the continuing penchant of Filipinos for pork as seen in per-capita pork consumption (table 1 and figures 1 and 2).

Protests and Perceived Threats in the Hog Industry


An Industry in Peril?

In two industry situationers made by the Swine Information Network (2003) of the Department of Science and Technology (DOST) and the Livestock Development Council (2002) of the Department of Agriculture (DA), only one issue rooted in trade liberalization was identified: the threat of meat imports. Left unmentioned, however, was the twin evil of meat importation: the smuggling of meat products. Yet, even if the discussion is limited to pork importation, the situation is disturbing if taken from the point of view of the hog raisers:
In terms of carcass weight equivalent, total pork imports grew by 76 percent annually from 1995 to 2000. (Note: The year 1995 was a watershed as the quantitative restriction on pork imports was lifted.) The highest advance was posted in 1996 when the FMD outbreak bloated pork imports by more than 250 percent from only 2,000 tons (carcass equivalent) in 1995 to 7,000 tons in 1996. Imports further went up in later years following the lifting of import restrictions. Tariff on pork products is 30 percent at inquota volume and 60 percent at out-quota volume in 2001, down from 30 percent and 100 percent in 1995. Tariffs will converge at 30 percent in 2004. From 1990 to 1994 (pre-GATT period) the average growth rate of total hog imports was -7 percent. This increased to 134 percent during the post-GATT period of 1995 to 2000. The major sources of frozen pork (carcasses/half carcasses, hams, shoulders and cuts) were Denmark, Canada, United States, Korea and Australia. This means that, strategically, the swine industry must address the threat of imports. (Livestock Development Council 2002)

In the presence of all these low-priced meat imports, a shift in consumption pattern may occur where pork from domestic farms will be less preferred by consumers owing to its relatively high retail price compared to low-priced beef, buffalo meat, and poultry meat imports. Another development in hog production also endangers the viability of domestic hog farmers. This is the “establishment of large-scale (1,000 to 120,000 sow level) integrated pig farms by foreign investors in free port zone[s] using imported breeder stocks, technology, and other production


People, Profit, and Politics

inputs, [which in effect] is an indirect importation of pork with minimal or no tariff at all” (Swine Information Network 2003). Are these developments which are perceived to be detrimental to the local hog industry already taking their toll? To effectively answer this question, it is necessary to properly sketch the trade policies underpinning the domestic hog industry.
Trade Policies

Since the inception of Tariff and Customs Code in 1957, the local hog industry has experienced varying degrees of trade protection from the government. Using the tariff imposed on products in direct market competition with pork, i.e., imported pork, live hogs, and processed meat, it is reasonable to argue that from 1957 to 1986, the local hog industry was minimally protected. Then, an increasing degree of trade protection was instituted from 1986 to 1995. However, this protection has steadily gone down and would soon reach a very minimal level due to the country’s WTO commitments ratified in 1995 (table 2) (Habito 2002). Tariff rates on imported pork, hog, and processed meat have shown steep climbs and sudden dips. However, regardless of the tariff protection, domestic hog production and pork consumption have grown steadily. In 1980, domestic production stood at 448,000 metric tons, at present 1.3 million tons; in 1980, the average annual pork consumption of a Filipino was 9.17 kilos; now, around 17 kilos a year (see table 1). Though this cannot be considered as an incontrovertible proof, the growth in domestic hog production and pork consumption supports the view that the domestic demand has been strong enough to beat the previous threats of meat and hog imports (and smuggling). Whether this will still be true after 2009 remains subject to inferences and the usual economic projections. In making these projections, two particular trade agreements must be strongly considered: the ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA-CEPT) and the country’s commitments to the WTO.

Protests and Perceived Threats in the Hog Industry


Table 2. Tariff protection for the hog industry
Year Pork 1957-1972 1972-1980 1980-1986 1986-1991 1991-1993 15 10 5 20 30 0 10 – Percent of tariff imposed on products in direct market competition with pork Live hogs Processed meat 0 (corned beef only) 100 –

– – 30 (except breeding – animals which were levied a 3 percent tariff ) – – 40-60 (depending on weight) – – – – 35-45 0-5

1993-1994 1994-1995 1995-1997

50 40 30 (MAV in-quota) 100 (MAV out-quota)

1997-2004 2004 2009

30 (MAV in-quota) 60 (MAV out-quota) 30 (MAV in- and out-quota) 0-5

Sources: Habito 2002; Yabut-Natividad 2002.

AFTA-CEPT By 2010, the six original member-countries of the ASEAN—Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand— will be levying a 0-5 percent tariff rate on most commodities being traded among them as part of their Common Effective Preferential Tariff (CEPT) scheme (ASEAN Secretariat 2002, 1). Newer members like Vietnam, Laos, Myanmar, and Cambodia will follow suit not later than 2015. This is in line with the establishment of an ASEAN Free Trade Area (AFTA), which the ASEAN agreed upon in 1992. The AFTA aims to “eliminate tariff barriers among the Southeast Asian countries with a view to integrating


People, Profit, and Politics

the ASEAN economies into a single production base and creating a regional market of 500 million people. The agreement on the CEPT scheme of the ASEAN Free Trade Area requires that tariff rates levied on a wide range of products traded within the region be reduced to no more than 5 percent. Quantitative restrictions and other nontariff barriers are to be eliminated” (ASEAN Secretariat 2002, 1). AFTA-CEPT covers manufactured and agricultural products. However, the lowering of tariff rates on tradable commodities will not be done in one blow.
The CEPT is the mechanism by which tariffs on goods traded within the ASEAN region, which meet a 40 [percent] ASEAN content requirement, will be reduced to 0-5% by the year 2002/2003 (2006 for Vietnam, 2008 for Laos and Myanmar, and 2010 for Cambodia). The tariff reductions are moving ahead on both the “fast” and “normal” tracks. Tariffs on goods in the fast track were largely reduced to 0-5% by 2000. Tariffs on goods in the normal track will be reduced to this level by 2002, or 2003 for a small number of products. Currently, about 81% of ASEAN’s tariff lines are covered by either the fast or the normal track. (Unites States-ASEAN Business Council 2005)

Besides the “fast” and “normal” tracks in tariff reductions there are also three ways of including or excluding a tradable commodity in the CEPT scheme. A tradable commodity can be put in the temporary exclusion list, classified as a sensitive agricultural product, or be generally excluded from the whole scheme. Products under the temporary exclusion list are those that comprised the bulk of an ASEAN country’s tradable commodities and whose tariffs will be lowered to 0-5 percent by 2003. Those listed as sensitive agricultural products are commodities produced by ASEAN member-countries that they want to delay inclusion in the AFTA. “A small number of sensitive agricultural products will be extended a deadline of the year 2010 for their integration into the CEPT scheme. In an agreement that has yet to be fully spelled out, the process of tariff reduction on these products will begin between 2000 and 2005, apparently depending on the country and the product” (Unites States–ASEAN Business Council 2005). An ASEAN member-country has an option also to totally exclude some commodities from the CEPT. This exclusion is usually availed by membercountries for reasons of “national security, protection of human, animal or

Protests and Perceived Threats in the Hog Industry


plant life and health, and of artistic, historic, and archeological value” (ASEAN Secretariat 2002, 2). However, Habito explains that “those products in the Exclusion List were to remain subject to the previously existing ASEAN Preferential Tariff Agreement (ASEAN-PTA) which provided for Margins of Preference (MOP) or progressively increasing tariff discounts on the tariff rates imposed on other ASEAN members” (2002). With the Philippines classifying fresh pork and poultry meat as sensitive agricultural products, tariff reductions on these commodities will not happen until 2009. Thus, the full impact of the AFTA-CEPT on the domestic hog raisers is still to be felt. WTO In ratifying the GATT-Uruguay Round Treaty in 1994, which includes the Agreement on Agriculture, the Philippines was expected to comply with the following: 1) Increase market access and transparency through tariff binding and tariff reduction and replacing quantitative import restrictions with tariffs. Reduce and eliminate trade-distorting export subsidies and domestic support subsidies. Harmonize sanitary and phytosanitary standards to avoid using these as discriminatory measures against imports.

2) 3)

All these requirements were supposed to integrate fully for the very first time the Philippine agricultural trade into a global and multilateral trading system. Except on the issue of agricultural subsidies—with the government hardly providing any to domestic agricultural producers— the Philippines has assiduously complied with the two other terms, particularly on the issue of market access.
Market access commitments involve 1) the removal or conversion into tariffs of all quotas; 2) the introduction of minimum access volumes (MAV), which allow for the importation of a certain quantity of imports at lower tariff


People, Profit, and Politics

rates; 3) a ceiling for tariff rates (tariff bindings); and 4) tariff reductions. The Philippines has more than complied with its WTO commitments on tariff bindings and tariff reductions. With EO 288, tariffs on nonsensitive agricultural products averaged 14.1 [percent] in 1996, and reduced to 4.8 [percent] in 2003. Note that the 1996 actual average tariff was lower than the 43 [percent] average in 1995 base rate committed to the WTO. Clearly, the actual average tariff reductions from 1996 to 2003 would be much lower than the average tariff reductions committed to the WTO, which should have been higher than actual prevailing tariff levels. (dela Cruz, Paderon, and Bautista 2004, 9)

Though considered sensitive agricultural commodities, pork and poultry meat, corn, and other feed grains have been subjected to MAVs. Previously, these commodities were protected from imported products through quantitative restriction. However, as Habito (2002) noted, “notwithstanding all this, the Philippines has consistently imported less pork and poultry meat than what the MAV stipulates, since its ratification of the WTO agreement.” This means that the threat of imports to the domestic hog industry has not yet fully materialized. The local swine industry can be in direr straits than where it is now. What remains unstated in all the predictions of doom concerning the local hog industry are the benefits that accrue from the current liberalized trade regime. As mentioned above, corn and other feed grains were also placed under the MAV rule. About 80 percent of the capital input of hog raisers goes to corn and other feed grains. Placing these production inputs under MAV means their steady and relatively cheaper supply (compared to the locally sourced corn, which has been perennially in low supply) (see table 3). Increased corn importation, however, will adversely affect local corn growers. Thus, unless the government make certain initiatives to increase domestic corn production and link it directly with the needs of the local hog industry, the players in the local swine industry can always claim to be pummeled by meat imports (legal or smuggled) as they in turn trample on barely subsisting corn farmers. This will lead to the absurd scenario for armchair economists: watching which industry will go first to the pits.

Table 3. Corn supply and utilization, 1978-2002 (in thousand metric tons)
Gross supply Total Kg./Yr. 3456.00 3475.00 3558.00 3768.00 3981.00 3926.00 3751.00 4326.00 4522.20 4575.00 4683.00 4988.00 5337.70 5256.82 20.07 0.09 76.00 71.79 0.08 74.00 0.07 75.00 0.24 74.00 3039.00 3067.00 3195.00 3434.00 3365.05 0.14 72.00 3036.00 0.27 70.00 2631.00 194.00 205.00 214.00 221.00 231.00 244.00 247.12 0.11 64.00 2393.00 162.00 0.03 63.00 2436.00 156.00 0.01 68.00 2485.00 170.00 993.99 951.97 949.89 999.73 968.06 1017.76 1026.93 1349.72 982.11 1093.49 0.08 66.00 2313.00 164.00 988.92 0.00 64.00 2118.00 152.00 1005.00 20.80 19.96 19.57 18.29 17.80 18.29 17.29 17.74 17.49 22.46 15.97 17.39 0.00 64.00 1994.00 153.00 1006.00 21.39 0.00 64.00 1848.00 155.00 1005.00 21.95 60.12 58.59 56.99 54.69 53.63 50.10 48.78 50.10 47.36 48.62 47.91 61.53 43.77 47.65 Grms./day 384.00 258.00 219.00 236.00 264.00 319.00 182.00 431.00 241.00 230.00 293.00 138.20 601.50 459.30

Year Per capita

Beginning Production Imports stock



Feeds and Processing Wastes

Net food disposable

Ending stock





































Protests and Perceived Threats in the Hog Industry






















Table 3, cont.
Gross supply Total Kg./Yr. 5078.80 5035.55 4724.59 4553.14 4746.24 4900.41 4608.00 5204.75 5195.43 4886.48 4774.90 0.36 47.91 0.15 49.73 2941.26 2807.52 0.25 50.21 2932.22 0.08 52.84 2979.98 611.58 601.78 603.64 576.19 0.17 47.08 2485.07 510.01 0.02 54.52 2816.07 577.94 0.02 54.71 2698.35 553.78 1178.98 1129.15 1094.97 1322.36 1421.28 1114.31 1109.92 0.07 53.85 2683.54 550.74 1075.45 0.04 60.12 2937.55 602.87 907.41 13.22 15.73 16.85 15.78 14.97 17.69 18.58 14.30 13.96 0.02 62.99 3118.64 640.04 1009.47 15.43 0.00 66.63 3002.29 616.16 1156.73 18.00 49.32 42.27 36.23 43.11 46.18 43.24 41.01 48.47 50.90 39.18 38.25 Grms./day 237.00 204.40 216.60 189.50 260.40 322.70 470.70 237.90 189.70 177.40 233.00 Per capita Exports Seeds Feeds and Processing wastes Net food disposable Ending stock


Beginning Production Imports stock

























People, Profit, and Politics





















Source: Bureau of Agricultural Statistics. *Preliminary data

Protests and Perceived Threats in the Hog Industry


Globalization and the Civil-Society Actors in the Hog Industry
In the 1990s, with the advent of trade liberalization-induced globalization and its perceived negative impact on the domestic hog industry, hog farmers (mostly commercial hog raisers—i.e., with more than twenty heads of hogs in their farms) and feed millers have proved to be the most organized and influential stakeholders in the industry. They have learned to flex their muscle as civil-society actors lobbying for protection of the hog industry.
Setting the Stage for State-Civil Society Relations in the Context of Globalization

Two factors intersect to serve as the grid for the state-civil society relations in the domestic hog industry sector in the context of globalization. The first factor is the willingness of the post-Marcos Philippine state to engage civil-society actors in designing its policies and in implementing its programs, thus conferring on its actions a constant veneer of democratic legitimacy. The second is the presence of strong organizational and business networks in the hog industry and their prior experience in building cooperatives even before the restoration of democratic space after Marcos’s authoritarian rule. Laws of engagement The 1987 Constitution, in its declaration of principles and state policies, affirmed that the “State shall encourage non-governmental, community-based, or sectoral organizations that promote the welfare of the nation.” Article 13 of the constitution contains the role and rights of people’s organization. The framers of that constitution perceived people’s organizations as being those that enable the people “to pursue and protect, within the democratic framework, their legitimate and collective interests and aspirations through peaceful and lawful means.” Given that role, section 16 of article 13 of the constitution stipulates that “the right of the people


People, Profit, and Politics

and their organizations to effective and reasonable participation at all levels of social, political, and economic decision making shall not be abridged. The State shall, by law, facilitate the establishment of adequate consultation mechanisms.” Corollary to this provision is section 14 of article 10 of the constitution. This section considers nongovernment organizations, together with local government officials and regional heads of departments and other government offices, as key actors in the regional development councils which the president shall create. These regional development councils are part of “administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region.” For Magadia “these many provisions in the basic law of the land set a precedent in the Philippine constitutional history, which for the first time explicitly opened spaces for nongovernment participation in regular politics” (2003, 31). Echoing the 1987 Constitution’s normative pronouncement on people’s organizations and NGOs is Republic Act 8435, or the Agriculture and Fisheries Modernization Act (AFMA) of 1997, which can be considered the key policy of the Philippine government relating to globalization and the agricultural sector as a whole. As patently stated in its full title: “An Act Prescribing Urgent Related Measures to Modernize the Agriculture and Fisheries Sectors of the Country in Order to Enhance Their Profitability, and Prepare Said Sectors for the Challenges of Globalization Through an Adequate, Focused and Rational Delivery of Necessary Support Services, Appropriating Funds Therefor and for Other Purposes” (emphasis added). On its list of objectives, Section 3 of AFMA specifically mentions the role of civil-society actors in the agricultural sector:
d) To encourage horizontal and vertical integration, consolidation, and expansion of agriculture and fisheries activities, group functions, and other services through the organization of cooperatives, farmers’ and fisherfolk’s associations, corporations, nucleus estates, and consolidated farms and to enable these entities to benefit from economies of scale, afford them a stronger negotiating position, pursue more focused, efficient, and appropriate research and development efforts and enable them to hire professional managers;

Protests and Perceived Threats in the Hog Industry


e) To promote people empowerment by strengthening people’s organizations, cooperatives, and NGOs and by establishing and improving mechanisms and resources for their participation in government decision making and implementation;

Regarding civil society, these particular objectives indicate that the state is cognizant of two things: 1) civil-society actors will play a key role in the state’s effort to modernize agriculture, and 2) it is the state which will set the rules on how this touted partnership will proceed and where they will occur in the body politic based on its understanding of globalization. It must be noted, however, that globalization, the context of this engagement between the government and the civil-society in the field of agriculture, was never defined anywhere in the AFMA. If the context of the engagement was not defined, then it is expected that the putative engagement would be marred by contestation and confusion rather than cooperation, more so if the civil-society actors are organizationally prepared to contest the state. Industry players as civil-society actors The ability of hog farmers to vigorously respond to challenges confronting the industry can be traced to the presence of long established business associations (e.g., the Philippine Association of Hog Raisers Inc. [PAHRI], the National Federation of Hog Farmers Inc. [NFHFI], and the National Federation of Hog Raisers [NFHR]) and cooperatives (e.g., Limcoma Multi-Purpose Cooperative, Iloilo Hog Farmers Multi-Purpose Cooperative, Soro-Soro Ibaba Development Cooperative) that provides an organizational structure to the industry. Civil-society actors in the hog industry have not limited themselves to lobbying members of the legislative and executive branches of the government through formal dialogues, letter-writing campaigns, and attendance in hearings and sectoral consultations. They fully appreciate the power of the media, thus they have aired their concerns over time through press releases. In addition, to prove that they are also willing to pour the necessary resources, they even place full-page ads on the nation’s


People, Profit, and Politics

leading dailies to present their side to the public (see, for example, Limcoma Multipurpose Cooperative’s full-page ad on the November 20, 2002, issue of the Philippine Daily Inquirer). The emergence of the Agricultural Sector Alliance of the Philippines (ASAP) in 2001, with majority of its members being feed millers’ and hog raisers’ associations and cooperatives, civil-society actors in the industry have shown their ability in coalition building, which would enable them to launch a more confrontational posture against the state. The meat and hog dealers also organized themselves in 2004, and the Meat and Hog Dealers Association of the Philippines (MHDAP) was formed. MHDAP, together with the Slaughterhouse Operators Association of the Philippines (SOAP), would figure prominently in a meat holiday in March 2004. Despite acts of alliance building, civil-society actors in the hog industry also contend among themselves. This must not be viewed, however, as petty intramurals, all noise, and smoke and mirrors. “Contentious politics in a fragile democracy can have contradictory results. By its ability to mobilize and empower disadvantaged sectors, it can enhance democratic governance by enforcing more transparent and accountable ruling procedures. On the other hand, by overwhelming political institutions with oftentimes difficult demands and bypassing institutional frameworks of claim-making and governance, contentious political actions can put under severe stress the minimum conditions of consensus and accommodation necessary for democratic contestation” (Rivera 2002, 472).
Grappling with Globalization

Two particular cases highlight the preliminary engagement of the local hog industry players cum civil-society actors with the state on trade liberalization issues: the enactment of EO 470 in 1991 and the Senate ratification of GATT-WTO provisions on MAV. EO 470 When the Aquino administration enacted tariff reforms in 1990 “to address the traditional bias of macroeconomic policies against agriculture

Protests and Perceived Threats in the Hog Industry


while protecting industry and manufacturing” (Habito 2002), the hog industry players cum civil-society actors were able to secure favorable measures that shielded the industry from foreign competition (table 2).
EO 470 … increased tariff rates on hogs and pork meat, from the previous 10 and 20 percent, respectively, to 30 percent for both. Instrumental to this concession was the strong lobbying by the hog grower associations in the country. These organizations came out with full-page newspaper advertisements during the deliberations on EO 413 [the original executive order where EO 470 was based], warning that the executive order was going to “sound the death knell” of the domestic hog farming industry. They also lobbied Congress against the general direction of trade liberalization. These and other lobbies prompted the five-year phase-in that was eventually provided in EO 470. (Habito 2002)

MAV rule At the Senate’s deliberation on the WTO Agreement in 1994, the Philippine Association of Broiler Integrators (PABI) and the National Federation of Hog Farmers (NFHF) discovered that the MAVs committed for pork and poultry meat, along with sugar, were much higher than what would have been intended by the Department of Agriculture. PABI and NFHF argued that the MAV for pork and poultry meat, given the levels of domestic production capacity and projected demand, were about twice what they should have been. The Philippine government blamed the “error” “on unreliable production statistics available at the time the original submissions were made to the WTO secretariat in 1991” (Habito 2002). Efforts were made to make “technical corrections” on the quantity of pork, poultry meat, and sugar that should be subjected to MAV. The WTO accepted the correction on sugar but rejected those for pork and poultry meat. “Not a few attributed the difference in these outcomes to the fact that the United States had no commercial interest in, and therefore did not resist, the correction for sugar. On the other hand, the United States had a close interest in increased access to the Philippine market for US pork and poultry products, and thus resisted the technical


People, Profit, and Politics

corrections being proposed by the Philippine government for these products” (Habito 2002). When the Department of Agriculture (DA) tried to compensate for this error by awarding the MAV allocations to local hog and poultry producers, which in effect gave them the chance to decide how much pork and poultry meat products to import, the US vehemently objected again. In the face of the US protest, the DA wavered in its resolve to provide even a modicum of protection to domestic hog and poultry producers. The DA eventually agreed to award MAV allocations to nonproducers if the local hog and poultry producers were unable to avail themselves of the quota. This is just like saying that if the domestic hog and poultry producers are unwilling to act to its own detriment—i.e., fully utilizing the amount of import, which will not be, or just minimally subjected to tariff thus in direct competition with what they produce—then others can do it for them. “Thus, in this view, it was the US position that ultimately mattered in the outcome of the negotiations” (Habito 2002).
State and Inter-Civil Society Dynamics in the Hog Industry

For the past decade (1995-2005), three interrelated issues have brought the state and the civil-society actors in the hog industry together: zoonotic diseases in the hog industry (FMD in particular), importation (and smuggling) of meat products, and the prices of hogs and pork in the market. In justifying their objection to meat importation, especially from countries that are not FMD-free, hog raisers would repeatedly point to the 1995 FMD outbreak in the country. The outbreak was said to have been caused either by the importation of cattle from Hong Kong (Manila Times, August 5, 1995) or by the 2,000 metric tons of frozen carabeef from India (Flores 1995, 9; Agriscope 1996, 21). The industry suffered around PHP 2 billion in losses due to the FMD. The meat processors who rely on the low-priced imported supply of meat for their profits understandably oppose this stand. They argued that if the domestic producers could meet their demand and the locally produced meat is priced competitively vis-à-vis

Protests and Perceived Threats in the Hog Industry


the imported supply, then they could do away with the imports. The hog raisers countered that they could not lower farmgate prices since they were already selling with a very thin profit margin, if not at a loss. If, however, the government would do something to lower their cost of production, then they could sell the hogs at a lower price. In particular, the hog raisers suggested, the government should lower its tariff on corn and soybeans, primary components of hog feeds. This stance pits the hog-industry players with the civil-society advocates of the corn farmers. Thus, in spite of all the posturing, a virtual stalemate ensues, which also serves as a very uneasy status quo. Foot-and-mouth disease Foot-and-mouth disease’s deadly rampage started in August 1994. By December of that year an FMD epidemic was already raging in Bulacan. A month later, the disease had reached Mountain Province, Pangasinan, Baguio City, Quezon, Batangas, Laguna, and Ilocos Sur (Philippine Daily Inquirer, January 10, 1995). Reports started to surface that some hogs already infected with FMD were still being butchered and sold in the market and at a much lower price than FMD-free pork. If the issue of FMD outbreak was at first treated as something confined to a particular locale, the news of traffic in FMD-infected pork forced the government to face the issue from the vantage point of the national administration. In January 19, 1995, the National Meat Inspection Commission (NMIC) warned parents not to feed their children with the meat of animals afflicted with FMD, saying that the children were more liable to catch the disease than the adults were. However, they qualified their statement by saying that FMD was not fatal to both humans and animals (Manila Chronicle, August 15, 1995). Despite this warning from NMIC, only in February 8, 1995, did the DA finally acknowledge the FMD epidemic by issuing Administrative Order (AO) 3, prohibiting and penalizing the shipment of animals and animal products from regions 1, 2, 3, 4, Metro Manila, and the Cordillera Administrative Region (CAR).


People, Profit, and Politics

Instead of acting decisively on the FMD outbreak, the DA, through Jesus Alcantara, senior agriculturist of the Bureau of Animal Industry (BAI), blamed the outbreak on “the failure of the local government officials to immediately act on the problem” (Alcantara quoted in the Philippine Daily Inquirer, January 10, 1995). Add to this the fact that there was only one local biotechnological company specializing in FMD vaccines, the Riverdale Biological Laboratories. Riverdale Biological Laboratories deployed twentyseven veterinarians in Luzon and Mindanao and conducted its treatment and control program for free (Manila Chronicle, January 22, 1995; Manila Chronicle, August 15, 1995). By February 1995, BAI was still waiting for imported FDM vaccines, which were expected to arrive in March or April 1995. This scarcity forced the hog growers to buy expensive antibiotics and commercial disinfectants. Some unscrupulous biomedical suppliers even sold them fake FMD vaccine, which was priced at PHP 1,900 a vial (The Philippine Star, February 8, 1995). More than six months after the FMD outbreak, the BAI was still waiting for the 300,000 doses of imported FMD vaccine and the release of PHP 15-16 million allotted by President Fidel Ramos to FMD-afflicted areas. Then-President Ramos issued EO 251 approving the release of around PHP 20 million to stop the spread of the disease. However, controlling FMD was not only a matter of resources, but also of vigilant policing of hog and pork traffic. Victor Atienza, chief of the animal health division of BAI, blamed the local government units (LGUs) for the continuing spread of FMD. He said that the LGUs were not enforcing the quarantine on a twenty-four-hour basis (Philippine Daily Inquirer, June 5, 1995). Then the situation got more desperate. In June 1995 it was reported that in Pampanga, due to lax monitoring of the FMD-afflicted animals, the meat of FMD-infected animals has found its way to the longaniza makers and public markets of Pampanga and Bataan. The attempt to cash in on FMD-laced meat was a result of the inability of local governments to buy FMD vaccines that made the spread of FMD seem uncontrollable. In San Fernando, Pampanga, for example, 3,000 heads of swine died from

Protests and Perceived Threats in the Hog Industry


FMD since the local government only had PHP 300,000 for FMD vaccines, an amount good only for around sixty heads of animals (Manila Times, June 29, 1995). With the public paranoid about contracting FMD from pork, the retail price of pork went down by as much as PHP 5 by July 1995. A year after the outbreak of FMD, industry players cum civil-society actors led by the National Hog Raisers Group Inc. (NHRGI) claimed that the annual household consumption of pork in the country had gone down by 75 percent due to fears of FMD. Loretta Galang, NHRGI president, said that this decline in pork consumption translated into a PHP 2 billion loss for the hog industry. Thus, she made an appeal to the public and the government to save the industry. Galang appealed to the public to “take a sober look at the FMD situation and save the multibillion-peso industry from the peril of being wiped out by unfounded fears” (Galang quoted in The Philippine Star, August 4, 1995). She issued this appeal in view of the official assessment of the departments of health, agriculture, and science and technology, saying that FMD was not a public-health hazard since it was extremely rare for humans to suffer FMD fatally. She also urged the government to launch a massive information campaign aimed at reassuring the public that most of their fears of FMD were baseless. To compliment this effort, Galang also called on the government to “deploy meat inspection agents in at least the largest markets in the country to strengthen confidence in the quality of meat products sold in the market” (Galang quoted in The Philippine Star, August 4, 1995). In strengthening the consumers’ confidence in locally sourced pork products at the height of the FMD outbreak, the industry players had indeed only the government to turn to. As Galang explained, “It’s hard for the private sector to convince consumers that it’s safe to eat pork, because they might have the misimpression that we’re only doing it in order to cope up [sic] with huge losses we incurred from the FMD scare” (Galang quoted in Agriscope 1996, 21). As hog industry players cum civil-society actors pleaded for government support, they could also not refrain from criticizing the government not


People, Profit, and Politics

only for its ineptitude but also for corruption. Galang accused LGU officials of withholding the fund allotted to combat FMD and diverting this fund for their own personal and political purposes (Manila Times, August 5, 1995). She said that the government earmarked PHP 300 million for the implementation of measures against FMD; however, only the measly sum of PHP 20 million had been released to the industry. Carlito Calimlim, general manager of the United Swine Producers Association, also scored the LGUs for failing to deploy veterinarians and meat inspectors who could have checked the spread of FMD (Manila Times, August 5, 1995). By August 1995, BAI admitted that it would take at least three years to neutralize FMD. Only after a year did the hog raisers start recouping their losses. By August 1996, the Bureau of Agricultural Statistics reported that retail prices of pork, chicken, and a number of basic commodities continued to soar in Metro Manila and key provincial markets. The BAS reported that pork is PHP 94-105 per kilo, up from PHP 85-98 by end of January 1996 (Manila Times, April 27, 1996). Importation and smuggling of meat products The issue of meat imports is related to the issue of FMD in the sense that when FMD was starting to taper off, Galang called on the government to bring to an end the importation of carabeef to prevent the recurrence of FMD outbreak in the country (Agriscope 1996, 21). The same line of reasoning would be reiterated over the years. In 2004, almost eight years after the FMD epidemic, Albert Lim, president of the National Federation of Hog Farmers Inc. (NFHFI) and the Negros Occidental Hog Raisers Association, made a similar demand. He called for a stop to carabeef importation from India, saying that it would endanger the hog industry and other livestock since India was an FMD-contaminated country with not a single zone classified as FMD-free by the Office International des Epizooties (Visayan Daily Star, February 21, 2004). A related line of reasoning employed by the domestic hog-industry players doubling as civil-society actors was to treat smuggling and excessive importation of meat, specifically carabeef, as related issues that would

Protests and Perceived Threats in the Hog Industry


ultimately lead to the collapse of the local hog industry on which around 4.25 million individuals depended for their livelihood (The Philippine Star, November 17 and November 24, 2002; Manila Times, November 26, 2002). In November 1998, the National Federation of Hog Farmers, Inc. (NFHFI), a nonstock, nonprofit umbrella organization of autonomous associations, with a total individual membership of more than two thousand hog farmers, issued a letter to then-President Joseph Estrada on the use of carabeef by fast-food chains. They also informed the president about the imported carabeef flooding the local meat market (Philippine Daily Inquirer, November 12, 1999). Three years later and under a new administration, Nemesio Co, national chairman of the National Federation of Hog Raisers (NFHR), in an October 2002 letter to then-DA Secretary Edgardo Angara, was still making an appeal to the government to act on the issue. He said that importation and smuggling had resulted in lower demand for locally produced pork which, in turn, led to record-low levels of farmgate prices of hogs. In particular, he blamed this situation on dumping of processed meat and carabeef (The Philippine Star, October 27, 2002). Co said that they felt “so helpless, cheated, and violated that imported carabeef, which is supposed to be for the exclusive use of meat processors, [is] being dumped in the country in volumes heavens know how large; they have even gone to the legitimate trade routes of the wet markets, supermarkets, and canteens. Even their packages, which are supposed to be burned, are being sold at junkshops in violation of the rules on quarantine procedures” (Co quoted in The Philippine Star, November 24, 2002). To prod the government to act on their behalf, some industry players even argued that in not helping them, the government must not also expect any reciprocal gesture from their part. An example of this tact is a statement from Albert Lim Jr., NFHFI senior vice chairman. He said, “The downside of this unwanted scenario is the program of creating one million jobs is being tremendously compromised because our business is losing to smuggling and dumping. So, instead of expanding our operations and hiring more people, we cannot do that anymore. Some people are destined


People, Profit, and Politics

to lose their jobs if the government cannot check the rampant illegal activities of some traders” (Lim quoted in The Philippine Star, November 24, 2002). However, no decisive action was seen from the government. Besides writing to Angara, Co also wrote to Sen. Ramon Magsaysay and Rep. Alfredo Marañon, chairmen of the agriculture committee at the upper and lower houses of Congress, respectively. He appealed for assistance “to create legislation to regulate the excessive entry of meat importations coming into the Philippines” (Co quoted in Manila Times, November 26, 2002). It was in the midst of these unheeded appeals from the two largest organizations of hog raisers, i.e., the NFHFI and the NFHR, that the Agricultural Sector Alliance of the Philippines (ASAP) was formed. ASAP was registered with the Securities and Exchange Commission (SEC) on January 6, 2003, with Nicanor Briones of Limcoma Multipurpose Cooperative, the largest agricultural cooperative in the Philippines, as chairman. In its engagement with the government, ASAP would employ a more sustained and sometimes confrontational stance. Exactly a month later, it would already be leading a meat blockade in Metro Manila. In the same week that ASAP registered with SEC, it issued a press statement saying that in protest of the government’s failure to stop illegal meat importation and smuggling, it intended to stop supplying pork to the metropolis for about a week. A rally with “a parade of pigs along Mendiola Street near Malacañang and throwing of eggs on the road as a sign of protest was also planned to coincide with the meat holiday” (Briones quoted in The Philippine Star, January 10, 2003). The pork stoppage occurred on February 6-8, 2003, spearheaded by ASAP and “supported by the NFHFI–Nemesio Co wing (where Albert Lim is president), some members of the NFHFI–Gabby Uy wing, also some members of PAHRI [Philippine Association of Hog Raisers Inc.] and several independent raisers/associations in Bulacan, Tarlac, and Rizal [e.g., Livestock Association of Pandi]” (Locsin 2003).

Protests and Perceived Threats in the Hog Industry


However, the meat holiday eventually fizzled out without any immediate and serious positive response from the government. Then-DA Secretary Luis Lorenzo merely countered ASAP’s claim of smuggling by saying that 125 container vans of smuggled meat and vegetables were confiscated and some officials of the NMIC and the Bureau of Animal Industry had been reshuffled. For her part, President Gloria Macapagal Arroyo ordered the Bureau of Customs to phase out bonded warehouses; she also called on Congress to declare smuggling a heinous crime punishable by death. With one of its more combative stances over, ASAP would also even engage perceived power brokers close to the president to petition the removal from their post of certain government officials who they deemed to be favoring interests detrimental to the hog industry. An example of this case would be their effort to have the president’s husband, Mike Arroyo, help them secure the removal of DA Undersecretary Cesar Drilon. They thought Drilon heavily favored meat importers and meat processors and this is because he was on the take (Briones 2004). They also alleged that he was involved in technical smuggling. Mike Arroyo, however, refused to meet with the group. Prices of hogs and pork In the first quarter of 2004, two major issues animated the civil-society actors in the hog industry: the increasing importation of carabeef from India, an FMD-contaminated country (aggravated by rampant meat smuggling), and the high farmgate prices of hogs. The high farmgate price of hogs, as claimed by the hog raisers, was due to the high cost of production, especially the cost of feeds. The meat and hog dealers said that this high farmgate price made their enterprise unviable. As early as January 2004, there were already rumors of a meat holiday. Thus on January 23, 2004, the industry stakeholders meet with President Arroyo and managed to come into an agreement “to adopt a voluntary price hike moratorium at two levels, the farmgate price at PHP 82 a kilo of live weight and the retail price at PHP 125 a kilo for liempo” (Department of Agriculture 2004).


People, Profit, and Politics

Luis P. Lorenzo Jr., then-DA secretary, considered the moratorium a major breakthrough as this is the first time that the different groups sat down and thoroughly discussed problems affecting the different levels of the pork-supply chain. This would prove, however, to be merely a stopgap measure. Things came to a head in March 2004. On March 4, 2004, MHDAP and SOAP called for a three-day meat strike in Metro Manila (Inquirer News Service, March 4, 2004; Today, March 4, 2004). The threat of a meat strike was considered serious enough by Malacañang that it appealed to MHDAP to call off the meat holiday. MHDAP and SOAP still went on with its meat strike. Though not entirely successful in paralyzing the supply of pork in the metropolis, they got the government’s attention and compelled the concerned agencies to act on the problem (The Philippine Star, March 6, 2004). On March 9, 2004, to prevent a similar situation in the future, the DA discussed a marketing tie-up with the SOAP and the NFHF. Lorenzo said the arrangement would enable slaughterhouse operators to purchase directly the live weight hogs from the farms. In the current trade setup, dealers directly purchase the live-weight hogs from the farms and bring them to the abattoirs, which charge PHP 50 for every head. The dealers then deliver the dressed meat to the market. The MHDAP admitted that each member of the group earned a daily average of PHP 5,000 from the transaction (dela Cruz 2004). To address the issue of high production cost, President Arroyo announced on March 10, 2004, that she would authorize the duty-free importation of 350,000 tons of corn up to the end of 2004 and an unlimited amount of soybeans for the next six months to ease domestic pork shortage (Philippine Daily Inquirer, March 11, 2004; The Philippine Star, March 10, 2004). This seemed to be win-win solution, at least for the hog-industry players (to the consternation, of course, of those in the corn industry). What was curious, however, was the declaration of a domestic pork shortage by the president. In so doing, she also allowed a duty-free importation of 10,000 tons of pork.

Protests and Perceived Threats in the Hog Industry


A PHP 1,700 feed subsidy was also given on March 30, 2004, to around 98,000 backyard hog raisers affected by the high cost of feed. The subsidy was given to hog raisers in Batangas, Rizal, Pampanga, Bulacan, Ilocos, Negros Occidental, Negros Oriental, Iloilo, Aklan, Antique, and Capiz (Manila Bulletin, March 30, 2004; Today, March 31, 2004). As before, this situation pitted one group in the local swine industry against the other. MHDAP was up against ASAP and the SOAP (The Philippine Star, March 6, 2004). ASAP, the National Federation of Hog Farmers Inc. (NFHI), and the National Federation of Hog Farmers of the Philippines (NFHFP) were feuding with the Philippine Association of Meat Processors (PAMPI) (Manila Times, April 5, 2004; Philippine Daily Inquirer, February 23, 2004; Manila Times, April 23, 2004). ASAP and NFHI accused PAMPI of making false claims that there was a meat shortage in order to justify their demand for an increase in meat imports. For their part, the meat processors argued that they were providing cheap protein source to Filipino consumers since the imported meat cost less than the locally sourced ones. ASAP and NFHI alleged that the importation, in particular, of carabeef from India endangered the local swine industry since India was not an FMD-free country. They also added that since the local market was being flooded with meat imports (legal and smuggled), the hog raisers were also being forced to cut down on production in order to stabilize the farmgate price of hogs. When it undertook that step, it was accused in turn by the MHDAP of creating a shortage to jack up the price of hogs (Philippine Daily Inquirer, March 7, 2004). When the news of “hot meat” started appearing in the news, ASAP in turn accused the pig buyers of floating this news in order to scare consumers away (Manila Times, April 23, 2004). This “disinformation campaign” brought down hogs prices (Today, April 22, 2004). The government responded to this situation by bringing together in a dialogue the different civil-society actors in the local swine industry (The Philippine Star, March 6, 2004) and coming up with new tariff measures aimed at lowering the production cost of hog raising, in particular lowering the tariff on corn and soybeans, primary components of livestock feeds


People, Profit, and Politics

(Philippine Daily Inquirer, March 11, 2004; The Philippine Star, March 10, 2004). Backyard hog raisers comprising about 77 percent of all hog raisers were also given feed discounts (Today, March 31, 2004). The government also imposed stricter measures in importing meat and livestock to protect the country from animal diseases. PAMPI resented this measure. The meat processors maintain that it was uncalled for and would merely make the importation process longer, thus eating up more of their time and resources (BusinessWorld, June 22, 2004; Manila Times, April 5, 2004). To appease the meat processors, the Bureau of Customs was studying the possibility of lowering the tariff on pork imports (Today, July 8, 2004), which the hog raisers, in turn, would surely oppose (Today, April 20, 2004).

Without the claim of representing a certain constituency that is supposed to be at a disadvantage in the current trade regime, i.e., the estimated four million backyard hog raisers, nothing separates the civilsociety actors in the hog industry from profit-fixated interest groups that lobby the government for advantageous deals. This is not, however, to disparage what civil-society actors from the business sectors can accomplish. As O’Connell points out, “The business sector is another undervalued partner in civil society. Many businesses are not renowned for civility and social conscience, but those that accept and fulfill social responsibility contribute significantly to the quality of community and civil society” (2000, 473). That the civil-society actors in the local hog industry are market players themselves prefigures the issues that will serve as the milieu for state-civil society relations in the context of globalization. The state-civil society engagements in the hog industry have focused on issues that concern the industry actors’ economic viability. This sentiment is true both for the hog raisers (both small-scale and commercial) and for the hog dealers. The strongest indicator of this condition is how the issue of prices (farmgate and retail) predominates the state-civil society engagements; both the

Protests and Perceived Threats in the Hog Industry


necessity to recoup the expenses in raising and dealing hogs, and that profit must also be realized. Though the pronouncements of civil-society actors in the hog industry continuously reiterate the crisis they are in, the continuously increasing volume of production, domestic consumption, and retail price cast doubt on this claim. If the articulated condition seems to differ from what is actually happening in the market, this could be largely explained by the situation in which large industry players double as civil-society actors. Large industry players are more susceptible to fluctuations in volume and price of trade commodities. And being large businesses they could easily engage the state, formally or informally, since they could utilize the organizational resources of the business organizations that they independently belong to. Viewed, however, from another perspective, this organizational and financial advantage of industry players constituting themselves as civilsociety actors exposes the inequality among actors in the hog industry. As Friedman notes, “Where societies are significantly unequal, civil society will be a realm of inequality since some will command greater resources to organise than others, and most citizens will probably find participation in civil society associations beyond their means. A central error of the ‘civil society as virtue’ paradigm is to confuse the site of action with those who act in it, the players with the playing field” (2003, 10). For its part, the state, notwithstanding it’s avowal of partiality toward civil-society actors, can only do so much in the current multilateral and global trade regimes. Globalization—or its avatar, trade liberalization—has a dual effect on state-civil society relations. Globalization unleashes new economic problems at the domestic level that forces the state and the civil-society actors to engage each other. This engagement, however, hardly results in a mutually acceptable solution since areas for possible compromise or for calibrated response have been pushed to the margins by the very onslaught of globalization. Others, however, take the opposite view. They argue that it is the “traditional political groups…now joined by commercial and civilsociety groups in creating push and pull factors that inhibit state action


People, Profit, and Politics

on a number of policy areas, particularly on economic reform. The issue of a ‘meat crisis’ in the Philippines in early April 2004 illustrates how these groups seem to force the government into certain policy tracks that may be contradictory to its commitments to economic liberalization” (Kraft 2003, 142). This comment is rather symptomatic of the neoliberal focus on democratic governance that is “less concerned with issues of sovereignty and power than with creating efficient institutional structures to facilitate the operation of the market” (Reid 201, 788). Moreover, this assessment gave too much weight to what commercial interests qua civil-society actors can accomplish. The telling example concerning the hog industry is not the “pig holiday” but the issue of technical correction on MAV. Civil-society actors in the hog industry were able to prod the government on their behalf to correct the error on the assigned MAV on meat imports. Still, the government’s attempt to secure protection for the hog industry was effectively shot down by one of its most influential trading partners, the US. Then globalization, at least in this case, can be said to undermine the stability of democratic states if the “stability of democratic regimes is at least partly a function of the degree to which autonomous associations are allowed to influence the state” (Silliman and Noble 1998, 306-7). To fully realize the democratizing potential of civil-society actors in the hog industry and their indispensable role in crafting socioeconomic policies, it is also necessary to have a state that can still decisively respond to civil-society actors and their competing claims. Unfortunately, the state’s capacity to engage the civil-society actors is being undermined by trade agreements previously entered into by the government, and other governing mechanisms of the globalized trade regime.

Agriscope. 1996. Carabeef import ban sought. Agriscope, April 21. Association of Southeast Asian Nations (ASEAN) Secretariat. 2002. Southeast Asia: A free trade area. Jakarta: ASEAN Secratariat.

Protests and Perceived Threats in the Hog Industry


Bello, Walden. 2003. Multilateral punishment: The Philippines in the WTO, 19952003. Manila: Stop the New Round Coalition and Focus on the Global South. Briones, Nicanor. 2004. Interview by Joel F. Ariate Jr. Tape recording. November 3. Costales, Achilles C., and Christopher L. Delgado. 2002. Synthesis of changes impacting on participation of smallholders in the growing meat market in the Philippines. In Delgado and Narrod 2002, Annex 3. WAIRDOCS/LEAD/X6115E/X6115E00.HTM. dela Cruz, Joseph Leland, Marissa Paderon, and Germelino Bautista. 2004. Trade liberalization and agricultural policy in the Philippines. In Trade liberalization, agriculture and small farm households in the Philippines: Proactive responses to the threats and opportunities of globalization, 6-13. Silang, Cavite: International Institute of Rural Reconstruction. dela Cruz, Roderick T. 2004. DA to reduce influence of local meat dealers. March 9. Delgado, Christopher L., and Clare A. Narrod. 2002. Impact of changing market forces and policies on structural change in the livestock industries of selected fast-growing developing countries. Final research report of Phase I - Project on livestock industrialization, trade and social-healthenvironment impacts in developing countries. International Food Policy Research Institute and Food and Agricultural Organization of the United Nations. HTM. Department of Agriculture. 2004. Hog raisers, meat vendors agree to voluntary price moratorium. Flores, R.E. 1995. Unang payo ni Mang Pandoy: Lutasin ang problema ng livestock industry! Filipino Magazin, August 28, 9-10. Friedman, Steven. 2003. The state, civil society and social policy: Setting a research agenda. Politikon 30 (1): 3-25. Habito, Cielito F. 2002. Impact of international market forces, trade policies, and sectoral liberalization policies on the Philippines hogs and poultry sector. In Delgado and Narrod 2002, Annex 4. LEAD/X6115E/X6115E00.HTM. Kraft, Herman Joseph S. 2003. The Philippines: The weak state and the global war on terror. Kasarinlan: Philippine Journal of Third World Studies 18 (1-2): 133-52.


People, Profit, and Politics

Livestock Development Council. 2002. Industry situation: hogs. hogsit3.html. Locsin, Ignacio G. 2003. Letter to the editor. Philippine Star, March 27, 17. Magadia, Jose. 2003. State-society dynamics: Policy making in a restored democracy. Quezon City: Ateneo de Manila University Press. Mendoza, Maria. 2003. Women in the livestock and poultry industry. Farm News and Views (1st quarter). livestock_industry.htm. Obanil, Rovik Santiago. 2004. The dilemma of tariff-free corn imports. Farm News and Views (2nd quarter). current_issues/fnv_3.htm. O’Connell, Brian. 2000. Civil society: definitions and descriptions. Nonprofit and Voluntary Sector Quarterly 29 (3): 471-478. Reid, Ben. 2001. The Philippine democratic uprising and the contradictions of neoliberalism: EDSAII. Third World Quarterly 22 (5): 777–93. Rivera, Temario C. 2002. Transition pathways and democratic consolidation in post-Marcos Philippines. Contemporary Southeast Asia 24 (3): 466-83. Silliman, G. Sidney, and Lela Garner Noble. 1998. Citizen movements and Philippine democracy. In Organizing for democracy: NGOs, civil society, and the Philippine state, ed. G. Sidney Silliman and Lela Garner Noble, 280-312. Quezon City: Ateneo de Manila University Press. Swine Information Network. 2003. Industry status. http:// United States (US)-ASEAN Business Council. 2005. The ASEAN free trade area and other areas of ASEAN economic cooperation. afta.asp (accessed June 20, 2005). Yabut-Bernardino, Natividad. 2002. The impact of agricultural trade liberalization in the Philippines. International South Group Network (ISGN). http://

Confronting the Challenges in the Garment Industry


Confronting the Challenges in the Garment Industry
Ma. Glenda S. Lopez Wui


s an economic phenomenon, globalization is often defined as the “radical transformation of the economic environment at the local, regional and global levels through the promotion of an open international economy characterized by an overwhelming increase in trade, investment and financial flows” (Frago, Quinsaat, and Viajar 2004). As the globalized arrangement is characterized by an increasing reduction of barriers in trade and investment, governments in developing countries take advantage of this by creating a domestic environment favorable to foreign investments while encouraging local industries to become more export oriented to take advantage of the opening of markets abroad. However, critics point out that such setup is not at all conducive to long-term development. Foreign investors can easily fly out of the host country when the latter ceases to provide them the optimum environment for capital accumulation. Moreover, emphasis on export would give less attention to the development of a domestic market for local products. Although the emphasis on export could create more employment for the local workforce because of bigger markets abroad, problems nonetheless arise if importing countries begin to tap other sources offering better-quality and -priced goods. This problem is what the local garment industry is currently facing with the emergence of countries (especially China) that produce garments more


People, Profit, and Politics

efficiently. Likewise, the possibility of losing more markets is being feared with the impending expiration of the Multi-Fiber Arrangement (MFA) and the ascension of the garment trade to the rules of the World Trade Organization (WTO). The garment industry experienced growth in the past three decades because of the MFA as its quota system gave garment manufacturers in the country assured markets for their products abroad. Through the MFA, garments became a major dollar earner for the country. In January 2005, however, the agreement expired and the trade in garments will subsequently be governed by the rules of the WTO. Under the WTO, Filipino manufacturers will have to compete with other producers from all over the world for markets. Given the high cost of producing garments in the country, many are not very optimistic about the ability of the industry to survive the competition. It is said that more than half of the roughly 320,000 workers (Garment and Textile Export Board) employed by the garment industry will be adversely affected by the expiration of the MFA. Of the total number of garment workers, around 75 percent are women. The problem faced by the industry is compounded by the fact that it does not have a strong domestic market to speak of. During the 1980s, the domestic market consumed at least one-third of the country’s total garments production.1 However, this share eventually dwindled over the years because of imported products entering the country both through legal and illegal means. Analysts point to government’s drastic reduction of tariffs and its inability to curb smuggling as reasons why foreign products dominate the local market at the expense of our producers. Tariff rates for garment products coming from Association of South East Asian (ASEAN) countries are placed at 5 percent, while those from outside ASEAN are placed at 15 percent (Dela Cuesta 2005). Considering the high cost of producing garments in the country, local producers cannot compete with the imported products given these tariff rates.2 As to the problem of smuggling, one study conducted in 2000 concluded that almost half of the volume of imported textiles and garments

Confronting the Challenges in the Garment Industry


enter the country illegally.3 Another problem threatening the garment industry is the prevalence of ukay-ukay or the trade in secondhand clothing. These secondhand clothes are from Western consumers who want to get rid of unwanted clothes via donations to charitable institutions in developing countries. However, only a small portion of the goods end up in charitable institutions or used in relief operations; the “lion’s share is sold to used clothes dealers and exported to developing countries, where it is sold off at market prices” (International Textile, Garment and Leather Workers’ Fedearation). This case study aims to examine how civil-society groups engage the state to advance the interest of the local garment industry and its workers in the context of globalization. Specifically, the paper will examine initiatives of civil-society organizations that were put up in connection with the expiration of the MFA and current problems besetting the garment industry. The paper also attempts to analyze the resources and means of intervention utilized by the civil-society groups in their interaction as well as assess their success not only in affecting policy change but in shaping the discourse for their agenda. The factors that shaped the outcome of the interaction will also be examined by the paper. The first part of the paper provides a situationer on the garment industry. The second part discusses the perceived effects of globalization on the industry, while the last part analyzes state-civil society interaction on issues concerning the industry. For a more empirically grounded analysis, the study made use of available data and information on the subject from previous studies, documents, and statistical data on the industry, as well as Internet sources. Interviews with key informants from civil-society groups (mostly trade unions) and government were also conducted.

Garment Industry Situationer
The International Context

The growth of the garment industry in the Philippines can be understood against the backdrop of what is happening at the global level, in particular, the internationalization of the division of labor.


People, Profit, and Politics

In the global production of garments and textiles, it is noted that “change is taking place in the location of world production of textile and clothing” (Field cited in Pineda-Ofreneo 1989, 7). An increasing quantity of textiles and garments are manufactured in the Third World “with the relocation of labor-intensive operations to areas where manpower is cheap, abundant and preferably docile.” Pineda-Ofreneo (1989) noted that this global restructuring has two implications: the exploitation of cheap labor in less developed countries for the manufacture of clothing exports to the advanced capitalist nations, “which extract the most profits from the undertaking,” and the “increasing pressure in the industrial countries to limit imports especially those coming from third world producers in order to protect domestic industry and employment” (Field cited in Pineda-Ofreneo 1989, 7). In the late 1970s when there was a boom in textile and garments production in developing countries, textile and clothing industries in the US and Western Europe suffered job losses. The jobs in these countries went to developing countries like the Philippines where the major push for export and employment was dictated by outside economies. This can be explained by the logic of the global market economy:
In the system of internationalization of production dominated by the transnational corporations based in the United States, Japan and Western Europe, the role of the developing economies is to be “1) the geographical site of labor-intensive manufacturing for worldwide markets, 2) the supplier of low-priced consumer products, and 3) the source of cheap labor.” Three main factors have made this possible: 1) the virtually inexhaustible worldwide reservoir of potential labor found mostly in Asia, Africa, and Latin America, where workers earn wages roughly 10-20 percent only of those of their counterparts in the advanced industrial states; 2) the development of modern transport and communication technology which makes possible the relocation and control of operations over wide geographical distances; and 3) “job fragmentation” or the breaking down of complex operations into simple units so that even unskilled workers can perform them (Frobel et al., as quoted in Pineda-Ofreneo 1989, 8).

Confronting the Challenges in the Garment Industry


Transnational companies (TNCs) are the facilitators of the globalization of production or the internationalization of the division of labor. TNCs are said to have put in 80 percent of foreign direct investment and employ around 27 million workers in several export processing zones (EPZs) in developing countries (Gills 2002, 111). Since the 1970s, governments in Asia have been competing for the favors of transnational capital. As a result, there has been an increase in EPZs and free-trade zones in which “social and environmental standards are lowered while social subsidies to capital are increased, for example through offering financial and other investment incentives by the host governments. The general historical outcome of this process has been an increase in the rate of exploitation of labor” (Gills 2002, 110). Since women make up 70 percent of workers in EPZs in Asia (as well as in the Philippines), they are therefore mostly the victims of exploitation. Although the intensification of the export manufacturing sector generates much-needed jobs in developing countries, it also involves intense competition to attract foreign investments. This in turn results in the tendency toward “increase in the level of labor exploitation, via lower wages and longer working hours, with very little job security.” Moreover, because of the facility of its transfer, capital tends to move away in countries with improved working conditions to less developed economies. This in turn “creates a tendency toward increase in a downward pressure on wages, as expressed in the race-to-the-bottom syndrome” (Gills 2002, 112). Gills summarizes the effects of globalization of production on Asian women:
In global factories, the capital-labor relations for Asian women are becoming more exploitative and oppressive in the process of globalization of production. The flip side of the race to the bottom is the corporations’ incessant search for ever-cheaper labor. As a consequence of these two processes, the labor conditions of many women in contemporary Asia are coming to resemble those of an earlier era of industrialization in the West, characterized by sweatshops, that is, high levels of exploitation.


People, Profit, and Politics

Development of the Local Garment Industry

The garment industry in the Philippines “started as a basically subcontracting re-exporting industry where raw materials are shipped from abroad for processing (cutting, embroidery, sewing etc.) and then reexported. Part of the production process goes into the factory but the bulk is sub-contracted to cottage-type producers” (Philippine Trade and Development cited in Pineda-Ofreneo 1989, 1). The export-oriented embroidery manufacturing was introduced in the Philippines in the late nineteenth century. By the early twentieth century during the US colonial rule, women and children laborers from the traditional garment-producing areas of Rizal, Bulacan, Cavite, and Batangas were already producing embroidered garments. “By 1919, embroidery had grown to be one of the most successful industries promoted by the Americans in the Philippines, and by 1930, embroidered articles has become one of the country’s top ten exports” (Pineda-Ofreneo 1989, 1). Before the 1960s and the popularization of RTW or ready-to-wear clothes, garments were largely produced for the domestic market and done mainly by household-based tailors and dressmakers (Ofreneo et al., 1996). But in the 1970s, the garment industry started to venture into large-scale export. It was during this period when the industry began to experience unprecedented growth. From 1972 to 1980, the export of garments from the Philippines grew an average of 30 percent per year. This prompted the World Bank (WB) to hail the garment industry in its 1979 World Mission Report as “the most dynamic industry in the Philippines.” The WB likewise regarded garments as “the cornerstone of the remarkable growth in nontraditional exports witnessed through the 1970s” (cited in Ofreneo et al. 1996, 39). In the early 1980s, however, the industry experienced a slump due to the political uncertainties. Because local garments manufacturers are highly dependent on imported fabrics, the foreign-exchange crunch reduced production by an average of 12.2 percent from 1981 to 1985. About 95 percent of our garment industry’s fabric and textile requirements are imported because the price of local textiles is relatively higher than the

Confronting the Challenges in the Garment Industry


prevailing world price (Austria 1994, 10).4 The second half of the 1980s, however, saw the recovery of the garment industry (Cororaton 1997, 8). Since then, the industry consistently posted growth, becoming the country’s second-top dollar earner next to electronics. To compete in the international market, the government enacted several laws for the industry.5 With the incentives provided by government for garment manufacturers and the relatively low labor cost, foreign companies (especially those from the US) were encouraged to set up business in the country. By the late 1960s and early 1970s, a number of foreign-owned garment corporations had set up operations in the Philippines. But while the garment industry was able to participate in the international trade, it was still unable to take advantage of the growing market opportunities unlike the other major exporters like Hong Kong, Taiwan, and South Korea. With this lost opportunity of becoming a major garments exporter, the Philippines had to contend with a more protectionist environment enforced by the United States (the country’s major export market) and the European communities (Austria 1994, 12-13), as exemplified in the MFA. From 1974 to December 2004, the MFA governed the Philippine garments exportation. Under the MFA, importing countries set quotas on the entry of textiles and garments into their countries. Generally, the terms and conditions regarding the application of quotas are embodied in a Bilateral Textile Agreement between importing and exporting countries. Although quotas are set for our garment exports, it was under the Agreement that we were assured of markets for our products. Hence, it was during the MFA years that our garment industry experienced growth and expansion (Hutchison 2001). However, with the abolition of the MFA and the ascension of the garments trade to WTO rules, the Philippines is up against countries offering lower costs and faster deliveries of products to buyers (Austria 1994, 10).6

The Garment Industry in the Era of Globalization
This section discusses the opinions of key informants on the effects of globalization on the garment industry. Globalization here refers to the


People, Profit, and Politics

period starting when the industry underwent accelerated trade, particularly evident during the MFA years. The responses are categorized under economic, political, and social dimensions.7
Economic and Political Dimensions

According to the respondents from civil-society groups, one of the main problems facing the industry is the government’s unbridled support for trade liberalization (Velez 2005; Mendoza 2005; Arellano 2004; Caños 2004; Aniesgado 2004; Honculada 2004). In particular, they criticized the government’s policy of readily lowering the tariffs for imports without regard for its effects on the local industry. The proponents of trade liberalization believe that hastening the reduction of tariffs and allowing imported products easy access to our market will force our industries to compete and be more efficient. However, this did not happen to the garment industry at all. Some respondents emphasized that instead of prioritizing trade liberalization, government should first focus on developing our local industries (Arellano 2004; Honculada 2004; Mendoza 2005). Government should realize that without adequate support, our local industries cannot develop, much less compete with imported products. As the Fair Trade Alliance (FTA) put it, “our industrial and agricultural producers are asked to be globally competitive, price- and quality-wise, even if they suffer serious handicaps—poor and expensive infrastructures, inaccessible formal credit, high cost of power and utilities, unfriendly bureaucracy, unstable currency, and a generally difficult economic environment” (Fair Trade Alliance 2003, 16). With tariff reduction, our domestic market has been flooded with imported products, which are usually sold at lower prices. Because of high production costs, local manufacturers simply cannot lower their selling price to match that of imported goods. Although the presence of cheap imported products may benefit the consumers in the short term, this will not be good for the economy in the long term. Companies are forced to close shop because of decline in sales and losses, thereby

Confronting the Challenges in the Garment Industry


resulting in the retrenchment of workers. With this, a greater portion of the population are left with no purchasing power. Aside from products legitimately entering the country, our local garments face stiff competition from garments smuggled into the country (Honculada 2004; Adviento 2004; Arellano 2004). The inability of government to put a stop to smuggling further compounds the problems of the garment industry. One analyst gave the following reasons why our market is flooded with cheap imports: “the trade liberalization commitments of the Philippines to the IMF (International Monetary Fund), WTO, and AFTA (ASEAN Free Trade Area); the inability of the customs and police to apprehend bigtime smugglers; and the failure of the government, mainly the Tariff Commission, to stop foreign dumping of their excess products” (Ofreneo 2003, 42). Government’s inability to act on the problems encountered by the garment industry has resulted in factory closures and relocation to cheaper sites in Asia and the Carribean, or downsizing the Philippine operations since the late 1990s (Ofreneo 2003, 42).8
Social Dimension

In examining the social effects of globalization, it can be seen that the phenomenon has been both beneficial and detrimental to the garment industry. The discussion in this section mainly focuses on the labor issues and possibilities for civil-society networking afforded by the globalized environment. Labor problems Although some of the problems encountered by the workers were there even before the so-called era of globalization, the respondents perceive that these have currently intensified (Castro 2004; Caños 2004; Aniesgado 2004). Most garment workers receive wages way below the required living standard even as they work for long hours to meet quota requirements. Contractualization has also become rampant (National Commission on the Role of Filipino Women 2003). Some of the respondents from the


People, Profit, and Politics

labor groups believe that corporations resort to contractualization to skirt laws on security of tenure and workers’ benefits (Caños 2004; Aniesgado 2004).9 Companies have also engaged in labor flexibilization, “which entails the unbridled use of labor subcontracting and hiring of casual, part-time, temporary and contract workers” (Viajar 1997, 156). While Ofreneo (2003) wrote that flexibilization “comes in the form of multi-skilling, allowing companies to maximize the utilization of talents of these workers through multi-skilling and related HRM (human resource management) programs. The complaint of unions and many workers is that such multi-skilling exercise leads to work intensification without any corresponding increases in compensation” (47). The prevalence of subcontracting in the garment industry has also led to the increase in the number of subcontracted workers.10 In the Philippines, a substantial number of subcontracted workers do their work at home. The latter are also known as homeworkers. In the garment industry, women make up most of the workers in the informal sector. As informal workers, they work without secure contracts, worker benefits, or social security/protection (Lund and Nicholson 2003, 15). Social security covers the core contingencies of health care, incapacity for work due to illness, disability through work, unemployment, maternity, child maintenance, invalidity, old age, and death of a breadwinner (Lund and Nicholson 2003, 17). According to Teresa Soriano, director of the Department of Labor and Employment-Institute of Labor Studies (DOLE-ILS), because of the desire of company owners to save on costs in order to face up to the intense global competition, they are wont to save on labor cost so that they could invest in other elements of production. Soriano (2004) elaborated:
As competition becomes more heated because of globalization, companies must apply cost-cutting measures in order to survive. Of the four elements of production (materials, machines, manpower, and time) it is always manpower and time to produce (which is also related to manpower), which has to be sacrificed since the cost of materials and machines are production inputs which are non-negotiable.

Confronting the Challenges in the Garment Industry


Table 1. Cases of occupational injuries in textile and garment establishments employing 20 and over, 2002
Total With lost workdays number of Total cases (fatal, Nonfatal Total (without nonfatal, (fatal Fatal lost Total Permanent Temporary and without and (nonfatal) incapacity incapacity workdays) lost workdays) nonfatal) Manufacture of textiles Manufacture of wearing apparel















Source: Department of Labor and Employment–Bureau of Labor and Employment Statistics.

Expenses for occupational safety and health are also often sacrificed in favor of other production expenses (Adviento 2004). Costs for the protection of employees are considered as additional expense and not investment. However, it is ironic that employers do not realize that a safe and healthy working environment can contribute to productivity as “accidents, diseases, or death in the workplace can be very costly and can cause serious repercussions on the overall performance of the company” (Soriano 2004). The latest data from the Department of Labor and Employment-Bureau of Labor and Employment Statistics (DOLE-BLES) show the extent in which occupational safety is sacrificed by some employers (table 1). The actual figure for occupational injuries and fatality could be more than the figures shown below because of underreporting. With regard to the wages of the workers, one respondent said that employers often cite intense global competition as the reason why companies cannot comply with the rates mandated by labor laws (Casaña 2004). Other respondents added that employers often tell their workers that they should not complain because workers in China, for example, receive a lower minimum wage than they do. However, the respondents pointed out that the Philippines should not be compared with China. Even though Chinese


People, Profit, and Politics

workers receive lower minimum wage than the Filipinos, the social welfare incentives provided by their government (e.g., health care, children’s education) more than make up for the wage difference (Caños 2004; Aniesgado 2004). Garment workers also face job insecurity due to possibility of more closures of factories and capital and investment flight with the expiration of the MFA, and the inability of companies to survive stiff global competition.11 Moreover, the use of computer-aided technologies such as in embroidery contribute to job insecurity as some companies have begun to retrench workers whose input can be replaced by machines (NCRFW 2003). 12 The respondents also bewailed the discrimination experienced by women in the garment industry (Caños 2004; Aniesgado 2004). According to a study conducted by United States Agency for International Development (USAID), Solidarity Center, and Trade Union Congress of the Philippines (TUCP) Anti-Sweatshop Project (2002), women experience the following forms of discrimination in some export processing zones: preference for single over married women, pregnant women having miscarriages because they are not moved to assignments appropriate to their condition, not being allowed to go back to work after giving birth, and sexual harassment. International solidarity campaigns One positive factor singled out by the respondents is that globalization has enabled them to network with other organizations based abroad (Castro 2004; Adviento 2004; Casaña 2004). Their networking with other international organizations helped them to learn from the campaigns taken by other groups abroad and eventually apply these to the local situation. These campaigns usually center on the social responsibility of the corporations, particularly their responsibilities toward their workers. An example of these campaigns is the Clean Clothes Campaign.13 Local chapters of international organizations have also been put up in the Philippines. With this, workers in the garment industry have been

Confronting the Challenges in the Garment Industry


benefiting from the advice and expertise of the international organizations on how to conduct their advocacies. For example, the International Textile, Garment and Leather Workers’ Federation (ITGLWF) has a local chapter in the Philippines.14 Moreover, because of international networking, trade unions in the country can report to multinational companies violations committed by local contractors for possible sanctions. A multinational company usually has a corporate code of conduct, a written statement of principles, labor practices, a corporate environment, which the MNC has adopted in its outsourcing operations overseas. “The MNC commits that its contractors, sub-contractors and suppliers will comply with the MNC code on pain of reduction or withdrawal of orders” (USAID, Solidarity Center, and TUCP Anti-Sweatshop Project 2002, 30).15 Civil-society groups are not the only ones making use of the campaigns; government has likewise made use of these to instill social responsibility among local manufacturers. For instance, the Garment and Textile Export Board (GTEB) provided incentives to garment companies that were able to secure certification from the Worldwide Responsible Apparel Production (WRAP) and the Social Accountability International (SAI). Such incentives usually take the form of allocating quota for export. WRAP and SAI issue certifications of compliance to companies that follow international workplace norms as set out in the International Labor Organization (ILO) convention and the United Nations Universal Declaration of Human Rights and the Convention on the Rights of the Child (Worldwide Responsible Apparel Production; Social Accountability International). Agreements forged through the efforts of international institutions have also been very useful in setting the directions of the country’s laws with regard to the protection of workers. Employers are obliged by the country’s labor laws, in accordance with international labor standards to protect their workers and provide them with healthy working conditions. The industry and the government are also “obliged to observe international labor conventions such as those mandated by the International Labor


People, Profit, and Politics

Organization (ILO) and WTO.” Violations of the principles stipulated in ILO labor conventions could mean for the Philippines “being shut out of its biggest export markets where trade unions are influential.” In addition, foreign governments or corporations “could impose sanctions if they discover that the exported products are the result of infractions of international labor standards” (Manila Times, July 12, 2003).

Examining State-Civil Society Relations
Several theories have been formulated as to the role of the state in the context of globalization. There are those which espouse that the state has become irrelevant as global institutions are the ones setting directions on how a state manages its boundaries. However, there are those which say that the state is more relevant than ever, especially in the context of the perceived bias of international institutions and rules to favor the more powerful and richer countries at the expense of the poorer ones. The role of states (especially the developing ones) is more relevant than ever to enable them to assert their interests in the international arena. The paper adopts the framework that the state is still very relevant in the context of globalization. The relevance of the state is also emphasized by the fact that civil-society groups direct their campaigns to the former in finding solutions to the problems they encounter in the present context. It is worth noting that in civil-society campaigns to combat the ill effects of globalization, workers and capitalists have joined forces in urging government to undertake appropriate actions to ensure the survival of the garment industry. On some issues, however, workers and capitalists still remain at odds. Issues pertaining to the workers’ welfare have remained the bone of contention between the two parties. Labor groups’ engagement of the state is not new. Labor groups became particularly involved in several antigovernment mobilizations during the Marcos regime; well-known among these mobilizations is the welgang bayan (people’s strike). After President Corazon Aquino’s ascension to power, one of her first acts was to institutionalize labor relations in recognition of the labor movement’s contribution to the downfall of the dictatorship. During

Confronting the Challenges in the Garment Industry


Aquino’s first months in office, in May 1986 and again in May 1987, government sponsored the National Tripartite Conference that gathered representatives from major labor organizations, the management sector, and government experts (Magadia 2003, 67-68). By the time Aquino left the presidency, several tripartite representations have been instituted, for example, in the National Labor Relations Commission, the National Wages and Productivity Commission, the Overseas Workers Welfare Administration, and the Regional Wage and Productivity Boards (Magadia 2003, 82). It is mainly through these agencies that labor groups formally engage the executive branch. Labor groups also engaged the judiciary through the filing of cases against employers. With the party-list system, their engagement in the legislative arena is realized through their party-list representatives. Along with their utilization of the formal venues are the informal engagements that they launch from time to time (usually through rallies and pickets) to get their grievances across government. Recently, various labor groups came together to complete the priority labor agenda for the first one hundred days of President Gloria Macapagal Arroyo. The consultation among the labor groups produced the 2004 document “Towards a Joint Policy Agenda for Labor: Managing the Social Impact of Globalization through Stronger State Adherence to Decent Work.” The document has been presented to various policymakers as well as members of the labor movement. The policy proposals mentioned in the document are meant to address the various problems and disadvantages encountered by workers in the context of globalization. The paper focuses on initiatives conducted starting in 2003 up to 2004 to address the implication of the impending expiration of the MFA and other problems besetting the garment industry. These are the: 1) “Labor Forum Beyond MFA Phaseout” alliance; 2) Bukluran ng Manggagawang Pilipino (Solidarity of Filipino Workers [BMP])-Alyansa ng Manggagawa sa Garment at Textile (Alliance of Garment and Textile Workers [Almagate]) dialogue with the Garment and Textile Export Board; 3) Garments, Textile, and Allied Industries Labor Council (GARTEX Labor Council) spearheaded by the Fair Trade Alliance; and 4) National Commission on the Role of


People, Profit, and Politics

Filipino Women (NCRFW) consultations on safety nets for women garment and textile workers. The first three were initiated by civil-society groups, while the last one was initiated by a government agency but with active participation from civil-society groups. The civil-society initiatives were also chosen because of their members’ formal engagement of government. Labor groups identified with the national democratic movement or the Marxist-Leninist-Maoist strain of the Philippine Left are conspicuously absent in the campaigns. These groups’ formal engagement of government is currently limited to the legislature through their allied party-list representatives from Bayan Muna (People First), Anakpawis (Toiling Masses), and Gabriela Women’s Party. They also mostly utilize informal means of engagement in the forms of “picket-protests and email barrage to concerned government agencies and institutions.” Because of ideological differences, these groups are not comfortable working with those groups earlier identified. Hence, to deal with the problems of garment and textile workers, they have formed the alliance Solidarity of Labor for Rights and Welfare or SOLAR, and the Kababaihan Laban sa Kontraktwalisasyon (Women Against Contractualization) with like-minded organizations.16 The earlier part of this section discusses the agenda of the campaigns, while the latter part examines the civil-society groups’ engagement of the state. The respondents interviewed for the study were all part of either one of the campaigns. One can see that the issues being addressed by the campaigns were related to the perceived problems of the industry as a result of globalization. The information provided in this section was mostly culled from position papers prepared by the four groups whose campaigns are the subject matter of the paper. One will see that although the issues discussed were provided by those from the garment industry, some of these are also applicable to other industries. Market access and trade facilitation One important concern in the agenda of the civil-society campaigns is reforming the Bureau of Customs. Because of corruption in the bureau,

Confronting the Challenges in the Garment Industry


smuggled garments easily enter the country. In addition, manufacturers find it hard to get imported raw materials out of customs because of unscrupulous officials who ask for bribes to facilitate the release of the materials. This causes delay in the manufacturing of the garment products— a situation detrimental to the manufacturers. Importers are very strict about deadlines, such that local manufacturers can face sanctions if they fail to deliver on time. So as to facilitate the immediate release of raw materials, manufacturers are forced to give bribes to customs officials. Among other things, the computerization of the transactions in the bureau has been proposed to avoid personal transactions, which could deter the incidences of corruption and bribery. Moreover, civil-society organizations urge government to utilize the antidumping measures sanctioned by the WTO. According to WTO, dumping occurs when “a company exports a product at a price lower than the price it normally charges in its own home market.” The WTO agreement “allows governments to act against dumping where there is genuine (‘material’) injury to the competing domestic industry. In order to do this the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to do so” (World Trade Organization). Besides the WTO mechanism, the Tariff Commission should also implement RA 8752 or the Anti-Dumping Duty Act to address the dumping of foreign products into the country. Government should also be able to act on the prevalence of ukay-ukay or the sale of secondhand clothing in the country.17 To sustain the local garment industry, civil-society groups have been urging government to embark on a campaign to urge consumers to buy Filipino products. Compared with other developed and industrializing economies (such as Brazil, Malaysia, and China) where governments have been “waving their national flags, asking their domestic consumers to support their domestic producers” (Fair Trade Alliance 2003, 10) to survive in the globalized setup, such a campaign is not assiduously pursued in our


People, Profit, and Politics

country. The Garment and Textile Labor Council of the Philippines (GARTEX) also reiterated that it is important for the industry’s survival to develop a local market base (Dela Cruz 2004). All the respondents also believe that instilling a sense of nationalism among our consumers by urging them to patronize our local products can go a long way in saving our domestic industry. The development of the textile industry is another concern of civilsociety groups. The ability of local garment producers to compete in the world market is largely hampered by the lack of a textile industry that would be the source of raw materials for the garment products. Because of this, about 95 percent of the materials needed for manufacturing garments are imported. Government should therefore put in more resources for research and the development of textiles in the Philippines. Employment The government needs to make a full accounting and registration of contractors and subcontractors in the garment industry. In general, subcontracting, which has become prevalent in the Philippines, is defined as “an industrial or commercial practice whereby the party placing the contract (parent firm, principal enterprise or company) requests another enterprise or establishment (subcontractor) to manufacture or process parts of the whole of a product or products that it sells as its own” (International Labor Office, as cited in Pineda-Ofreneo 1989, 9).18 With the registration, the workers employed by the contractors and subcontractors will be fully accounted for and the employers might be monitored on whether they give the lawful wages and benefits to the workers. Moreover, government should be able to enforce stricter penalties for pseudo cooperatives that take advantage of the workers’ hard-earned money. Cases abound where pseudo-cooperatives collect contributions from unsuspecting members only to be discovered later that the operators have run off with the workers’ money. There is also need for more government support for worker-owned and -managed enterprises. Some workers who lost their jobs after the closure

Confronting the Challenges in the Garment Industry


of their factories have put up their own small garment businesses. TESDA should also take an active role in giving business training for the workers’ enterprises. The Department of Labor and Employment (DOLE) and the Philippine Economic Zone Authority (PEZA) should also be able to assist the entry of workers’ enterprises in special economic zones. In addition to establishing the enterprises, government should also be able to help the workers market their products. As a start, government could direct its offices to buy uniforms for their workers from these workers’ enterprises. The campaigns likewise cover the issue of social protection and safety nets for displaced workers. There should be post-employment programs for counseling, skills training, livelihood and entrepreneurship, and cooperatives. Government could also take on a more active role in job searching and matching for the displaced workers.19 Wage and social protection for the workers There is also need to review the decades-old labor code of the country. One area where the code could be improved is its provisions on union organizing, particularly on the difficulty to form unions in factories. The slow resolution of cases in the National Labor Relations Commission (NLRC) and the National Conciliation and Mediation Board (NCMB) is another problem area identified by the campaigns. The long duration of the cases’ resolution deprives the workers of benefits due them. Regarding wage and occupational and safety measures for the workers, the campaigns ask government to penalize employers for their Social Security System (SSS) arrears. Although employers collect contributions from their workers, some do not actually remit these to SSS. The organizations also demand that government require companies to put up bonds for separation and money claims for the workers. This is in response to cases in which workers are left with unpaid wages and benefits because owners illegally closed the companies. To provide protection for informal or subcontracted workers, one of the recommendations of the labor groups is to expand the coverage of Pag-IBIG and PhilHealth to this sector in addition to the already mandated SSS coverage.20


People, Profit, and Politics

It was also suggested that instead of unions doing their own separate bargaining negotiations, this could be done on an industry basis. Workers in the garment industry could negotiate as one in the bargaining table as is the practice in other countries. This way, the specific needs of the workers in the industry might be better addressed. For example, due to the prevalent subcontracting arrangement in the industry, it is estimated that majority of the garment workers belong to the informal sector who are mostly not unionized and therefore vulnerable to abuse. When the negotiation is done on an industry basis, the welfare of these workers will also be given attention. Moreover, some company owners pay their workers on a per-output basis. However, as one respondent pointed out, there are no existing laws governing the payment of salaries based on outputs; hence, such arrangement is also susceptible to abuse (Mendoza 2005).21 The workers’ need for occupational health and safety measures should also be addressed. Several studies have shown that company owners have been remiss in providing occupational health and safety measures in the workplace. In economic zones, decent and affordable housing should be provided to workers in the area. Age- and sex-based hiring should also be penalized. As for workers who are out of employment, government should “facilitate post-employment programs as well as complementing mechanisms that would give the workers easy access to financial and technical support.” The programs may be “job-career counseling, socio-economic venture, skills training and re-training, entrepreneurship programs, cooperatives and social enterprises” (Labor Forum Beyond MFA n.d.). GTEB and institutional-related reforms With the abolition of the MFA, it is mandated that the Garment and Textile Export Board will also be abolished since the latter was primarily formed to allocate quotas to local contractors. In the advent of the abolition of GTEB, the labor groups suggested that a new office be put up to deal with the garment industry. This office should be tripartite in nature (composed of government, employer, and union representatives); it can

Confronting the Challenges in the Garment Industry


focus on market and trade facilitation, formulation of the industry development plan, and ensuring labor and social compliance of companies in the industry. The Garment and Textile Industry Tripartite Council (which created the GTEB) should be reconvened for the purpose of creating the office. The Quick Response Teams (QRT) of the DOLE should also be strengthened to include representatives from the Garment and Textile Industry Tripartite Consultative Body (GTITCB). The agency could be an important source of information on the problems and issues of the garment and textile industries. QRT is a “strategy to monitor industry closures and retrenchment due to the adverse effects of globalization and economic crises and to provide immediate and integrated package of assistance to displaced workers including their dependents” (NCRFW 2003).
Civil-Society Initiatives

This section discusses the three civil-society initiatives—BMPAlmagate, Labor Forum Beyond MFA, and the GARTEX Labor Council— that have been formed to address the impending expiration of the MultiFiber Arrangement and problems besetting the garment industry. The BMPAlmagate initiative started in early 2004 when the BMP held rallies at the offices of the GTEB, the Department of Trade and Industry (DTI), and DOLE to air the workers’ grievances in the workplace and the illegal closure of factories. The impetus for the protest actions of the BMP and its alliance is the closure of Novelty Philippines in September 2003 that displaced about 2,500 workers. Owners of Novelty Philippines suddenly closed the factory and left the country, leaving the workers with unpaid salaries and benefits. According to Chodie Navea (2005), organizer of BMP’s publicsector workers, their organization made an assessment of the situation in the garment industry after the Novelty closure. BMP decided to do something about the situation since besides Novelty, other factories have shut down operations. According to a BMP study, several factories have shut down operations or reduced the working time of their workers due to liquidity problems (table 2).


People, Profit, and Politics

Table 2. Garment firms experiencing problems in 2003-2004
Establishment Location No. of workers Wintertex Solid Mills Meritlux Asiatex Prima Apparel Sang-Woo Phils Supreme Baby Wear Yam Venture First Quality Karayom A. Bylson Manila Bay Spinning Fairland SB Sales Palmphil Garment Phil Pacific
Source: Espinola [2005?].


Laguna Parañaque Laguna Laguna Laguna Laguna Mandaluyong Laguna Rizal Parañaque Las Piñas Marikina Manila Valenzuela Laguna Parañaque

1,400 1,200 600 200 500 517 200 400 100+ 700 100+ 1,200 115 37 570 300

2 months temporary shutdown Shutdown (October 2003) 3-day rotation 10-days-per-month work 100 workers retrenched Rotation 65 workers retrenched, 4-day rotation 3-day rotation Temporary shutdown (September 2003) Shutdown Shutdown Partial rotation Overtime work without pay 3-day work 200 workers retrenched 200 workers retrenched

BMP’s assessment led to the holding of pickets at the offices of the GTEB, DTI, and DOLE, which are the government agencies concerned with the garment industry. In the pickets, the workers asked government officials to act on the case of the displaced workers of Novelty as well as those of other factories. They also asked government to lay down a comprehensive plan to save the garment industry in the face of the various problems it is experiencing. Because of the pickets, the GTEB was forced to hold dialogues with representatives of BMP and unions affiliated with them. In the dialogues, the workers aired their concerns on issues affecting the workers and the industry.

Confronting the Challenges in the Garment Industry


Meanwhile, the Labor Forum Beyond MFA was formed in early 2003 through the efforts of the International Textile, Garment and Leather Workers’ Federation (ITGLWF) Philippines to examine problems experienced by the garment industry in view of the expiration of the MFA and to prepare the workers for the quota phaseout. According to Annie Adviento, coordinator of ITGLWF Philippines, even before the actual date of MFA’s expiration, the difficulty of competing in the international market is already being felt by the local garment industry as there are a number of factories already shutting down operations. Because ITGLWF is a federation of workers in the garment industry, its members deem it necessary that they be at the forefront in addressing problems encountered by the workers in the sector, especially with regard to the pending expiration of the MFA (2005). Prior to its initiative in the Philippines, ITGLWF sponsored an international conference involving its affiliates in countries to be affected by the MFA phaseout. In the said conference, a plan of action was drawn whereby the ITGLWF national offices will initiate consultations with the trade unions in the garment sector. ITGLWF also assessed that although trade unions are aware and apprehensive about the effects of the phaseout on the workers, nothing substantial is being done about the situation. In early 2003, ITGLWF Philippines initiated dialogues with its member organizations as well as other labor organizations on what should be done to prepare the workers for the quota phaseout. There were twenty organizations which initially participated in the dialogues. The important objectives of the dialogues are for the labor organizations to engage in collective action and assess the efforts of employers and government in connection with the quota phaseout. The initiative was eventually named Labor Forum Beyond MFA. In the dialogues, the forum formulated the eight-point labor agenda. The agenda was later presented to government representatives from the GTEB, DTI, and DOLE. The GTEB eventually took the role of organizing the succeeding dialogues among the representatives of labor, management, and concerned government agencies.


People, Profit, and Politics

In these dialogues, the labor sector was represented not only by Labor Forum Beyond MFA but also by BMP-Almagate and GARTEX. The presentation of the eight-point action plan was very timely because the GTEB at the time was preparing the industry transformation plan. In the GTEB fora, management representatives were also able to air their concerns about the impending MFA phaseout. They expressed that about 70 percent of the 320,000 registered workers will be adversely affected by the quota phaseout. Adviento said that the actual number of workers to be affected is much more as it is estimated that informal workers in the industry easily fall in the 300,000-range. The Garment, Textile and Allied Industries Labor Council is spearheaded by the Fair Trade Alliance and is made up of eighteen labor federations. Formed in November 2004, the council was put up to address the issues faced by the garment and textile industries, including those attendant to the expiration of the MFA. More important, GARTEX is envisioned to take an active role in the preservation and creation of jobs in the industry (Fair Trade Allianc e). According to GARTEX lead convenor Angelito Mendoza (2005), the alliance was also formed to answer the need of putting up an industrywide alliance in the absence of an industry-wide union. This way, the alliance will be able to tackle the problems peculiar to the industry, particularly the workers’. To drum up interest for its campaigns, GARTEX has conducted several dialogues on issues besetting the garment and textile industries with prominent media coverage. In these dialogues, government representatives were often invited. GARTEX also actively participated in government-initiated consultations on issues related to garment and textile. Two important things should be noted regarding these initiatives. First, women are widely represented in these campaigns as they comprise a substantial membership in the groups and federations that put up the initiatives. Second, the media have been very helpful in making the government, including the public, take notice of the issues raised by the labor groups. Many of the fora conducted by the labor groups were covered

Confronting the Challenges in the Garment Industry


by the media. In addition, the series of exposés on garment factories operating as sweatshops brought to the attention of government and the public the exploitation garment workers are subjected to. One prominent exposés is the Anvil garment factory in which the workers were given drugs to stay awake for forty-eight hours straight (Lalata and del Puerto 2003). Media coverage of the rallies staged by labor groups also helped in getting the government’s attention.
Assessing the State-Civil Society Engagement

The respondents were pleased with the willingness of government to dialogue with them. After initiating their engagement with government, the latter took on the role of organizing the succeeding dialogues. They said that although much still has to be done about the problem, the dialogues led to the revival and reestablishment of the Clothing and Textile Industry Tripartite Council (CTITC). Although a tripartite council existed in the 1980s, this was not active at all.22 With the abolition of the GTEB, a lot of groups from the labor and management sectors pushed for the organization of a government office focusing on the garment and textile industries. Hence, the organization of the CTITC was very much welcomed. The mandate of the CTITC includes the following:
(It) shall act as an advisory and consultative body to the DOLE and DTI, labor sector and management sector in terms of policies and programs affecting the clothing and textile industry. As such, it shall endeavor to arrive at a consensus on matters brought to the body for consideration, deliberation and/or resolution. The CTITC shall likewise act as a clearinghouse and documentation center for issues of common interest to government, labor and management by incorporating its discussion in the regular agenda. (Memorandum of Agreement re CTITC, March 2005)

The CTITC comprises representatives from government, labor, and management sectors. The two government representatives are from DOLE and DTI. The labor sector is represented by six representatives from Alyansa


People, Profit, and Politics

ng mga Manggagawa sa Garment at Textile (Almagate), Associated Labor Unions of the Trade Union Congress of the Philippines (ALU-TUCP), Federation of Free Workers (FFW-LACC), Philippine Transport and General Workers Association - Trade Union Congress of the Philippines (PTGWOTUCP), Alliance of Progressive Labor (APL), and National Confederation of Labor (NCL). The respondents expressed satisfaction with the council’s labor composition as the different unions in the garment and textile industries were represented.23 It also helps that employers form part of the CTITC. This way, employers will become aware of the grievances aired by the workers in the council. The ITGLWF was selected by the civil-society groups to act as secretariat for the labor sector. Besides having a venue for tripartite dialogues regarding issues confronting the garment and textile industries, the CTITC can also be utilized by the labor groups for the advancement of their legislative agenda. An example of legislation that needs to be enacted is that requiring companies to put up a trust fund for their employees. This will address the problem of employers leaving the workers with unpaid salaries and benefits when they close shop. Another is the need to rationalize through legislation the wages of workers who are paid on a per-output basis. The CTITC will also coordinate the efforts of different government agencies acting on the problems concerning the workers and the industries. Adviento said that another important output of the interaction, besides the CTITC, is the putting up of the Quick Response Teams, which were established to assist displaced workers or those who are victims of violations. The engagement that transpired so far between the labor groups and the government can be said to be marked by high political catalysis. According to Magadia (2003), political catalysis is the “process of accelerating state-society interaction as both state actors and societal actors send signals of willingness to engage each other in the development of policy.” However, it remains to be seen if this kind of relationship between the state and civil-society groups can be sustained throughout the interaction. The CTITC, which is the main body tasked to oversee solutions

Confronting the Challenges in the Garment Industry


to the problems of the industry and facilitate government engagement with civil-society groups was formed only in April 2005. Given the various problems that need to be addressed in the industry, it is still too early to tell if CTITC will be able to deliver. There are nagging issues to address—for example, the corruption in the Bureau of Customs, smuggling, nonremittance and nonpayment of SSS benefits— but government has yet to act effectively on these problems. A number of the respondents said that although these problems have been brought to the attention of government in the past, nothing significant has been done about them. Even though the success of the interaction between civil-society and the state cannot be entirely ascertained at this time, what can be said is that the actions of civil-society groups forced government to act on the situation. The respondents perceive that government is not doing anything substantial about the situation even though ten years ago it had been fully aware that the MFA was going to expire. Overall, civil-society groups managed the interaction with government because of their capability to mobilize the internal and external resources available to them. Using the framework of resource mobilization and political opportunity structure, the next section discusses in detail how the civil-society groups made use of the resources available to them to advance their agenda. Internal resources
STRATEGIES. In engaging government, civil-society groups utilized both the formal and informal means of intervention in their campaigns. It was earlier shown how the labor groups made use of the formal venues in engaging government. Formal venues are the dialogues and fora organized by government with the NGOs. One feature of a good strategy is its being able to discern the correct venue to engage government to get the most out of the interaction (Wui and Lopez 1997). In the case at hand, it can be said that civil-society groups were able to choose the correct venue—which is the executive branch,


People, Profit, and Politics

in particular the GTEB—because before the labor groups initiated the interaction concrete policies for the garment and textile industries in the context of MFA’s expiration are yet to be drawn up. In engaging the GTEB, therefore, civil-society groups are able to influence government policy directions for the industries. Alongside the formal means, civil-society groups have also been using informal means of intervention in their advocacy vis-a-vis government. Holding of rallies and pickets are resorted to by labor groups (as shown in the case of BMP) to call the attention of government to their issues. These informal means proved effective in some cases as shown in the example of BMP. Their rallies and pickets led the GTEB to hold a series of dialogues with the group. The media have been used extensively by civil-society groups in their campaigns. The respondents said that the media have been effective in making the government aware of issues confronting the industry. Likewise, the media coverage of the rallies and fora conducted by labor groups helped in getting the attention of the authorities. Examples of fora covered by the media are those conducted by GARTEX on the implications of the expiration of the MFA as well as other problems besetting the industry. TECHNICAL KNOWLEDGE. The technical capability of the labor groups can be seen in their being able to detail the problems besetting the garment and textile industries as well as suggesting recommendations on how these might be addressed. These detailed problems and suggested recommendations are partly discussed in the earlier part of the paper. It is worth noting that in the dialogues, labor groups came prepared with wellresearched presentations. Because of this, the labor groups were able to communicate their agenda to government. The technical capability of the people behind the civil-society campaigns is likewise shown in the various public fora they organized. One proof of their technical capability is the fact that the media find these fora worth covering. Also, in various feature articles done on the expiration of the MFA and the state of the garment and textile industries in general, the opinions of the representatives of the labor groups were sought. This extensive media coverage in turn helped

Confronting the Challenges in the Garment Industry


bring the problematic state of the garment industry to the consciousness of government and the public. ORGANIZATIONAL CAPABILITY. The capability of the labor groups to organize themselves is evident in the initiatives they have put up. In the case of BMP and Almagate, at a time when factories were being shut down in succession, they started mobilizing their member-organizations for the holding of rallies and pickets to get government attention regarding the plight of the workers and the industry. ITGLWF and GARTEX also organized their members in their respective federations for the holding of dialogues and fora about issues confronting the garment industry. Because of these actions, government made available several fora for civil-society engagement. The labor groups negotiated with government as one sector, thereby strengthening their position and enabling them to realize some important items on their agenda. Foremost of these is the reactivation of the CTITC, wherein they were subsequently given seats in the council. After their appointments to the CTITC, labor groups have continued to organize themselves and consult each other about the agenda they would push in the body. External opportunities Besides the resources internal to their organizations, the civil-society organizations were able to take advantage of the opportunities presented by their external environment. INSTITUTIONAL OPENINGS. These are made possible particularly by the expanding space for democratic and consultative processes evident in postEDSA governments. In the case at hand, labor groups made use of the openings provided by DOLE, DTI, and GTEB to advance their agenda. Nonetheless, it should be noted that these openings also became possible because of the actions of the civil-society groups. As discussed in the case study, through the pickets and rallies they staged in front of the government offices and their initiatives to seek dialogues with the officials, government made available more venues for the interaction.


People, Profit, and Politics

It is worth noting that civil-society groups’ engagement with the GTEB also opened up opportunities for dialogues with other government agencies. One respondent said that when they were taking up the issue of corruption in the Bureau of Customs, the GTEB invited representatives from the said office to the dialogues. When GTEB was taking up the issue of the failure of management to remit Social Security System (SSS) contributions or the livelihood training for displaced garment workers, it invited SSS and the Technical Education and Skills Development Authority (TESDA) to the conferences (Adviento 2004). KEY ALLIES. Ranking government officials are considered allies of the labor groups, in particular the secretaries and officials of the DTI, DOLE, and GTEB. The respondents from labor groups said that the government officials were very accommodating, even spearheading a number of dialogues with them. In particular, a committee was put up in the GTEB, primarily tasked to facilitate dialogues with the labor groups. Although labor groups have locked horns with their employers on several issues, prominent businessmen in the garment sector who attended the dialogues to air their concerns about the survival of the industry can also be considered allies of the labor sector. The presence of these businessmen certainly helped in pressuring and stepping up the actions of government. Members of the academe have also helped in the campaigns of the labor groups. Their researches on the implications of the expiration of the MFA, which have bolstered the assertions of the labor groups, have been presented in various fora. KEY EVENTS. Civil-society groups launched their campaigns against the backdrop of the impending expiration of the MFA and the closures of garment factories. With the realization of the implication of the agreement’s expiration and the factory closures happening in succession, government has to dialogue with labor groups clamoring for actions on the problems. As mentioned in the earlier part of the paper, many doubt the ability of the garment industry to compete against cheaper and more efficient production sites in a quota-less regime with the expiration of the MFA; hence, the fate of workers numbering by the hundreds of thousands hang in the balance.

Confronting the Challenges in the Garment Industry


Respondents from the labor groups acknowledged that their networking with international organizations has been very helpful in their campaigns. They often meet with these groups in order to learn how their agenda can be further advanced. For instance, they learn from the experiences of labor groups abroad that it would help if they negotiate as one sector vis-à-vis the government and employers. In view of this, local labor groups have been pushing for the realization of an industry-wide labor organization in the garment and textile sectors.24 In this case study, the benefit of having an international linkage is manifested in the support extended by the International Textile, Garment and Leather Workers’ Federation to the labor groups. The ITGLWF’s national chapter in the Philippines spearheaded several dialogues with government offices, particularly the GTEB. It actively organized several labor groups and was a key instrument in the formation of the Labor Forum Beyond MFA. The ITGLWF is now acting as the secretariat of the labor sector in the CTITC; hence it has been actively meeting with the labor groups for the presentation of a consolidated labor position in the CTITC.


The discussion shows how civil-society groups were able to meaningfully engage government because of their utilization of resources and opportunities available to them both internally and externally. Although a lot still needs to be done, one of their important achievements is the putting up of the Clothing and Textile Industry Tripartite Council, an office entirely devoted to the garment and textile industries. If it were not for the actions of civil-society groups, government may not have acted on the need for a body that would rationalize and set policy directions for the industries.25 Nonetheless, since the CTITC was formed only in April 2005, it remains to be seen whether or not it will be able to address the long list of problems voiced out by the civil-society groups. Although the industry has inherited problems from the past, these have been compounded in the era of globalization.


People, Profit, and Politics

The problems of the garment industry in the context of globalization are myriad. It is of utmost importance that government lay down a comprehensive plan on how to confront the problems and resuscitate the industry. A lot of factories are closing down and government cannot expect that new businesses will be put up without any action on its part. As articulated by the Fair Trade Alliance (2003), government should realize that local industries in general cannot be globally competitive, price- and quality-wise, “if they continue to suffer from poor and expensive infrastructures, inaccessible formal credit, high cost of power and utilities, unfriendly bureaucracy, unstable currency, and a generally difficult economic environment.” Our inability to stand up against foreign competition is evident even in our own domestic market. As it is now, foreign garments flood our market and, sadly, these are patronized by domestic consumers because of their better price and quality. Despite the doomsday scenario played up by some who insist that the Philippine garment industry should just be allowed to die a natural death, others remain hopeful. As articulated by the labor groups, something could still be done about the industry as long as government has the political will to implement the needed remedies. Some of these reforms are the curbing of corruption in the Bureau of Customs, solving the problem of smuggling and ukay-ukay, and utilizing the antidumping measures allowed by the WTO in order to stem the unbridled entry of garments into the country. In the meantime government should embark on a campaign for local consumers to patronize our garments. As both the labor groups and manufacturers have suggested, government could start by directing its offices to buy their employees’ uniforms from local manufacturers. Government should also put in place a systematic plan of developing our textile industry. Despite the fact that our garment export has increased over the years, it has remained import dependent. The inability of government to put in more resources for research and development of the textile industry has been pinpointed as a major cause of the problem.26 Moreover, government’s rehabilitation plan for the industry should not leave out the welfare of the workers as globalization has made their

Confronting the Challenges in the Garment Industry


plight more complex if not more difficult. Globalization has the effect of putting downward pressure on the wages and benefits of the workers because of the desire of government to make the domestic environment competitive and attractive to foreign investments. It is said that the minimum wage is pegged only at an amount barely enough to cover the daily cost of living for a family of six (Angeles 2003), because of pressures from capitalists including those operating transnational corporations (TNC). Government usually accedes to the demands to prevent the capitalists, especially TNCs, from transferring to production sites where the minimum wage is lower. Also, the state is being overly concerned with maintaining a favorable business climate for international capital, which has led to restrictions on the activities of labor unions, as exemplified in the “no union, no strike” policy in export processing zones supposedly to realize industrial peace. But, as Angeles (2003) pointed out, “genuine industrial peace through better labor-management cooperation can only take place when working and living standards are improved.” Hence, rather than being overly fixated on the activities of unions, government and management should devote more efforts to the improvement of such standards. Moreover, the globalization of production has been increasingly characterized by the flexibilization of labor manifested in part-time, temporary, casual, and subcontracted work. The feminization of labor forms part of the flexibilization, which means that women are increasingly forced out of the formal labor sector and are subjected to the disadvantages of informal employment. Although government still needs to enforce compliance among companies to observe the lawful entitlements of workers in the formal sector, it should also be able to focus on the needs of those in the informal sector. After all, the latter make up a substantial portion of those working in the garment industry. Besides the fundamental requirement of protecting their human and labor rights, other recommendations of the labor groups for those in the informal sector is their inclusion in PhilHealth and Pag-IBIG coverage. The effect of the footloose nature of capital due to globalization is seen in the recent closures of garment factories in the country, as companies


People, Profit, and Politics

move to production sites more conducive to profit accumulation. The sudden closures of factories has left hundreds of workers with unpaid wages and benefits. Most of these owners have left the country and can no longer be compelled to pay the workers’ entitlements. To address this problem, government should thus implement the suggestion of the labor groups that companies be required to put up a trust fund for the workers in the event of sudden closure. A comprehensive assistance package for workers who are suddenly unemployed should also be put in place. This assistance can be in the forms of skills training, providing capital to start a business, and, later, product marketing. 27 In the face of the garment industry’s gargantuan problems, however, what can provide a glimmer of hope is the ever-activist stance of the labor sector. As shown in the study, their capability to organize and bring their concerns to government’s attention has led the latter to act on their issues. However, as earlier noted, those identified with the national democratic movement are conspicuously absent in the initiatives discussed in the paper. It cannot be denied that the unity of labor groups can go a long way for the advancement of the workers’ agenda, especially in the legislative arena with the party-list representation. As it is now, because of ideological differences, some party-list representatives are expected to support only the agenda of labor groups with whom they share the same ideological thinking. Labor groups that do not adhere to the same political thinking cannot expect support from differently minded party-list representatives. It is also worth noting that as women are the ones mostly affected by the problems of the industry, they have also been at the forefront of the campaigns. As noted earlier, women comprise substantial membership in groups that are in the forefront of the campaigns. Labor organizations are also increasingly giving attention to the plight of informal workers. There have been efforts to organize the latter as part of the strategy of labor organizations to answer the needs of workers in the globalized setup (Viajar 2004). In addition, their concerns are widely articulated in various labor groups’ campaigns. Finally, the globalized setting has afforded the workers to take advantage of international networking. The expertise and assistance

Confronting the Challenges in the Garment Industry


of these international organizations have made possible the realization of some of the local labor groups’ advocacies.

1. 2. This was pointed out by Rosalinda Pineda-Ofreneo in her review of my paper. According to Angelito Mendoza, lead convenor of the Garments, Textile and Allied Industries Labor Council or GARTEX Labor Council, the tariff rates for imported garments should be placed at 30 percent so as to provide protection for our local producers. The biggest threat to our local producers are those coming from China whose products mostly cater to mass consumers. The extent of smuggling is described thus: “the volume of smuggled yarn, fabrics and garments was placed at 151,000 metric tons, or 51 percent of the estimated 300,000 metric tons imported into the country (based on a per capita consumption of four kilograms for an estimated total population of 75 million)” (Bacalla 2004). Ideally, there should be a close association between the garment and textile industries as our local textile industry should be the source of materials for garment production. Although in other countries the linkage between the two industries is well-established (especially in the case of successful garments exporters like China and South Korea), this is not the case in the Philippines (Austria 1994, 10). In the early 1960s, the garment industry started to experience growth through the enactment of the Embroidery Act (RA 3137) in 1961. Companies registered under the Act “were allowed to import raw materials free of duties and taxes” (Austria 1994, 12). Other important legislation that led to the growth of the garments export are: The Exports Incentive Act (RA 6135) in 1970, Act creating the Export Processing Zones (RA 5499 and PD 66) in 1972, and Executive Order 537 creating the Garment and Textile Export Board (GTEB) in 1979 (Pineda-Ofreneo 1989). The GTEB was in charge of integrating and rationalizing government policies and procedures governing the Philippine garment industry (GTEB). However, the main bulk of the work of GTEB was the allocation of the MFA quota to contractors. Hence, with the abrogation of the MFA, the GTEB was also abolished. However, some studies contend that the country will gain from the MFA phaseout as it will “increase the market access of the country in the world market, particularly in the industrialized countries” with the abolition of the quota restrictions (Austria 1996, 29). The country could focus on products where it has comparative advantage. Moreover, our workers’ skills for detailed embroidery is another area where our garments industry could be globally competitive (Austria 1996, 20). Donald Dee,






People, Profit, and Politics




president of the Philippine Chamber of Commerce and Industry (PCCI), said our current strengths are washed-out denims and high-end T-shirts. In the discussion, it would be helpful to use a study conducted by the Third World Studies Center (TWSC) in framing the opinions of the respondents. The TWSC study examined the perspectives and positions of a particular segment of civilsociety groups in the Philippines that have been critical or wary of globalization. A portion of the study examined how the groups define globalization. The characterizations given by the respondents of the study were grouped under the following categories: economic, political, social, technological, and cultural (Frago, Quinsaat, and Viajar 2004). Among the responses characterizing globalization that were grouped under the economic category are: neoliberalism, global capitalism, openness, interdependence, competition among developing and developed countries, and imperialism. Under the political dimension, responses—such as mutual imposition of treaties, conventions and instruments by member nations of international bodies; marginalization of Southern countries; abdication of state responsibilities; and neocolonialism—were found. For the social aspect, the research elicited the following responses: threat to the poor and workers, solidarity of civil-society groups, and threat to informal sectors. Under the technological dimension, the responses include advancement in technology; and worldwide spread of knowledge, ideas, and information. Homogenization, cultural aggression by the West/the US, counterdiversity, and cultural interchanges were found in the cultural dimension. For this study, the economic, political, and social categories will be used to understand how globalization has affected the garment industry. In the ensuing discussion, however, the economic and political dimensions are combined to accommodate overlaps in the responses of the respondents. The data of GTEB, however, show that despite the closures there is net increase in the number of factories setting up operation in the Philippines. Donald Dee, president of the Chamber of Commerce and Industry, nonetheless said that these newly opened factories will not stay long in the country as the owners are just assessing the situation in China before they finally move their operations there. Describing the present composition of companies, Ofreneo wrote that they usually maintain a “shrinking force of regular workers and an expanding army of irregulars, variedly called by union organizers as casuals, contractuals, 5-5 workers” (2003, 46). However, Cielito Habito in his written review of this book’s manuscript pointed out the benefits of subcontracting. He wrote, subcontracting “has been instrumental in other countries in the promotion and development of the small and medium

Confronting the Challenges in the Garment Industry



11. 12.




enterprise (SME) sector by promoting the development of synergistic partnerships between SMEs and large enterprises (e.g., the automobile industry in Japan). Ultimately, an enlivened SME sector resulting from these synergies that originate in subcontracting leads to further expansion in employment opportunities and workers’ choices.” Subcontracted worker is a general term used to cover a range of contractual arrangements for workers who are not permanent, formal economy workers (Lund and Nicholson 2003, 60). It is estimated that about half of the total number of garment workers would be seriously affected by the expiration of the MFA (Dela Cruz 2004). According to Rosalinda Pineda-Ofreneo, home-based workers are the most affected by computer-aided embroidery which took out jobs from communities toward factories. However, even factory workers today are threatened by the presence of these computer-aided technologies. This was pointed out in her written review of my paper. Clean Clothes Campaign was formed to “improve working conditions and to empower workers in the global garment industry, in order to end the oppression, exploitation and abuse of workers in this industry, most of whom are women.” It does this by: “1) putting pressure on companies to take responsibility to ensure that their garments are produced in decent working conditions; 2) supporting workers, trade unions, and NGOs in producer countries; 3) raising awareness among consumers by providing accurate information about working conditions in the global garment and sportswear industry, in order to mobilize citizens to use their power as consumers; and 4) exploring legal possibilities for improving working conditions, and lobbying for legislation to promote good working conditions and for laws that would compel governments and companies to become ethical consumers” (Clean Clothes Campaign). Among the aims of the ITGLWF are to: “assist unions in developing countries in organizing workers and educating their members to play an active role in their union” and “lobby intergovernmental organizations and other relevant institutions to ensure that the interests of workers in the sectors are taken into account in decisions made at the international level” (International Textile, Garment and Leather Workers’ Federation). According to the International Labor Organization (ILO), most of the principles contained in corporate codes pertain to occupational safety and health (25 percent), nondiscrimination (25 percent), child labor (45 percent), wages (40


People, Profit, and Politics

16. 17.




percent), forced labor (20 percent), and freedom of association (15 percent). However, according to the paper’s reviewer, Rosalinda Pineda-Ofreneo, the monitoring of codes of conduct is problematic as workers, even if organized, feel obliged to lie to save their jobs. This conclusion is further discussed in Lund and Nicholson (2003). E-mail response of Roy Velez of the Kilusang Mayo Uno to my inquiry dated August 1, 2005. In some countries in South Africa, the trade of secondhand clothing has led to the collapse of their garment industries (International Textile, Garment and Leather Workers’ Federation). Hutchison (2001) identified the following factors why subcontracting is widely practiced in the Philippines. “First, the nature of the sewing technology utilized in the industry—there is no integrated production line. After cutting the garment’s pattern, one worker can finish the whole work with the use of a sewing machine. Sewing machines can also be easily installed at home or in production areas utilizing limited space… Second, sub-contracting is practiced to reduce labor costs and/or to prevent the intervention of unions. Workers in small sub-contracting arrangements receive lower wages than those working in large factories. In addition, because regular workers are spared from rendering long hours of work to meet quotas and deadlines, manufacturers are therefore able to prevent possible complaints and demands coming from unions.” A number of the respondents nonetheless said that government should do serious housekeeping to improve the economy and make more jobs available for the workforce. Retraining the garment workers for other jobs is useless if alternative jobs are not available. Some informal workers already avail themselves of PhilHealth benefits as indigents or paying members. However, information about and access to PhilHealth benefits are still extremely limited. This was pointed out by Rosalinda Pineda-Ofreneo in her review of my paper. In the Philippines, a substantial number of subcontracted workers do their work at home. The latter are also known as homeworkers. In the garment industry, women make up most of the workers in the informal sector. As informal workers, they work without secure contracts, worker benefits, or social security/protection (Lund and Nicholson 2003, 15). Social security covers the core contingencies of: health care, incapacity for work due to illness, disability through work, unemployment, maternity, child maintenance, invalidity, old age, and death of a breadwinner (Lund and

Confronting the Challenges in the Garment Industry


Nicholson 2003, 17). 21. Although the Bureau of Working Conditions conducts time and motion studies to determine salaries of workers who are paid based on piece-rates, this is only done upon the request of the firms. If the owner does not initiate any such request, then no study will be conducted (Soriano 2004). 22. This was pointed out by Rosalinda Pineda-Ofreneo, Angelito Mendoza, and Teresa Soriano. 23. Because they did not participate at all in dialogues with government, labor groups identified with the national democratic movement are not represented in the Clothing and Textile Industry Tripartite Council. 24. However, a number of the respondents admitted that the different political persuasions of the labor groups may deter the formation of an industry-wide union. 25. According to the civil-society respondents, prior to their conduct of rallies and dialogues, government has not made policy pronouncements on its plans for the garment industry in the advent of MFA expiration. 26. According to Angelito Mendoza (2004), the Multi-Fiber Arrangement is also to be blamed for the underdevelopment of the textile industry as foreign companies contracting out jobs to local producers prefer the use of imported textiles for their garments. 27. Aside from providing financial support as capital for the workers to start a business, government should also help the workers market their products. The case of Karayom workers illustrates government’s lack of comprehensive support for the workers. Karayom Garments Manufacturing, located in Parañaque, Metro Manila, was illegally closed in January 2003 without the necessary formal application for closure with a thirty-day notice. The company, which was owned by Yusuf Suveyky, an American, produces solely for export to the US (Salidumay). When workers from the Karayom garment factory found themselves jobless (with unpaid salaries and benefits) after their employer suddenly left the country, government gave the workers funds that they could use to start a business. But because the funds were limited, the workers were reduced to sewing and selling rugs. The income they earn from this venture is hardly enough to meet their daily needs and that of their families. One respondent pointed out that government support should have been more sufficient and comprehensive. Since the workers knew how to make sportswear and swimwear, government should have given them bigger financial support to enable them to buy the raw materials for the products.


People, Profit, and Politics

Government should not end with the extension of financial support; it should also help in the marketing and promotion of the products sewn by the workers. It should help launch campaign with the public to buy the “unbranded” products that are as good as the more expensive branded imported products (Arellano 2004).

Adviento, Annie (coordinator, International Textile, Garment and Leather Workers’ Federation, Philippines). 2004-2005. Interview by Ma. Glenda S. Lopez Wui. Tape recording. November 9, 2004 and March 9, 2005. Angeles, Leonora C. 2003. Development, security and global restructuring: The case of Philippine export manufacturing industries. In Development and security in Southeast Asia, ed. David B. Dewitt and Carolina Hernandez, 203-32. England and USA: Ashgate Publishing. Aniesgado, Portia (secretary general, Gelmart Industries Workers Union; member, Almagate). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. October 6. Arellano, Ernesto (convenor for labor, Fair Trade Alliance). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. Tape recording. October 25. Austria, Myrna S. 1994. Textile and garment industries: Impact of trade policy reforms on performance, competitiveness and structure. Philippine Institute for Development Studies Discussion Research Paper Series No. 94-06. ———. 1996. The effects of the MFA phaseout on the Philippine garment and textile industries. Philippine Institute for Development Studies Discussion Paper Series No. 96-07, June. Bacalla, Tess. 2004. Smuggling killing shoe, garments and textile industries. Philippine Center for Investigative Journalism. 2004/smuggling3.html. Caños, Michelle (trade union organizer, Bukluran ng Manggagawang Pilipino). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. October 6. Casaña, Ludy (secretary general, Dogi Penn Philippines, Inc. Workers Union; member, Federation of Free Workers). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. November 3. Castro, Ariel (director for education, Trade Union Congress of the Philippines). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. October 8.

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Clean Clothes Campaign. Frequently asked questions. http:// Cororaton, Caesar. 1997. Productivity analysis in garment and textile. Philippine Institute for Development Studies Discussion Paper Series No. 97-09, February. Dee, Donald (president, Philippine Chamber of Commerce; former president, Employers Confederation of the Philippines). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. November 22. Dela Cruz, Roderick T. 2004. Life after quotas., October 28. Dela Cuesta, Lynly (senior tariff specialist, Philippine Tariffs Commission). 2005. Telephone interview by Ma. Glenda S. Lopez Wui. July 26. Espinola, Rhodz. [2005?]. Impact of AFTA on women workers in the garment industry. Unpublished. Fair Trade Alliance. 2003. Fair trade not free trade. Quezon City: Fair Trade Alliance. Fair Trade Alliance.Preservation and creation of jobs in the garments industry. Frago, Perlita, Sharon Quinsaat, and Verna Dinah Viajar. 2004. Philippine civil society and the globalization discourse. Quezon City: Third World Studies Center. Garment and Textile Export Board (GTEB). Industry profile 2003. http:// Gills, Dong-sook S. 2002. Globalization of Production and Women in Asia. Annals of the American Academy of Political and Social Science 581:106120. Honculada, Jurgette (secretary general, National Federation of Labor). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. October 30. Hutchison, Jane. 2001. Export opportunities, unions in the Philippine garment industry. In Organizing labour in globalising Asia (The new rich in Asia), ed. Jane Hutchison and Andrew Brown, 71-89. London and New York: Routledge. International Textile, Garment and Leather Workers’ Federation (ITGLWF) website. Labor Forum Beyond MFA. n.d. Labor action, policy and legislative agenda toward industry transformation.


People, Profit, and Politics

Lalata, Rommel, and Luige del Puerto. 2003. Garment workers drugged to stay awake for 3 days. Inquirer News Service, July 3. nat/2003/jul/03/nat_4-1.htm. Lund, Franchie, and Jillian Nicholson, eds. 2003. Chains of production, ladders of protection. Washington DC: World Bank. Magadia, Jose. 2003. State-Society relations in a restored democracy. Quezon City: Ateneo de Manila University Press. Mendoza, Angelito (lead convenor, Garment, Textile and Allied Industries Labor Council or GARTEX Labor Council). 2005. Interview by Ma. Glenda S. Lopez Wui. Tape recording. April 15. National Commission on the Role of Filipino Women (NCRFW).2003. Report on the workshop on safety nets for women workers in the garment industry (government and employers group). Unpublished. Navea, Chodie (organizer of Public Sector Workers, Bukluran ng Manggagawang Pilipino). 2005. Interview by Ma. Glenda S. Lopez Wui. Tape recording. March 3. Ofreneo, Rene. 2003. Globalization and industrial crisis. In Fair trade not free trade, 41-45. Quezon City: Fair Trade Alliance. Ofreneo, Rene et al. 1996. Profile of the national capital region and the garment and textile industry. Regional Tripartite Wages and Productivity Board, DOLE-NCR. Pineda-Ofreneo, Rosalinda. 1989. The Philippine garment industry and its homeworkers: Focus on Bulacan province. Rural Women Homeworkers Project, International Labor Organization, Bangkok, Thailand. Salidumay. Fact sheet on Karayom Garment workers picket. http:// Social Accountability International (SAI). index.cfm?&stopRedirect=1. Soriano, Ma. Teresa M. (executive director, Department of Labor and Employment–Institute of Labor Studies). 2004. Interview by Ma. Glenda S. Lopez Wui. Tape recording. October 13. United States Agency for International Development (USAID), Solidarity Center, and Trade Union Congress of the Philippines (TUCP) Anti-Sweatshop Project. 2002. Workers’ perceptions of companies’ compliance with core labor standards and codes of conduct in selected economic zones and industrial areas in the Philippines: A survey of 202 enterprises. Quezon City: USAID, Solidarity Center, and TUCP Anti-Sweatshop Project.

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Velez, Roy (Kilusang Mayo Uno). 2005. E-mail response to interview questions by Ma. Glenda S. Lopez Wui.August 1. Viajar, Verna Dinah Q. 1997. New employment patterns: The trade union response. Kasarinlan: Journal of Third World Studies 12-13 (4-1): 155-90. ———. 2004. Philippine trade unions in the era of globalization: Focus on cement and garment workers. Quezon City: Institute for Popular Democracy. World Trade Organization. Anti-dumping. adp_e/adp_e.htm. Worldwide Responsible Apparel Production (WRAP). http:// Wui, Marlon, and Ma. Glenda S. Lopez. eds. 1997. State-civil society relations in policy-making. Vol. 2 of Philippine Democracy Agenda. Quezon City: UP Third World Studies Center.


People, Profit, and Politics

Balancing Consumer and Corporate Interests in the Telecommunications Industry
Ronald C. Molmisa


s countries throughout the globe attempt to become economically competitive, the Philippine government embarked on reforms to open up the telecommunications industry in early 1990s. There was a realization that the poor telecommunications infrastructure has been dragging the economy down (Shooshan and Temin 1999, 2). Overall, liberalization has affected the local industry in three ways—global operations, regional and multilateral agreements, and new global services (International Telecommunications Union 2002, 4). Almost all major telecommunication companies (telcos) in the country have strategic foreign partners and investors. Economic policymakers ascribed the country’s telecommunications sector improvement and competitiveness in the world market to its participation in regional trading arrangements under the auspices of the World Trade Organization (WTO), the ASEAN Free Trade Agreement (AFTA), the Asia-Pacific Economic Cooperation (APEC), and the International Telecommunications Union (ITU), among others, which provide policy assistance in addressing local industrial issues. Advancement in information and communication technology introduced new services in the market like mobile phone roaming, global satellite systems, and third-generation (3G) services that industry players enhance and maximize.


People, Profit, and Politics

The main problem, however, is that the sector was liberalized even before the basic need for telecommunication service was satisfied. This brought serious issues, which industry players, especially the telcos, have to contend with. This paper is an exploratory research on state-civil society relations in the Philippine telecommunications industry. It aims to accomplish three things: 1)to describe and analyze the dynamics and means of intervention used by civil society organizations (CSOs) in engaging the state in the context of liberalization. 2)to explain the factors that accounted for CSOs’ success in terms of policy outcomes. By looking at political opportunity structures, this paper explores how civil society organizations are able to maximize available internal and external resources and how these translate to their success or failure (Kitschelt 1986). 3)to provide recommendations on how to strengthen state-civil society relations in the industry. In order to accomplish the above-mentioned objectives, this paper is organized in three sections. The first part provides the structure of the industry before and after its liberalization, the current regulatory framework, and a discussion of the evolution of telecommunication policies in the country vis-à-vis the story of the monopoly of the Philippine Long Distance Telephone Company (PLDT). The next section delves into the state-civil society relations in the industry. Apparently, the weaknesses of the National Telecommunications Commission (NTC) as an industry regulator reflect the vulnerability of the state in the face of liberalization. The lack of active civil society organizations in the industry augurs well for the strong involvement of the business sector in engaging the state in policy debates and discussions. The experiences of TxtPower and the Philippine Internet Services Organization (PISO) are discussed to demonstrate how civilsociety groups operate amid political opportunities and constraints. The

Balancing Consumer and Corporate Interests in the Telecommunications Industry 157

third section synthesizes the discussions and offers recommendations on how to increase civil society participation and how to make it more effective. Primary data gathering for this study was carried out through semistructured key informant interviews with industry stakeholders and actors. Secondary data were culled from print media articles, Internet-based sources, academic studies on the industry, and government sources including notes on public forum and consultations, agency reports, memorandums, and other issuances from August 2004 to January 2006.

Telecommunications Industry Overview
For more than seventy years, the telecommunications sector was governed by the private sector under a virtual monopoly structure. With the lack of competition and limited capital, the industry hardly grew. This condition was once criticized by former Singapore Prime Minister Lee Kuan Yew who once commented that “99 percent of Filipinos are waiting for a phone line, while the other one percent are waiting for a dial tone” (cited in Cabanda 2002). This dismal condition can be summarized as follows (Patalinghug 2004): 1) 2) 3) 4) 5) Only 16 percent of the total land area are being serviced. Only half a million installed lines were utilized. Poor quality of service of the major telecommunication company. Unbalanced distribution of service between rural and urban areas. Outdated infrastructure and inadequate interconnection of telecommunication facilities.

Liberalization of the industry introduced significant benefits not only to the public but also to small market players. It engendered an exciting multi-operator environment characterized by competition,1 mergers, strategies, and counter-strategies of key players (Alonzo and San Pedro


People, Profit, and Politics

1997). Although PLDT is still a market giant to contend with, it no longer possesses the same market clout it enjoyed before liberalization. Prior to deregulation, PLDT owned at least 85 percent of the country’s telecommunications infrastructure. It has exercised virtual monopoly over local, national, and overseas calls because it owns the country’s only telecommunications backbone facilities (Serafica 1998). Foreign technology, financing, and expertise were made accessible, leading to improved services and more foreign direct investment, mainly due to foreign partnerships with local companies. Foreign partners of local companies include First Pacific Group of Hong Kong (a major shareholder of PLDT), Singapore Telecoms and Deutsche Telekom (Globe), New Telecom (Digitel), Korea Telecoms (partner of Capwire), Shinawatra of Thailand (Islacom), Cable and Wireless (Eastern Telecoms), Millicom (Extel-com), Nynex (ICC), Comsat USA (Philcom), and Nippon Telegraph and Telephone Corp. (Smartcom). In 1999, foreign direct investments (FDI) in the industry increased by over 480 percent to PHP 524.7 billion from PHP 90.2 billion in 1992 (National Economic and Development Authority [NEDA] 2001). The service sector, which comprises about 48 percent of the country’s total GDP, increased by 3.23 percent in 2004 mainly due to the telecommunications sector.2 A study reveals that the investments in the telecommunications sector salvaged the ailing economy of the country during the early period of liberalization in 1994-1997 (Abrenica 1999). At present, the telecom industry serves as one of the country’s vibrant economic sectors. Table 1 shows the current structure of the sector. Government requirements for industry players during the early years of deregulation caused the upward trend in the telephone density and mobile phone subscription. Landline telephone density (number of lines per 100 people) improved from the meager 2.01 in 1995 to 9.05 in 2000 (table 2). Although the figures nosedived from 2001 to 2003, positive growth was registered in 2004 when subscription of fixed line telephones grew by 4.52 percent, with 6.53 million installed lines rolled out by PLDT and 1.5 million by Innove Communications Inc., a wholly owned subsidiary of Globe Telecoms Inc. (Bautista 2004).

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Table 1. Telecom industry structure
2000 Local exchange carrier service Inter-carrier carrier service International gateway facility Radio mobile • Cellular mobile telephone Subscriber • Public trunk repeater service Radio paging service Value-added service With networks • Coastal • Broadband Without networks 12 19 156 12 19 186 12 19 186 13 19 249 292 18 7a 11 11 7b 11 11 7c 11 11 10 8 77 11 11 2001 74 14 11 2002 73 14 11 2003 73 14 11 2004 73 14 11

Sources: National Telecommunications Commission Reports, NEDA, and other sources. a BayanTel and Digitel are not yet operational b BayanTel and Digitel are not yet operational c Only BayanTel is not yet operational

Table 2. Philippine telephone density index (1998-2003)
Year Installed lines (million) 1998 1999 2000 2001 2002 2003 2004 9.08 9.12 9.05 8.88 8.70 8.09 8.03 Subscribed lines (percent) 3.44 3.87 4.01 4.26 4.17 4.07 4.52

Source: NTC 2002-2004 Annual Reports.


People, Profit, and Politics

The DOTC released in December 1992 Department Order 92-269, formally opening the mobile phone industry to new market players. Afterward, the most influential business groups started to occupy the entire sector. New competing telcos realized they have no chance in competing against PLDT in the landline market, thus they went into newer markets including the cellular phone business. A PLDT subsidiary, the Pilipino Telephone Company (Piltel), was the first company to be granted authority to deliver cellular mobile telephone service in 1991. Express Telecommunications Co. (Extelcom) also launched its service in the same year. Three years later, Smart Communications (Smart), Isla Communications Inc., and Globe Telecoms joined the competition. Since 2000, cellular and mobile telecommunication services (CMTS) have been exhibiting phenomenal growth (table 3). A total of 2.85 million mobile subscriptions were registered in 1999, which increased by 126 percent in 2000. The entry of SunCellular, the GSM brand of Gokongweiowned Digital Telecommunications Philippines, Inc. (Digitel), in March 2003 further increased the number of subscribers. In the same year, there were already 22.5 million mobile phone subscribers under the six major CMTS players. Mobile phone subscription grew to 33.40 million in 2004, a 48.54 percent increase from the 2003 figure (Bautista 2004). It was predicted that before year 2005 ends, half of the 84 million Filipinos will have access to cell phones. This is because although 55 percent of the total cities and municipalities have fixed-line services, people still choose to utilize mobile phones due to its affordability.3 There was a maximum utilization of short messages service (SMS) or “texting” in many parts of the country. The mobile company Sony-Ericsson even dubbed the Philippines as the texting capital of the world because of the 175 million average number of text messages being sent by 33 million Filipinos daily. Not surprisingly, the country’s two largest mobile phone companies have benefited immensely from the popularity of texting. In 2002, Globe Telecoms registered a net income 59 percent higher than that of the previous year, while the net income of Smart Communications, a unit of PLDT, skyrocketed by 51 percent in the first nine months of the same year.

Balancing Consumer and Corporate Interests in the Telecommunications Industry 161

Table 3. Mobile phone subscription (1992-2004)
Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Subscription 56,004 102, 400 171, 903 493, 862 959,024 1343,620 1,733,652 2,849,880 6,454,359 12,159,163 15,383,001 22,509,560 33,400,000 83.00 68.00 187.00 94.00 40.00 29.00 64.30 126.00 88.80 26.50 46.33 48.54 Percent increase

Source: National Telecommunications Commission 2002-2005. Annual Reports.

Institutional Framework

The Department of Transportation and Communications (DOTC) used to be the sole executive agency tasked to formulate, plan, program, coordinate, implement, regulate, and administer the country’s telecommunication policies. Until recently, Executive Order (EO) 269, issued by President Macapagal Arroyo in January 2004, established the Commission on Information and Communication Technology (CICT) which functions as the primary ICT policy, planning, coordinating, implementing, regulating, and administrative entity of the executive.4 The NEDA assists the CICT by providing assessment and policy guidance on infrastructure development in the ICT sector. The DOTC has two attached agencies: the Telecommunications Office (Telof ) and National Telecommunications Commission (NTC). On one


People, Profit, and Politics

hand, the Telof is one of the four sectoral offices of the DOTC tasked to provide basic communication services in almost all the localities in the country. It was called the Bureau of Telecommunications when it was established under EO 94 approved in 1947. Its name was changed to Telecommunications Office when EO 125 called for the comprehensive reorganization of the government in 1987. On the other hand, the NTC is a quasi-judicial office that acts as the regulatory arm of the DOTC and was authorized to be the principal overseer of the provisions of RA 7925 or the Philippine Telecommunications Act of 1995. The NTC was created in 1979 pursuant to President Marcos’s EO 546. It was later attached to the DOTC in 1987. The NTC is mandated to regulate the entry of qualified service providers and to adopt a pricing policy that would generate sufficient returns. It establishes rates and tariffs that provide for the economic viability of telecom entities and a fair return on their investment, considering the prevailing cost of capital in the domestic and international markets. In principle, the NTC does not interfere as far as market and pricing issues among telecom players are concerned. The commission allows them, on their own initiative, to negotiate and enter into interconnection agreement subject to technical, commercial, and operational rules (Heceta 2004). In cases of refusal to negotiate or failed negotiation, the commission, upon the complaint of any interested party or upon its own initiative, intervenes and assumes jurisdiction and sets the terms and conditions it may find appropriate for the case. In case of mediation, the NTC, on its own initiative at any stage of negotiation, can intervene and mediate between parties. Any agreement reached by parties should be submitted to the commission for approval within ten days from the execution of the agreement. Insofar as its quasijudicial functions were concerned, the orders and decisions of the NTC were final, except when appealed to the Supreme Court of the Philippines.
Legal Framework

Understanding the failure of the government to demonopolize the industry during the pre-liberalization period must be anchored on the

Balancing Consumer and Corporate Interests in the Telecommunications Industry 163

story of the seventy-year reign of the Philippine Long Distance Telephone Company. The company was nurtured and pampered by two administrations.5 Marcos’s protectionist regime stalled the necessary policies to revitalize the telecom sector. It is widely known that Marcos and his associates benefited immensely from the ownership and control of some of the country’s telecommunication companies including PLDT. During the Martial Law years, presidential decrees and other executive issuances consciously groomed the PLDT to be a natural monopoly. It operated in a market of limited competition, leading to telephone shortage and higher service rates (Hudson 1997). The company had the first pick of profitable service areas and cities while smaller operators, mostly members of the Philippine Association of Private Telephone Companies (PAPTELCO), were relegated to service less profitable areas (Obien 1998, 40). To further eliminate competition, PLDT acquired the smaller players including the second-largest telephone provider, Republic Telephone Co. (Retelco), which was ordered to merge with the firm in 1981. To raise the equity of PLDT, Marcos signed the institution of PLDT’s subscriber investment plan where all PLDT clients buy preferred shares in the company so that they can theoretically become owners. At present, subscribers’ shares still comprise 75 percent of the company but voting rights are only reserved to the 25 percent shareholders. The NTC further enhanced PLDT’s dominance by issuing Ministry Circular 82-046 providing for the single, integrated national backbone for voice, telegraph, telex, and data transmission, all of which were installed by PLDT (Coronel 1998). The Government Telephone Service (GTS), which had its own national backbone, was integrated to the trunklines of PLDT. The revolutionary government of Corazon Aquino (1987-1992) started a new wave of telecom reforms. Aquino was politically bound to resolve the telephone crisis because majority of landline phone applicants belong to the class which brought her to power—urban, middle-class professionals and businesspersons (Kim 2003,120). In 1987, the DOTC released Memorandum Circular 87-188 to guide the telecommunications development in the 1990s. A year later, Presidential Memorandum Order


People, Profit, and Politics

163 created the National Telecommunications Development Committee (NTDC), a joint state-industry committee composed of top-level decision makers, chaired by the secretary of the DOTC. The NTDC was charged with the development of strategies for rationalizing the fragmented industry structure. This was followed by the signing of the Municipal Telephone Act of 1989, requiring installation of public calling stations in all municipalities, especially in rural areas. It provides for the installation, operation, and maintenance of public telephones in each and every municipality in the Philippines with the “Telepono sa Barangay” (Telephone for the Barrio) as its flagship program. The Act was amended and upgraded in 2000 by establishing the Municipal Telephone Projects Office under the DOTC. In 1990, the DOTC issued the National Telecommunications Development Plan (NTDP) as the agency’s overall blueprint and policies for the communications sector through the year 2010. The NTDP is apparently on hold because the DOTC is waiting for the resolution of the Congress on the proposal to create a Department of Information and Communication Technology (DICT). The Aquino administration did not vigorously push for the industry’s demonopolization for obvious reasons. Then PLDT President Antonio “Tony Boy” Cojuangco was the president’s first cousin. PLDT was among the first companies sequestered by the Philippine Commission on Good Government (PCGG), a commission established to probe Marcos’s illgotten wealth. Just weeks later, PCGG lifted the sequestration order. PLDT’s political and economic clout made it difficult for new market players to secure a legislative franchise. Many of them who were denied a license have either opted to buy stocks of major telcos or form mergers. Although the liberalization process commenced in 1987, it was only in 1989 that new licenses were granted to international gateway facilities (IGFs), cellular mobile telephone system providers (CMTS), paging, cable TV, and other telecom services. At present, dominant players still obstruct the entry of other players. The Aquino government failed to discipline PLDT on various occasions. During the term of Commissioner Jose Alcuaz, the NTC compelled the

Balancing Consumer and Corporate Interests in the Telecommunications Industry 165

company to interconnect with cellular phone provider Express Telecommunications Co. (Extelcom). It not only disregarded the interconnection order but also questioned in the Supreme Court the validity of the Extelcom franchise. When the decision came out in favor of Extelcom, PLDT simply bought into the company. In another case, when Digitel won the bid to operate the government telephone system in Luzon in September 1991, PLDT attempted to block its operations by preventing Digitel from leasing its phone networks (Coronel 1998, 130). In another incident, major telcos opposed the entry of Connectivity Unlimited Resources Inc. (CURE) and Multimedia Telephone Inc. to be a CMTS player and maintain a 3G digital network (Today, March 29, 2004) although the House of Representatives earlier approved CURE’s legislative franchise. Major policy breakthroughs transpired during the term of President Ramos (1993-1998). Consistent with his “Philippines 2000” agenda, Ramos accelerated the liberalization thrust through his landmark executive issuances. The president signed two unprecedented executive orders that drastically transformed the landscape of the industry: EO 59 issued on February 24, 1993, calling for the compulsory interconnection of authorized public telecommunications carriers, and EO 109 issued on July 12, 1993, which outlines a policy designed to improve local exchange carrier service to be accomplished through the Service Area Scheme (SAS). EO 109 compelled CMTS operators to install 400,000 telephone lines in three years and 300,000 lines for IGF operators within five years. EO 109 introduced the Service Area Scheme and the three-year Basic Telephone Program (BTP) which ended in June 1998. Through the SAS, the country was divided into eleven geographic areas, where CMTS operators are required to operate both in served and underserved areas. Eight carriers were authorized to operate in these areas while IGF operators were also mandated to install a rural exchange line for every ten urban local exchange lines. PLDT was not required to install new lines. Bayantel, Digitel, Globe Telecom and Smart satisfied the rollout requirements while Piltel, Islacom, PT&T/CAPWIRE, and ETPI failed to meet their target lines. Several reasons were raised, including the peace and order problems and poor


People, Profit, and Politics

business environment in assigned areas. As of year 2000, six operators— Digitel, Globe, Bayantel, PLDT, Smart, and Piltel met the required number of local lines and rural deployment but were deficient in covering the required areas. To further prove that the government was serious in its demonopolization project, Ramos gave majority of seats of PLDT’s Board of Directors to government officials, appointing six of its eleven board members (Cabanda 2002). When PLDT felt that the entry of new market players was inevitable, it embarked on a nationwide installation of landline phones through its Operation Zero-Backlog program (Smith 1995). Ramos’s EO 59 and EO 109 were not without flaws. While the SAS attracted investments, the government failed to set realistic terms for the telecom players. EO 109 forced the new carriers to allocate half of their investment in areas where there are unpredictable returns. Installing landline facilities in rural areas did not become an efficient enterprise due to lack of market. Often, the government is the one that spends people’s taxes to install operational lines. To make matters worse, the proactive involvement of the DOTC as an operator in unprofitable areas gave industry players the notion that they were not obligated to provide service in such areas. New players also had difficulty complying with SAS due to the huge funding requirement and the short period of completion. Half of the new carriers were not able to meet their obligations. The target of 87 percent coverage by 1998 was not met. As of December 2000, only 2.8 million of the total 6.8 million available lines have been subscribed, which stood at 4.26 million in 2001. In 2001-2003, total subscribed lines still stood at 50 percent of the total lines installed. The number of subscribed lines in December 2002 was 3.310 million, a drop from the previous year’s 3.315 million. Distribution of the facility was ill-managed with overprovisioning happening in urban areas. Telecom services are concentrated in the National Capital Region (NCR) and the urban centers of Region 4, comprising 65 percent of all phone lines installed from 2001 to 2003 (NEDA 2001). To rectify the shortcoming of SAS, the DOTC is currently intensifying its efforts to set up Community e-Telecenters to areas where people cannot afford to subscribe for a telephone line.

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On February 20, 1995, President Ramos enacted Republic Act 7925, the Public Telecommunications Policy Act of the Philippines (supported by NTC Memorandum Circular 8-9-95 as IRR), to further liberalize the industry. The Act, however, appeared to be a countermeasure against the Ramos administration’s preliminary initiatives. It contains provisions that undermine the reforms initiated by EO 59 and EO 109. The reduction of “rollout” period to three years from the original five years made it more difficult for the new players to raise capital and meet their commitments. RA 7925 also mandates for the principle of mutual agreement about the interconnection and tariff rates among the concerned parties. This reduced the role of NTC as a market regulator. This provision means that the nine companies installing landlines in eleven service areas would have to forge agreements with the other eight, with state intervention as a last resort. It was later confirmed that the presence of more players did not ensure the attainment of universal access due to interconnection disputes between and among telecom carriers. PLDT has been accused, time and again, of deliberately delaying interconnection. The common trend was that nondominant carriers were compelled to interconnect with the dominant carrier owing to the latter’s wide base of subscribers. The dominant carrier was not always willing to interconnect unless its conditions are met. The mantra of the major telcos is that small carriers tend to “piggyback” on its facilities and wider network.

State and Civil-Society Actors
Globalization engenders new challenges that could impinge on the normal functioning of states. Some scholars even claimed their “end and/ or retreat” mainly because they have lost their role as a fiscalizer and regulator of the market (Ohmae 1994; Strange 1996). This study takes the contrary position by viewing the state as a significant actor in a liberalized market. For one, the entry of more telecom players elicits a more widespread involvement of states to monitor and resolve market issues. State regulation is imperative during a transition from a monopolistic market into a competitive one. The great challenge, however, is how to put in place


People, Profit, and Politics

adequate regulatory framework that will ensure industry growth as well as protect consumer welfare (Aldaba 2000; Lee 2002, 1). The state’s domestic capability is a good yardstick to determine its strength or weakness. A strong state can “penetrate society, regulate social relationships, extract resources, and appropriate or use resources in determined ways” (Migdal 1987). It can insulate itself from external forces that may affect the implementation of coherent and effective policies. The character of the regulatory agency that exists has a major influence on the state-civil society relations. The succeeding discussions describe the strengths and limitations of the NTC in managing the market and how these shape the interaction of industry actors.
The Weak (Regulatory) State

The NTC as a regulatory body suffers from a split character. On one hand, it exhibits a proactive role in resolving market issues. On the other hand, it falls short of its expected role as a regulator. The NTC’s strength can be seen in its effort to implement measures to combat mobile text frauds,6 which according to the Anti-Money Laundering task force, have ripped about PHP 5 million from the victims in 2003 (Today, April 16, 2004). In October 2004, NTC instructed all mobile phone service centers engaged in the repair, servicing, or maintenance of mobile phone units to register their businesses and acquire a permit from the office (MC 08-082004A). This is to control the proliferation of illegal repair shops where cloning of SIM cards and altering of fifteen-digit International Mobile Equipment Identifiers (IMEI) of mobile phones are being performed. Due to numerous complaints, the NTC released a memorandum on March 16, 2005, regulating unsolicited commercial text messages (Today, January 19, 2005). It mandates that “commercial and promotional advertisements and other broadcast or push messages shall be sent only to subscribers who have prior consent or have specifically opted-in to receive said messages.” The government desires to sustain growth by creating a competitive, private-sector-driven telecom industry. Although the NTC was vested by RA 7925 with broad regulatory powers— facilitate the entry of qualified

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service providers; assure the quality, safety, reliability, security, compatibility, and interoperability of telecom facilities and services; mandate a fair and reasonable interconnection of services; protect other telecom entities and the public from unfair trade practices; promote consumer welfare; manage radio and television broadcasting, particularly licensing and spectrum usage—they were counterbalanced by the agency’s four major limitations. These handicaps are laid down in a consultative document released by the commission on December 16, 2005 (NTC 2005, 22-27). These constraints concern meager resources, legacy of past lapses, limited regulatory powers, and asymmetry of information between the NTC and the regulatees. First, the NTC executives reasoned out that regulatory oversight requires a considerable number of professional staff, modern equipment, and adequate information database which the NTC has yet to achieve. The commission solely depends on the annual appropriations approved by the Congress. The performance of the agency has been hampered by past regulatory lapses and policy flaws. The Consultative Paper admits that “[i]n the past, the Commission has taken a mediatory stance on most issues brought to its attention. Some stakeholders have viewed such response as inadequate from a regulator whom they expect to check against abuses of market power” (NTC 2005, 23). The NTC must be fashioned as an effective and genuinely independent regulatory body. It remained practically “toothless” all throughout the Marcos and Aquino years (Coronel 1998, 124-25). It continues to be affected by partisan politics. At present, the term of appointment of commissioners depends on the confidence of the president of the country. The Congress can also determine its annual budget appropriations (Esfahani 1994). Influence-peddling and rent-seeking activities become a serious problem especially in securing a legislative franchise. In fact, the country has been falling short of the WTO requirements as written in its Telecommunications Regulatory Reference Paper. The document calls for transparency of the franchising process by setting a maximum time required to reach a decision (sections 2.1 and 2.2) and providing information on the process to the public (sections 2.3 and 2.4). Although the Arroyo administration’s Medium-Term Philippine


People, Profit, and Politics

Development Plan (MTPDP) for 2004-2010 calls for the fixing of the term of commission members to “insulate them from political and other outside pressures” (NEDA 2004, 21), there are still no measures implemented toward this goal. Previous issuances and statutory powers of the NTC are now seen as limited and outdated in the face of the advancement of information and communication technologies (ICTs) and recent industry developments. The lack of technology-specific rules often frustrates the government’s desire to promote competition and level the playing field. The narrow and prescriptive policies that guide the industry must be reviewed to cope with the advancement in ICTs (i.e., VoIP, Wi-Fi/Max) and adapt to current market realities. Often, the agency’s “wait-and-see” disposition in resolving market conflicts can be ascribed to the lack of implementing guidelines and policies. What was considered as a value-added service (VAS)7 fifteen years ago is now considered either as a basic telecommunication service or a dead technology (i.e., pagers). One big step to this end is to amend RA 7925 and review the National Telecommunications Development Plan (NTDP) that DOTC created in 1990 for them to provide a fresh vision for the industry. Drafting a regulatory framework for ICT-enabled industries could resolve the current technological dilemmas. At present, there is no government agency that regulates the Internet, particularly its contents (e.g., pornography, gambling, sale of illegal firearms and drugs, and terrorist activities). As such, President Arroyo’s issuance of EO 269 creating the Commission on Information and Communication Technology is a good development. Another obstacle concerns NTC’s lack of pertinent information on the operations of the industry players. The dependence of the agency mostly on the information being supplied by the regulatees brings serious issues because not all of them comply with reportorial obligations. At present, the agency does not have a database system of industry trends and reports that would facilitate decision making. The operation of the Web-based texting-service company Chikka Asia Inc. was questioned by the NTC because of its provision of cheaper texting services for the public. The company’s website,, has

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become popular among mobile phone subscribers who have access to personal computers. Chikka offers computer software that can be downloaded from its website. This can enable a mobile phone subscriber to send text messages from the Web for free instead of paying the usual PHP 1.00. However, a PHP 2.50 charge will be deducted from the mobile phone credits of the person who “text back” through the chikka network. The NTC released a memorandum on February 9, 2005, stating that the company has been illegally operating as a VAS provider because of its failure to register with the agency since its operations in 2002 (Bautista 2005). The commission, however, cannot provide sanctions to the operators of the website because RA 7925 does not provide sanctions for VAS violators. If a company does not register as VAS provider, the NTC cannot run after the business entity directly, but only indirectly by ordering the Public Telecommunication Entities (PTEs) to assist the agency in halting the company’s financial collection (Disini 2005). To discipline a VAS provider violator, the NTC can only order the telcos to stop charging subscribers who receive messages from Chikka. It still needs to coordinate with the concerned PTEs to enforce its regulatory powers. To achieve viable competition, the NTC must ensure that other small players must also have a good share of the market. Market competition problems could be minimized if Congress could come up with general market competition laws (e.g., anti-trust laws) that will provide clear rules for the industry and establish a competition oversight office. Although several RA 7925 provisions and executive orders were passed calling for the compulsory interconnection among telcos, they were not entirely implemented due to the NTC’s oversight and lack of guidelines (Fajardo 1999, 3).8 Assuming a proactive regulatory stance on competition issues is imperative in this regard. Although the NTC can compel the two networks to restore linkup, there were no specific rules and sanctions on the unilateral moves of some carriers to disconnect other players from their networks. Deadlock in negotiations or noncompliance would constrain the NTC to take appropriate actions. One interconnection crisis took its toll in 1999 when Globe Telecom’s 850,000 subscribers were not able to connect to the


People, Profit, and Politics

1.7 million fixed lines of PLDT, and vice versa. The dispute was highlighted by the unilateral move by BayanTel to cut off 200,000 of its subscribers from Smart. This was followed by the disconnection of Globe Handyphone subscribers from PLDT networks. PLDT argued that it was due to computer glitch while Globe ascribed the incident to sabotage. Islacom also complained of its interconnection problems with the IGFs of PLDT despite the former’s repeated requests for linkup. President Joseph Estrada needed to summon the telco executives in November 16, 1999, to an emergency meeting to resolve the interconnection mess.
Status of the Civil Society

This paper takes a non-statist “inclusionary” view of civil society as a “public sphere where autonomous groups and individuals interact with each other on matters of collective concern” (Ferrer 1997, 13). This paper has identified major civil society organizations that have been engaging the state concerning industry issues (table 4). Apparently, mass-based civil-society groups can be described as spontaneous, temporary, and exhibiting power only during certain periods (Kim 2003,122). They merely provide a backdrop of the political process between the political and business interest groups. When RA 7925 was being deliberated in Congress, no social movement organized against the Act’s contentious provisions. It needed the initiative of the Ramos administration for the social sector to be mobilized, mainly to provide legitimate support for the state’s liberalization agenda (Coronel 1998).9 Since telecommunications issues are nontraditional areas of engagement, there is a dearth of social movements active in the industry. Philippine League for Democratic Telecommunications (PLDTi) President Jonathan Domingo explained that the weak social movement is a function of the nature of issues emerging and being discussed in the sector. Telecom concerns have not been priorities of ordinary Filipinos since there are more basic and immediate issues that they have to deal with (e.g., food, shelter). Telecommunication services are perceived as means and not an end. Further, matters concerning telephone pricing, Internet,

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Table 4. Civil-society groups in the telecommunications industry
Type of civil-cociety group Consumer advocacy groups Organization 1. Philippine League for Democratic Telecommunications, Inc. (PLDTi) 2. TxtPower Research advocacy organization Business groups/stakeholders Foundation for Media Alternatives (FMA) 1. Philippine Association of Private Telecommunications Companies (PAPTELCO) 2. Philippine Cable Television Association (PCTA) 3. Philippine Chamber of Telecommunication Operators Inc. (PCTO) 4. Philippine Electronics and Telecommunications Federation (PETEF) 5. Philippine Internet Services Organization (PISO) 6. Telecommunications Users’ Group of the Philippines (TUGP)

Wi-Fi, and online privacy are considered highly technical matters that ordinary people cannot easily appreciate. Sensitive social and political issues are often the ones that reach the congressional halls, press rooms, and the attention of the public. The mobile phone text-tax issue reached its height because texting has been increasingly regarded as a basic necessity among ordinary Filipinos, especially in the National Capital Region. The expected prime mover and forerunner of CSOs in the industry— the consumer movement—is either lethargic or nonexistent. History is summoned to show that there are no strong and sustainable consumer groups in the country. Emerging organizations have been sector- and product-specific, which could best explain the fragmented nature of mass actions. The issue of increasing oil prices should have been a concern by ordinary consumers, but transportation groups and labor unions have been


People, Profit, and Politics

the ones that seize the issue by default. Further, consumer groups disintegrate whenever companies pay off and/or pacify erring complainants. Rep. Gilbert Remulla (second district, Cavite) (2004) perceives the deficiency in consumer groups as unfavorable to any legislation that aims to protect telecom consumers. In the Thirteenth Congress, he filed House Bill 2452, entitled “Truth in Mobile Telephone Billing Act,” requiring the six-pulse rate and billing per-second breakdown of the call usage of mobile phone subscribers seven days after the expiration or consumption of their prepaid cards. In August 24, 2004, a press conference on the proposal was covered by the broadcast media but it was not recognized in the print media. Remulla attributed the incident to the economic influence of telcos, which he described as the largest advertising customers of broadsheets and tabloids. Another problem is the absence of a critical mass that could rally behind his proposal. He asserted, “There are no big consumer groups and you don’t see them massing on the street rallying. You can only see them in the media saying to boycott for one day and that’s all.” The Philippine League for Democratic Telecommunications Inc. is a consumer advocacy group that emerged as a response to the PLDT metering proposal and rate balancing in early 1999. PLDTi vehemently opposed the measure and argued that telephone metering should be merely optional, alongside the current flat-rate system, if ever it is to be allowed. To demonopolize the industry, the organization once proposed that the government must consider breaking the PLDT into its component services as well as into several regional companies, just like what the US did with the AT&T. Dividing the industry behemoth could provide a level playing field to all market players. When the metering issue subsided, PLDTi continued its function as an industry watchdog. The organization, along with four other individuals, filed a case in 2001 against the telcos concerning the reduction of free texts in prepaid cards. Although a Quezon City Regional Trial Court judge dismissed the complaint on September 14, 2001, saying that it has no jurisdiction over the case, the drastic textreduction plan failed. The NTC earlier said that text is a value-added service, hence deregulated.

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The Foundation for Media Alternatives (FMA), a research-based organization, contributes to the development of scholarship on ICT for development in the country. As the sole research organization in the country focusing on ICT issues, FMA concentrates “on continuous theorizing and paradigm-building in relation to issues and concerns surrounding the emerging Information Society, by systematically gathering data for public dissemination and for the use of other ICT for development stakeholders”. FMA finished in 2003 a baseline survey on ICT use of the country’s nongovernment organizations. As an advocacy group, FMA actively participates in national and international ICT policy development processes. It represents the civil society sector in the Commission on Information and Communication Technology. The organization takes a lead role in representing the network of Asian civil society organizations to the World Summit on the Information Society (WSIS) held in Geneva in 2003 and Tunis in 2005. Supplementing the lack and inactivity of civil society organizations in the sector, private business organizations (PBOs) and associations fill in the gap. They actively interact with the government in matters directly affecting the industry. Market players often voice their concerns as part of a bigger organization and/or coalition. Since the Marcos administration, PBOs have been considered as valuable partners and stakeholders to the country’s overall development (Tigno 2004, 44). They are dynamic actors of civil society, although there is lingering doubt on the level of their social consciousness. The typical view is that they have been unaccountable, exploitative, socially irresponsible, mainly driven by profit, and are alien to prevailing social realities (de Castro 1997, 221-42). These qualities contradict the major purposes of civil society organizations—to promote public good and benefit the society in which they function (Milner 2001, 30; O’Connel 2000, 471-78). Sectoral business organizations, nonetheless, can give voice to their constituents. They can serve as political brokers that can influence state policies in the public interest (Fukuyama 1995, 1; Shills 1991, 3).


People, Profit, and Politics

State-Civil Society Interaction: Case Studies
In a liberalized industry, the state must ensure that free-market principles work properly and protect the public from any arbitrary behavior of industry actors. Unfortunately, neither state institutions nor market forces can guarantee that it can uphold public interests. This is the reason social and business sector groups emerge to serve as countervailing forces against the excesses of the state and the abuses of other market players. The following are empirical descriptions of the strategies of civil-society groups in engaging the state and the outcomes of the process. Outcomes are measured in terms of the state’s response to civil society’s demands and agenda. Two groups are selected as case studies: TxtPower on its crusade to protect the welfare of mobile phone subscribers and the Philippine Internet Services Organization on its struggle for a deregulated VoIP that will offer an alternative and cheaper telephone voice service for the public.
Txtpower and Mobile Phone Issues

TxtPower is one of the organizations that actively participated in toppling the Estrada administration during the EDSA 2 Revolution. It is a loose organization of different progressive organizations, mostly led by youth leaders and middle-class professionals. The group was founded on August 27, 2001, when Smart and Globe abruptly reduced their free-text allocations for prepaid subscribers without due consultation with the consuming public. The group believes that Short Message System (SMS) should be considered as a built-in feature of cellular phones thus should not be charged with extra costs (TxtPower 2004b). The group’s actions achieved partial success after delaying the plan of Smart and Globe to reduce free text. Globe continues to provide a minimum of thirty-five text messages for every PHP 300 prepaid load while Smart cut down its free text by 33 percent. As of January 2006, the active convenors of the organization include Anthony Ian Cruz, a net-activist; Giovanni Tapang, chairperson of the scientists’ group Agham (Advocates of Science and Technology for the People), and a physics professor at the University of the Philippines;

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Raymond Palatino, vice president of the Anak ng Bayan Youth Party; Emil Cinco, leading member of the Computer Professionals Union (CPU); Trixie Concepcion, Philippine coordinator of the Earth Island Institute and Agham secretary-general; Gerry Kaimo, net-activist and webmaster of; Atom Araullo, media personality and student leader; and Ederic Eder, editor of youth e-zine Past convenors include UP professors Tonchi Tinio and Roland Tolentino, triathlete Sandra Araullo, campus journalists Len Olea and Rey Asis, and visual artist Emil Mercado. TxtPower considers itself as the first consumer group that represented the cause of mobile phone users. Affiliated groups include Agham, Gabriela, Anak ng Bayan, Computer Professionals Union (CPU), Migrante, College Editors Guild of the Philippines (CEGP), National Union of Students of the Philippines (NUSP), Bagong Alyansang Makabayan, among others. When President Arroyo signified her intention to impose taxes on text messaging in her 2004 State of the Nation Address (SONA), TxtPower immediately responded by holding a media event titled “P1 Billion Fun Run” on August 1, 2004, at the controversial President Diosdado Macapagal Avenue10 as a symbolic act of protest against text tax and government corruption. The campaign was supported by Overseas Filipino Workers’ Laban sa TextTax (OFWLaST), arguing that the tax on text messages will certainly have adverse social effects on them. Many OFWs have been using SMS to get in touch with their children, husbands, wives, and relatives in the country. A week after, a text protest barrage was performed calling for all text users to relay the following message after receiving:
Txtrs, REVOLT! B part of history, join 2day’s cyber-rally. Snd NO 2 TXTTAX 2 d ofc of speakr JdV 0917-8101226! Join TxtPower piket @ 2pm outsyd congrs. Pls pas. (Texters, Revolt! Be part of history. Join today’s cyberrally. Send NO to Text Tax to the office of Speaker JDV [Jose De Venecia], 0917-8101226! Join TxtPower picket at 2 p.m. outside Congress. Please pass.)

Afterward, House Speaker Jose de Venecia issued a statement that he will oppose any kind of tax on text (Albano 2004). President Arroyo


People, Profit, and Politics

affirmed the speaker’s position when she released a statement supporting TxtPower’s call to junk text cuts and review the telecom deregulation policy. TxtPower enlisted the support of House party list Bayan Muna, particularly Rep. Teodoro Casiño who also leads the Alliance of Legislators against Regressive Taxes (ALERT), an association of legislators aimed to stall and destroy plans by the government to impose anti-people regressive taxes. On October 24, 2004, twenty-seven House of Representatives members, mainly from the opposition, signed a resolution filed by Sorsogon Rep. Francis Escudero expressing their collective stance that “there shall not be a tax measure, bill or enactment that shall be submitted or passed that will impose the tax on Short Message System (SMS) or ‘text messaging’ during regular or special sessions of the 13th Congress.” On May 24, 2005, TxtPower convenors spoke with legislators and submitted to the House Committee on Information and Communication Technology its position paper on House Bills (HB) 717, 1485, 2452, 2654, 3407, and 3475, all of which deal with the protection of the rights of mobile phone subscribers. The Arroyo administration’s alternative proposal to tax the windfall profits of telcos (franchise taxes) was perceived by TxtPower as another “creative way” of Malacañang to increase the cost of mobile communications (TxtPower 2004a). On March 16, 2005, the group launched the so-called Second Texters Revolt, a campaign against the VAT law in general and the telcos franchise tax in particular. All texters were encouraged to at least bombard Senator Franklin Drilon’s number with the following message: Pls stop d vat r8 hike. We r watching u n we wil not 4get! Texters n people r now in revolt! (Please stop the VAT rate hike. We are watching you and we will not forget! Texters and people are now in revolt!) A “one-minute ringtone protest barrage” was launched during the rallies at Mendiola Bridge and the Senate grounds. Representative Casiño argued that the proposed franchise tax as embodied in HB 1469 authored by Rep. Eric Singson and HB 1560 by Rep. Danilo Suarez, as well as the DOF’s own proposal for an excise tax, is worse than the original text tax proposal because it covers not only texting but voice calls, multimedia messages, WAP, GPRS, internet services,

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landline calls, even radio and television broadcasting. This will be eventually passed on to all kinds of services provided by telecommunications companies (Casiño 2004). Major telcos favored more the imposition of an expanded value-added tax and not a franchise tax or text tax (Reyes 2004).11 After a close-door meeting with telco executives, President Arroyo was convinced not to impose the franchise tax. Malacañang instead push a VAT system on telecom providers that will be raised from current 10 percent to between 12 and 14 percent (Cabacungan and Pablo 2004). TxtPower confronted other burning concerns. It initiated debates and mass actions on the issues of 1) drop calls (i.e., some subscribers being charged with calls they were not able to make), 2) the limited period imposed by telcos for the use of prepaid load credits (i.e., Smart and Globe prepaid credits must be consumed three months starting the day it is loaded), and the 3) subscriber identity modules (SIM) card listing proposal of Rep. Joseph Santiago (National People’s Coalition–Catanduanes) during the Twelfth Congress. While the SIM card listing proposal was watered down by the lawmakers when it was first deliberated in the House Committee on Human Rights, judging the measure as impractical, unrealistic, and unachievable, the other issues are currently being deliberated in the House Committees on Information and Communication Technology and Trade and Industry. The government provided several avenues to accommodate the group, but not all of them have been useful. Convenors were invited to committee hearings, formal dialogues with legislators, and government-sponsored fora but they had modest success in achieving their targets through these avenues. The group explained that agency executives offered delayed responses to the recommendations they laid down, not to mention some policy digressions politicians commit in the actual policy drafting and implementation. But as far as the convenors are concerned, the biggest stumbling block to their mission is the state’s refusal to recognize the rights of consumers due to its flawed policies of deregulation, privatization, and liberalization. Hence, the organization sees itself as having virtually no power, no recourse in the law. One of the convenors lamented that if they


People, Profit, and Politics

would file a case against a government agency, they would not surely win it because the government has hands-off policy even on issues of consumer rights. More so, there are no institutional mechanisms to protect the consumers. Any interaction with government will prove useless in the process. Overall, the organization calls for the repeal of the law deregulating the telecommunications industry, which it calls as anathema to people’s welfare. The lack of resources and formal organizational hierarchy, although not vital problems, still hampers the expansion of the organization. Problems arose when convenors have prior campaign schedules, making the all-present representation in mass action almost impossible. Nonetheless, TxtPower’s loose organizational setup is advantageous. It enables quick decision-making, action, and consensus in the group. The broad and multisectoral composition of the coalition facilitates the easy recognition by the government of its presence and campaigns. Intra-organizational linkages offer logistical assistance among members of the network, which come in the form of meeting venues, studies, focus group discussions, and launching of mass actions and campaigns. The group is looking forward to wider memberships in the next few years. A wider and bigger network can make TxtPower’s operations more comprehensive and responsive to the clamor of the mobile phone users even outside the National Capital Region. It has already established chapters in major cities of the country and one in Hong Kong. Public campaigns using text, Internet, and the broadcast media are considered the most effective means to contest state policies and solicit support from the public. The mass media was used to popularize the issue and inform the people of their communication rights. As people became more aware of the issue, they started to air their discontent with the government’s lack of protection for consumers. Hence, protest rallies of TxtPower against “text tax” received overwhelming support from mobile phone subscribers. In addition, the Internet is being maximized to propagate campaign text messages through e-mails and e-groups within a relatively short period. The group is being technically supported by the Computer

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Professionals Union and Agham in hosting its websites: and

VoIP PISO and the VoIP Question
Recent developments in Internet technology have made Voice over Internet Protocol (VoIP) a promising alternative to more expensive telephone calls. Simply put, VoIP is a technology that allows transmission of data and voice using an Internet protocol without having to pass through part or all of the facilities of Public Telecommunication Entities. A specialized form of VoIP is called Internet telephony in which a regular voice telephone call is transmitted via the public Internet, thus bypassing all or part of public switched telephone network (PSTN); hence the cheaper rates for its service. Many have discovered Skype, which offers downloadable software from its website to make VoIP calls. All calls made through the website are free, while those made by nonsubscribers can be as low as USD 0.03 a minute. It can occur between computers, between a computer and a phone, and between phones (NTC 2004, 3-4). PLDT subsidiary Netvoice Operations Manager Joseph Concio (2004) revealed that telcos have been using the technology since early 1990s. Long-distance calls by the company are partly, if not entirely being done through the VoIP system. The Internet service provider (ISP) Mosaic Communications (MosCom) president, William Torres (2004), explained that the history of the VoIP issue commenced between 2000 and 2001 when US-based VoIP providers started to charge fees for the formerly free technology. Developments in the US and other countries in classifying the VoIP have been monitored by the NTC. They coincided with the campaign of the now-defunct Information Technology and Electronic Commerce Council (ITECC) to lower the cost of outgoing calls from the Philippines to US cities. It was initiated by then Trade and Industry Secretary Mar Roxas who reinvigorated the call center industry in the National Capital Region. In November 2003, the Department of Transportation and Communications granted the telcos the exclusive right to offer VoIP services as provided by RA 7925. The Act classifies Internet service providers (ISPs)


People, Profit, and Politics

as value-added-service providers. Hence, they must first seek a legislative franchise from Congress (which is a law) and appropriate certification and permits from the NTC before they can offer the VoIP technology. They shall be allowed to “competitively offer their services and/or expertise, and lease or rent telecommunications equipment and facilities necessary to provide such specialized services, in the domestic and/or international market in accordance with network compatibility.” This was affirmed by NTC draft memorandum released in January 2004 stating that only “public telecommunications entities (PTEs) may offer voice over internet protocol (VoIP) for compensation.” The draft, prepared during the term of NTC Commissioner Armi Jane Borje stirred up serious scrutiny and comments especially from VAS providers. Five months later, the memorandum was discarded when the agency released a more comprehensive discussion paper on July 23, 2004, presenting the nature and scope of the VoIP technology. The first public hearing was held at the NTC office in November 2004, which was attended by representatives of major telcos, ISPs, and individual stakeholders. Noticeably, the meeting was filled by telcos’ legal experts while small consumer groups were not represented. Congressional hearings on the issue were started earlier in March 2005 in the House Committee on Information Technology headed by Cebu Representative and former NTC Commissioner Simeon Kintanar. Representative Clavel Martinez submitted to the committee HB 3476 entitled “The Philippine VoIP Act of 2005,” first read on December 15, 2004.
PISO vs. Telcos

The Philippine Internet Services Organization was established in 1996 and comprised of Internet access providers and businesses engaged in Internet-related services such as web design, domain registration, and wireless and software development. The organization include Brochiere Online, Compass Internet, Convergence Solutions (CSI), Easy Call Philippines, Email Company (EMC), Evoserve, Imperium Technologies, Infocom Technologies, InfoBahn, MailStation, Mindgate Systems, Virtual Asia, WebLinq, WebPhilippines, Pacific Internet, Philippines Online

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(Philonline), Weblink Philippines (WebPhil), Tridel technologies (IManila), Mosaic Communications (MozCom), and Philippine Network Foundation (PhNET). As posted on its website, the organization is “engaged in several advocacy initiatives to help promote the Internet services industry as well as play an active role in reshaping the local business and regulatory environment from one that turns a blind eye on monopolistic and anticompetitive practices to one that encourages entrepreneurship, fair competition, innovation and cooperation.” Due to industry reconfiguration and competition, membership decreased to twenty-one. Many of the original members either merged with other ISPs or lost their market share and went bankrupt. PISO first gained the attention of industry players when it collided with PLDT in early 2000 concerning the increased pricing of E1R2 leased lines by PLDT.12 The group saw the measure as the grand strategy of PLDT to increase the raw cost of ISPs and monopolize even the value-added services industry (Tabingo and Casiraya 2004). PLDT’s MyDSL service was originally priced at PHP 2,500 and can only be offered through the telcos’ own brand or its affiliated ISP. However, ISPs cannot compete with the pricing because their raw and resale value of the service is already at PHP 2,700. “PISO ISPs do not offer MyDSL because the terms are not good. The system is designed [so] that we have become just a reseller,” PISO Director Jayson Yu (2004) said in an interview. The group was also dismayed over the NTC’s ruling on the Wi-Fi issue. The group argued that the initiative to regulate the Industrial, Scientific and Medical (ISM) frequencies (e.g., 2.4 GHz and 5 GHz) goes against the International Telecommunications Union’s ruling that they are “unregulated frequencies” to be available for public and private use without the need for government regulation and franchises. The Wi-Fi technology should be “practically free,” especially on hot-spots area (but regulating the maximum power of the base device), the local area network, and the campus area network, which operate wireless technology. On the issue of the VoIP, PISO maintained that it should be considered as a value-added service and not as a normal telecommunication voice


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service. There is consensus among ISPs and similar business groups that preventing the growth of the VoIP industry is detrimental to the public who should reap the benefits of emerging technologies. J.J. Disini (2005) of the UP College of Law wrote that any failure to deregulate the technology would provide opportunities for foreign players to dominate the industry. Further, local business entities and players must be given an opportunity to use the technology in minimizing the costs of their operations. Telcos were silent on the VoIP issue when it first surfaced in 2001. When ISPs started to assert their collective position, the telcos commenced their fight mostly by hurling legal arguments at the NTC and the VAS providers. Local telcos are understandably anxious that VoIP technology could render their usual circuit-switching networks obsolete. PLDT, for instance, has launched in early 2005 its PHP 10 unlimited calling (landline to mobile phone and vice versa) to maximize the use of its switching networks. Although majority of telcos support the classification of VoIP as a telecommunication service, they have variegated ways of justifying the argument. In a forum organized by the Telecommunication Users Group of the Philippines (TUGP) on March 31, 2004, at Mandarin Hotel, Makati City, May Sto. Domingo, Philcom assitant vice president for business solutions, said that VoIP is already in itself an “opportunity to bring back what revenues are currently being lost by telcos because of the emerging technology.” The Philippine Chamber of Telecommunication Operators Inc. (PCTO)—composed of BayanTel, Capwire, Digitel, Extelcom, Globetel, Innove, PAPTELCO, Piltel, PHILCOM, PLDT, SMART, and TTPI— contends that any process that relays and receives voice is a telecommunication service irrelevant of the means it is being transmitted. Although VoIP is a mix of voice and data technologies, the application is still voice in nature. PLDT submitted a separate position paper saying that the VoIP has always been a telecommunication service, citing the 1995 landmark case between PLDT and NTC–Eastern Telecommunications Philippines Inc. Bell Telecoms supports this position saying that only telcos must be allowed to offer VoIP to the public. In a

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statement made by Edgardo Reyes, chairman and CEO of the company, he explained that LEC services are still the most expensive part of telcos’ operation; hence the need to first recover the investments of telcos in putting up their facilities. This cannot happen when VAS providers and ISPs will compete in the process. Eastern Telecoms offered a compromise. It stated that operators should be allowed to offer VoIP to the public for compensation, provided that they will only be agents or resellers of telcos’ services. Meanwhile, the Philippine Electronics and Telecommunications Federation (PETEF), an organization of industry suppliers, proposed a slow but sure approach. Government should create a transition program before implementing a full-blast policy on VoIP. PETEF particularly recommends the categorization of Internet data applications as either regulated or nonregulated. The group is cautious in endorsing the full deregulation of the technology because it foresees that only the big telcos will reap the benefits of liberalization. Likewise, ISP Global Reach ebusiness agrees to the statement that regulation will scare investment in VoIP business. Any regulation, according to the company, “must be for the purpose of effectively supporting the needs of the public and the consumers.” Veering away from the debate, the Philippine Cable Television Association (PCTA), an organization of companies serving 90 percent of local cable subscribers, stated that VoIP should be classified as a unique technology. In a similar vein, the Telecommunications Users Group of the Philippines (TUGP)—composed of big companies such as ABS-CBN, San Miguel Corporation, and major banks in the country—contends the technology should be treated neither as a traditional voice nor as a data service. Under the leadership of Commissioner Ronald Solis, the NTC has been projecting itself as a democratic institution that strives to provide a tripartite solution which will be fair and just for the ISPs, telcos, and the larger public. BayanTel’s VoIP Service Manager Theopatrick Ferrer (2004) shares this observation, saying that the current NTC leadership is more responsive to the concerns of telcos compared with previous


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administrations. On March 30, 2005, the NTC released a draft memorandum classifying VoIP as a VAS. It states that the VoIP is primarily an enhanced telecommunication service provided by telcos (NTC 2004, 4-6). After substantial consultations, the agency finally ruled out on August 16, 2005, that VoIP is a value-added service. NTC Deputy Commissioner Jorge Sarmiento asserted that VoIP was classified as a VAS in the spirit of RA 7925. Sarmiento explained that the law has become outdated and must be amended. The move was also premised on the fact that different countries have been pressuring the country’s technology executives to classify VoIP as a VAS, the most prominent of which is the US-based communications service giant AT&T Corp. Earlier, then-NEDA Secretary Romulo Neri (2004) revealed that the push for a liberalized VoIP is integrated in the “microeconomic thrusts” of the Arroyo administrations’ Medium-Term Philippine Development Plan for 2004-2010. Many industry players, including PISO, have lauded the NTC’s rules, effectively favoring the deregulation of the budding VoIP sector.

This paper presented an empirically-grounded analysis of state-civil society relations in the telecommunications industry. One prominent observation is that liberalization has a direct impact on the way civil society engages the state and the market actors. State’s weaknesses to effectively control the market pose serious challenges to CSOs. This means that they do not only have to engage the government (to rectify its shortcomings and failures) but also have to contend with industry players, which have more resources and political clout. The weak force of mass-based civilsociety groups can be gleaned from their inability to participate in important fora and debates. With the lack of representation, state agencies obtain only the opinions and demands of dominant market groups. This explains why the business sector groups influence more policy outcomes. Both TxtPower and PISO utilized formal and informal means of intervention. To some extent, their perception of the state determined the strategies they utilized. Confrontation defined the relationship between

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the state and TxtPower because of the latter’s negative perception of the former as the protector of the interest of the dominant, elite class. TxtPower recognizes its limitation in influencing the government’s deregulation policies. In fact, it sees itself as virtually having no power in the context of a deregulated telecommunications industry. Resorting to indirect, informal intervention like mass actions is deemed more effective in gaining political support. Political leaders are often enticed to support advocacies that evoke wide public support. Street protests, petition signing, mass education in fora and seminars, public consultation talks, media press conferences, and networking with legislators are essential in achieving this end. On the opposite, cooperation characterizes the interaction among the ISPs, telcos, and NTC officials in resolving the VoIP question. This can be attributed to the common goal of the government and industry stakeholders to end the legal impasse that has hampered the development of the VoIP technology for more than a decade. Stakeholders, especially the telcos, actively participated in public consultations with the view of influencing the NTC’s ruling on the issue. Discerning the right venue of engagement is crucial in the success of any campaign. TxtPower first organized the public for a concerted action. This was facilitated by forging alliances with various groups in different sectors. Upon having the critical mass of supporters, TxtPower began to lobby politicians and policymakers in Congress. Simultaneous actions to mobilize the public through massive education and active engagement of the state provided more impetus for ongoing campaigns. In the same manner, PISO constantly participated in public discussions and fora initiated by the NTC and industry organizations. The two case studies have shown how internal and external resources could produce successful state-civil society engagement. PISO’s technical know-how helped justify the VAS nature of the VoIP technology and debunk the legal arguments of the telcos. TxtPower, with the support of the Computer Professionals Union (CPU) and other like-minded organizations, maximized the use of the Internet to disseminate information and expand the reach of its campaigns. TxtPower did not find it difficult


People, Profit, and Politics

to organize campaigns because its coalition members already have their own constituents to be mobilized. Both organizations maintain a wide range of membership where they can extract resources. External opportunities facilitate the effectiveness of the two groups especially in maximizing state institutional openings for policy influence. The NTC under Commissioner Solis has shown deep interest in democratizing the policy making process by holding numerous consultations on important industry concerns. TxtPower benefited from having political allies in the Senate and the House of Representatives. Attendant events provided for the immediate response of the government. Malacañang was compelled to pull out the plan to tax the SMS technology because it created significant political pressure on the president. Support from the public was easily gained because of the widespread use of mobile phones. The prevailing notion is that imposing a tax on what has already been considered as a basic necessity must be blocked. Similarly, the NTC took a proactive role in resolving the VoIP question because of the mounting pressure from industry players to end the legal dilemma. There was a growing recognition that VoIP could offer an alternative means to cut the cost of doing business in the country, as expressed by exporters, ISPs, and other market players. Debates on the VoIP issue also coincided with the Arroyo government’s plan to liberalize the industry more as written in the Medium-Term Philippine Development Plan for 2004-2010. Overall, there is a need for a sustained capacity building of civil society as a first step in establishing a reform coalition that would not only be reactive to emerging issues but would also offer long-term and strategic solutions to major industry concerns. The government must provide an environment for this initiative to develop. One significant step is for people’s organizations (POs) and consumer groups to be represented in advisory councils of regulatory bodies. In this way, CSOs can intervene in or assist the DOTC, the CICT, the NTC, and other related agencies in formulating plans that are responsive to the needs of the public. State-civil society relations can also be strengthened in the area of technical cooperation. This is to provide government leaders

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not only a working knowledge but also a deep appreciation of the evolving nature of information and communication technologies. Academic institutions are good venues to initiate policy debates among the civil society, private sector, and the government. The theoretical foundations of the telecom reforms discourse must be cultivated to elevate the consciousness of the public and bring about a comprehensive telecommunications reform agenda.

1. Major telcos compete in providing the cheapest service in the market. Digitel brand SunCellular first offered in 2004 its unlimited call plan (24/7) to Sun-toSun mobile phone numbers. Globe started in March 2005, through its Touch Mobile brand, its thirty-day promo of unlimited one-month Touch Mobile to Touch Mobile calls and texts for PHP 300 and PHP 50 for five days of unlimited text messaging. PLDT’s two wireless units, Smart Communications Inc. and Pilipino Telephone Corp. (Piltel), launched its unlimited call scheme (dubbed 25/8) in March 2005 to counter SunCellular’s and Innove’s mobile phone subscription plans. See Pulse/PNA 2005. One major reason is that mobile subscription costs only around PHP 300 a month through a prepaid card with text messaging service, compared to the minimum PHP 600 monthly subscription to a fixed telephone. Cellular phone users also enjoy the luxury of mobility and a personalized number, which they can change anytime just by purchasing a SIM card. The chairperson of the CICT is part of the DOTC leadership. He/she directly reports to the president about ICT matters and to the DOTC secretary for his/ her agency responsibilities. PLDT’s predominance can be traced to the adoption of the American colonial government’s model of natural monopoly. By the virtue of the 1928 Philippine Legislature Act 3436 passed on November 28, 1928, PLDT was first given a fifty-year franchise to develop the telecommunications infrastructure of the country. The franchise was extended until 2028. The Marcos government helped Ramon Cojuangco, the first PLDT president, and his associates acquire control over PLDT while the Aquino administration nurtured the company by placing individuals in the company who could safeguard the interests of the Cojuangco family.

2. 3.




People, Profit, and Politics


Under the text scam, hoax messages are being sent to the unsuspecting victims using the name of the Bangko Sentral ng Pilipinas, the Philippine Charity Sweepstakes, the Philippine Amusement and Gaming Corporation and other institutions advising the victims about winning a huge amount of prize. The swindlers often instruct their prey that the latter should first deposit a considerable sum of money to the former’s bank account, allegedly for tax payments and other fees, as a requirement to getting the prize. 7. VAS is defined as enhanced services beyond those ordinarily provided for by local exchange operators, inter-exchange operators and overseas carriers, including Internet services. A VAS provider does not set up its own network and relies solely on the transmission, switching and local distribution facilities of enfranchised telephone companies. Hence, it does not need to secure a franchise in order to operate but only a registration with the NTC (RA 7925, article 1, section 3h). 8. Interconnection guidelines can be found in 1) RA 7925 (article 2, section 4g; article 3, section 5c; article 4, sections 8d, 9a, 11b; article 6, section 18), 2) EO 59 (section 56), and 3) EO 109 (article 5, sections 22 and 28). 9. With the help of his topnotch technocrats, former president Ramos utilized the social sector to further his demonopolization project. They formed the group MorePhones to assail PLDT’s inefficient service. MorePhones accentuated the distrust of the people toward the inefficient service of PLDT. The campaign lasted for about three months and was characterized by anti-PLDT press releases and numerous fora and press conferences. 10. The road was named after a former Philippine president and father of President Gloria Macapagal Arroyo. The government spent PHP 1 billion to construct the one-kilometer avenue. 11. Telcos are already paying a 10 percent VAT on all services, 32 percent income tax, 10 percent overseas communication tax, and other various fees and charges for licenses to the National Telecommunications Commission. 12. An E1/R2 is a leased line composed of 30 lines that can accommodate 30 simultaneous calls at 56 kilobytes per second (kbps). PISO filed four charges against PLDT. First, for its unreasonable and discriminatory pricing of E1/R2 lines. Second, for its involvement in predatory pricing in order to eliminate competition. Third, for its delayed action on the request of PISO on access to its DSL infrastructure which is tantamount to denial of access. And fourth, for its denial of access regarding the request of PISO to access its VIBE Service for domestic dial-up Internet service.

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Abrenica, Ma. Joy V. 1999. Reforming the telecommunications industry: Prospects and challenges. Economic Policy Agenda Series 3. Foundation for Economic Freedom. Albano, Noel. 2004. No to tax on text messaging: JDV. House of Representatives. http://www.congress. (accessed August 10). Aldaba, Rafaelita. 2000. Opening up the Philippine telecommunications industry to competition. World Bank Institute: World Bank. Alegre, Alan (executive director, Foundation for Media Alternatives). 2004. Interview by Ronald C. Molmisa. Tape Recording. September 9. Alonzo, Ruperto, and Wilbert San Pedro.1997. Infrastructure and sustainability of growth in the Philippine. Asian Development Outlook: 1996 and 1997. Asian Development Bank. Bautista, Kerlyn. 2004. Use of landlines up in 2004: But number of unused lines still massive and mobile still rules. IT Matters. news_05042005a.html (accessed September 30). ———. 2005. NTC stops mobile services. IT Matters. http:// www.itmatters. (accessed February 10, 2005). Cabacungan, Gil C., and Carlito Pablo. 2004. Telcos convince Arroyo: Palace opts for hiked VAT over franchised tax., December 06. http:// (accessed December 6). Cabanda, Emilyn. 2002. A comparative study of Asian telecommunications policy reforms: Japan, Malaysia, and the Philippines. E-ASPAC. http:// Casiño, Teodoro. 2004. Franchise tax on telcos worse than text tax. Press statement. December 2. Collander, David, ed. 1984. Neoclassical political economy: The analysis of rent seeking and DUP activities. Cambridge MA: Ballinger. Concio, Joseph (operations manager, PLDT-Netvoice). 2004. Interview by Ronald C. Molmisa. Tape recording. November 11. Coronel, Sheila S. 1998. Monopoly. In Pork and other perks, corruptions and governance in the Philippines, ed. Sheila S. Coronel, 112-149. Quezon City:


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Philippine Center for Investigative Journalism. De Castro, Isagani. 1997. Profit and social consciousness in the business sector. In Civil Society Making Civil Society, ed. Miriam Coronel, 221-42. Vol. 3 of Philippine Democracy Agenda. Quezon City: Third World Studies Center. Disini, J.J. 2005. VAS and VoIP. Tales from Disiniland. blogs/disini/index.php?item=vas-voip&category=VoIP. Domingo, Jonathan (chairman, PLDTi). 2004. Interview by the author. Yahoo Messenger. November 10. Esfahani, Hadi Salehi. 1994. Regulations, institutions, and economic performance: The political economy of the Philippines’ telecommunications sector. Policy Research Working Paper 1294 (April). The World Bank. Fajardo, Rod. 1999. Interconnection: One player too many? Philippine Telecom Digest, no. 38 (July). Ferrer, Miriam Coronel. 1997. Civil society: An operational definition. In Democracy and Citizenship, ed. Ma. Serena Diokno, 5-15. Vol.1 of Philippine Democracy Agenda. Quezon City: Third World Studies Center. Ferrer, Theopatrick (service manager, BayanTel VoIP). 2004. Interview by Ronald C. Molmisa. Tape Recording. November 19. Foundation for Media Alternatives. About FMA. about_fma.html. Fukuyama, Francis. 1995. Trust. New York: The Free Press. Heceta, Kathleen.2004. Interconnection: A major regulatory challenge. Paper presented at Asia Pacific Policy and Regulatory Forum, Brunei Darrusalam, May 19. Hudson, Heather. 1997. Global connections: International telecommunications infrastructure and policy. New York: Van Nostrand Reinhold. International Telecommunications Union (ITU). 2002. World telecommunication development report: 2002 executive summary (reinventing telecoms). Geneva, Switzerland: International Telecommunications Union. Kim, Dong-Yeob. 2002. The politics of market liberalization: A comparative study of the South Korean and Philippine telecommunications service industries. Contemporary Southeast Asia 24 (2): 344-45. ———. 2003. The political economy of telecommunications service market liberalization: A comparative study of South Korea and the Philippines. PhD diss., University of the Philippines.

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Kitschelt, H. 1986. Political opportunity structures and political protests: Antinuclear movements in four democracies. British Journal of Political Science 16: 57-85. Lee, Cassey. 2002. Telecommunications reforms in Malaysia. Paper no. 20. Manchester, UK: Center on Regulation and Competition. Migdal, Joel S. 1987. Strong states, weak states: Power and accommodation. In Understanding political developments, ed. Myron Weiner and Samuel P. Huntington, 391-431. Boston: Little Brown. Milner, Andrew. 2001. Civil society: Continuity and change. London: The Commonwealth Foundation Citizens and Governance Programme. National Economic and Development Authority (NEDA). 2001. Medium-Term Philippine Development Plan (2001-2004). Manila: National Economic and Development Authority . National Telecommunications Commission (NTC). 2002. Annual Report. Quezon City: National Telecommunications Commission. ———. 2004. A discussion paper on Voice over Internet Protocol. NTC. http:/ / (accessed July 24). ———. 2005. NTC consultative document on the development of a competition policy framework for the information and communications technology sector. NTC. (accessed December 16). Neri, Romulo. 2004. The national development agenda: The task ahead. Presentation at the Third World Studies Center’s Academe Meets the Government, Claro M. Recto Hall, Faculty Center, UP Diliman, September 9. Obien, Maria Catherine Advincula. 1998. Telecommunication deregulation competition in the Philippines (1993-1996). MA thesis, Michigan State University. O’Connel, Brian. 2000. Civil society: The underpinnings of American democracy. Nonprofit and Voluntary Sector Quarterly 29 (3): 471-478 . Ohmae, Kenichi. 1994. The borderless world: Power and strategy in the interlinked economy. London: Harper Collins. Patalinghug, Epictetus. 2004. Wireless applications for the digital divide: Philippines paper presented at Asia Pacific Conference on Emerging


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Technologies, “The Challenge of the Mobile Revolution and the Digital Divide,” Renaissance Hotel, Seoul, South Korea, May 10-12, 2004. Pulse/PNA. 2005. Philippine GDP grows 4.6% in first quarter. Asia Times Online, June 1. (accessed June 8, 2005). Remulla, Gilbert (representative, Congress). 2004. Interview by Ronald C. Molmisa. Tape Recording. November 23. Reyes, Mary Ann. 2004. PLDT boss Manny Pangilinan bucks proposed telecom franchise tax. (accessed December 3). Serafica, Ramonette. 1998. Was PLDT a natural monopoly? Telecommunications Policy 22, no. 4/5 (May/June): 359-70. ———. 2001. Competition in Philippine telecommunications: A survey of critical issues. DLSU-Manila: CHED Center of Development in Business and Management Education. Shills, Edward. 1991. The virtue of civil society. Government and Opposition 26 (1): 3-20. Shooshan, Harry, and Peter Temin. 1999. Telecommunications in the 20th century. Strategic Policy Research. Smith, P. 1995. End of the line for the local loop monopoly? In Public policy for the private sector. The World Bank. Strange, Susan. 1996. The retreat of the state: The diffusion of power in the world economy. Cambridge: Cambridge University Press Press. Tabingo, Manolette, and Lawrence Casiraya. 2004. ISPs file complaint vs PLDT. IT Matters. (accessed September 30). Tigno, Jorge. 2004. Involving the private business sector in local development planning: The case of private business organizations (PBOs) in Negros Occidental. In People’s initiatives: Engaging the state in local communities in the Philippines and Thailand, ed. Glenda Wui and Chantana Banpasirichote, 43-83. Quezon City: Third World Studies Center. Torres, William Torres (president, Mosaic Communications). 2004. Interview Ronald C. Molmisa. Tape Recording. October 27. TxtPower. 2004a. Cyberprotest successful, will continue. Press release. August 11.

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———. 2004b. Democratic space: Here’s what we get for making the Philippines the world’s text capital: Government allows us to be victimized by highway robbers. Press release. July 11. Yu, Jayson (director, PISO). 2004. Interview by Ronald C. Molmisa. Tape recording. September 27.


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Conclusion: Palliatives for “Globalization with a Human Face”
Teresa S. Encarnacion Tadem


n determining whether globalization has indeed brought about positive or negative outcomes in the concerned industries—vegetable, hog, garment, and telecommunications—the case studies initially looked into the state of these industries before trade liberalization.1 The nature of state-civil society engagement during this period was also examined. Among those studied, the Philippine vegetable industry, prior to liberalization, had generally been the most underdeveloped and lacking in government support, although it had survived as it held a monopoly on its target domestic market. The situation is different for the garment industry, which experienced growth in the past three decades on account of the MultiFiber Arrangement (MFA) whose quota system assured local garment manufacturers overseas markets for their products. Garments became a major dollar earner for the country through the MFA, even as the industry benefited from the state’s export-led industrialization policy. Similarly, the hog industry, though not export-driven, profited much, buoyed by the Filipinos’ penchant for pork. Though industry players have expressed their apprehensions regarding the importation—and smuggling—of meat products, profit from hog raising can still be realized. As for the telecommunications industry, the absence of market competition before liberalization had left it in dire straits. The introduction of new players in


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the market, however, spelled more effectiveness and efficiency, as well as options for the consumers.

Globalization and the Nature of State-Civil Society Engagement
The case studies focus on civil society engagement in the vegetable, garment, and hog industries, which are struggling against the ill effects of trade liberalization; and the telecommunications industry, which profited from globalization. Civil society consists of the stakeholders who are directly affected by the problem and may entirely benefit or suffer from the outcomes of the engagement in terms of policy response. Based on the discussion in the introduction, those that can be categorized as profit civil-society organizations (CSOs) are the farmers’/ peasant organizations in the vegetable industry, and the owners of the garment factories and their workers. The hog industry has at least seven major stakeholders; the case study focuses on the hog farmers and the feed millers, as well as other players outside the hog industry, i.e., the meat processors, slaughterhouse operators, and the hog and meat dealers. The telecommunications companies’ (telcos) civil society includes the Internet service providers (ISPs). The consumers, who played an important role in the telecommunications industry, may also be considered part of CSOs. The nonprofit CSOs in the vegetable industry consisted of political blocs, nongovernment organizations (NGOs), coalitions, and the church. These groups not only took on commodity-specific engagement of the state but also tackled issues concerning agricultural trade liberalization or even the Philippine economic framework in its entirety; thus, on some occasions, these groups were actually advocating for policy reforms that they believe would benefit the entire agricultural sector and not exclusively the vegetable industry. Global CSOs, on the other hand, were found in the garment industry as the workers linked up with global CSOs engaged in protecting workers’ rights.



The researches recognized the role of consumer groups in these industries, but with the exception of the telecommunications sector, these groups did not figure prominently in the debate on the positive or negative impact of globalization in relation to the industries being studied. These include the major consumer groups in the Philippines, such as the Consumer Union of the Philippines (CUP), one of the biggest consumer organizations in the country; the Consumers Federated Groups of the Philippines Inc. (CFGP), a private organization that works for the welfare and protection of consumers; and the Citizens’ Alliance for Consumer Protection (CACP), which has been part of a worldwide social movement since its founding days in the late 1970s (Directory of Consumer Organizations). These consumer groups each have different advocacies. The CUP, for example, focused on opposition to electric rates and airline and other transportation fares. It also campaigned against the importation of sugar and rice, and the need to test products and assure their quality. The CFGP is mainly concerned with monitoring prices and quality of prime commodities, and assisting consumers in seeking redress for their complaints. The CACP, on the other hand, made its mark in protesting oil price hikes during the Martial Law period and called for the promotion of locally produced goods. It was also concerned with exposing questionable goods and services and opposing institutions that were harmful to consumers (Directory of Consumer Organizations). Other consumer groups were established for even more specific reasons. The Coalition for Consumer Protection and Welfare (formerly Coalition 349), for instance, was organized as a result of the Pepsi “Numbers Fever” marketing scandal in 1992, which was characterized by “changing the rules while the game was being played.” The Nationwide Association of Consumers Inc. (NACI), on the other hand, was “born out of the need to protest illegal pyramid schemes” (Directory of Consumer Organizations). No prominent consumer groups emerged out of the impact of globalization on the garment, hog, and Benguet vegetable industries, i.e., for cheaper garments, pork, and vegetables, respectively. Most probably, the consumers found themselves benefiting


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from the cheaper products in these industries, and so, why protest against trade liberalization?
Before Trade Liberalization: CSOs’ Bargaining Leverage vis-à-vis the State

For the vegetable and hog industries, trade liberalization began during the country’s ascension to the World Trade Organization’s (WTO) rules and regulations, which had a direct impact on these two industries. During the same period, in the Ramos administration, the telecommunications monopoly was broken up beginning in 1992. Trade liberalization for the garment industry, on the other hand, began in the 1970s under Marcos’s martial law regime, when the state pursued an export-oriented industrialization program under the auspices of the World Bank and the International Monetary Fund (IMF). Therefore, statecivil society relations in the industry was discussed within the context of the shift from an authoritarian to a democratic regime, i.e., in 1986. One may also consider this period as the “pre-neoliberalism” period in the garment industry, in which the authoritarian state had a heavy hand in determining the industry’s development thrust. A major question that emerged during the period was whether the process of democratization had a distinct impact on state-civil society relations. The Benguet vegetable farmers before trade liberalization exercised little political clout to gain state support for their industry despite its importance to the province’s economy. The weakness in their bargaining leverage may have stemmed from the lack of demand for vegetables. But because these farmers enjoyed a sort of market monopoly, there had been no need for them to engage the state. Also, vegetable farming is a high-risk enterprise, providing farmers very little incentive. Furthermore, vegetable is not a political (or major) crop in the Philippines insofar as the number of farmers, the total area planted/harvested, and its contribution to the economy (GDP, gross-value added, etc.) are concerned. In the era of globalization, instead of fighting for government support, the farmers simply considered alternative means of livelihood.



The same cannot be said of the garment and hog industries. As one of the country’s top dollar earners, the garment industry’s captains enjoyed a privileged position, particularly with the MFA and the demand for Philippine exports as facilitated by the boom in garment industries in the First World. But state-civil society engagement in the garment industry had differential impact on the stakeholders. That is, the owners/employers had the bargaining leverage vis-à-vis the state because they were the ones who profited from the earnings. However, the same could not be said of the industry’s laborers. As pointed out in the case study, workers have been exploited not only in terms of low wages but also in terms of inhuman working conditions. This had been exacerbated by the political dispensation at the time, i.e., the Martial Law period, in which political and civil rights were curtailed. Thus, for example, the workers could not strike. Stripped of their political rights, the workers, like the vegetable farmers, also did not have the economic clout to engage the state. But unlike the vegetable farmers, the garment workers benefited from the labor unions, particularly those organized by the militant Left movement, i.e., those identified with the Communist Party of the Philippines (CPP), which strengthened particularly during the Martial Law period. The broadening protest movement against Marcos’s repressive regime provided the workers the political opportunity to organize and demand for higher wages and better working conditions. One, therefore, had a situation in which profit CSOs were allied with nonprofit CSOs. It was unfortunate that, first, the Left did not organize the workers in a sectoral manner, i.e., attention was given to the sector in general and not the specific demands of each sector. Second, workers’ rights were integrated into the overall revolutionary struggle, so that the Left was more concerned with what the workers’ movements could contribute to the overthrow of the government and the establishment of a revolutionary society rather than what kind of reforms could improve the workers’ conditions. And lastly, even at the height of its organization, only 10 percent of the workers were organized. The hog industry apparently saw no need to engage the state since it has always been a profit-making venture. And even if it had to, it had the economic clout to pursue such an engagement.


People, Profit, and Politics

As for the telecommunications industry, because of the decades-old monopoly of the Philippine Long Distance Telephone (PLDT) Company, there was also no pressing need to engage the state. This was especially so when it was taken over by the government during the Martial Law period. During the Aquino administration, the PLDT was perceived as “protected” from other sources of competition as then-President Corazon Aquino’s relatives had interest in the company. These “pre-trade liberalization”/“pre-neoliberalism” experiences reveal that in terms of state-civil society engagement, those with economic clout, such as the garment industry, can engage the state and gain favorable policies, helped by the world demand for garment exports. On the other hand, the hog and telecommunications industries found no reason to engage the state because the former was doing well on account of the domestic demand, and the latter enjoyed a monopoly. The garment workers engaged the state through the labor unions, and the demands were framed not in terms of industry reforms but the need for radical change in society.
Arguments for or against liberalization

The assessment of the impact of liberalization on the sectors studied during the globalization period shows similarities and differences in perspectives. Liberalization’s positive effect is best seen in the telecommunications industry, which saw new players in the market and therefore more options for the consumers. Foreign investors forged partnerships with local companies; more phone lines were installed; and, since 2000, there has been a phenomenal growth in cellular and mobile telecommunication services (CMTS). There has also been maximum utilization of the short message service (SMS) or “texting” in many parts of the country. Healthy competition among industry players, favoring the consumers and other local players outside the industry, has also been another positive impact of globalization. Liberalization meant something else for the hog industry: cheaper imports not only of pork but also of other low-priced meat—beef, buffalo



meat, and poultry—could bring about a shift in consumption patterns, thus keeping other local players from having a complete monopoly. On a wider sphere, globalization has also opened up spaces for transnational movements to bond for a common cause. For example, the garment industry has links with local and global networks to uphold workers’ rights, such as the Clean Clothes Campaign. Losing out to cheaper imports One major negative impact for the industries, however, is the loss of profits for the producers in the vegetable, garment, and hog industries on account of tariff reduction as directed by the WTO and the government’s unilateral action. Impacts differ, however, across the industries, even as their main concerns have to do with tariff, import, and quota. For example, since the ratification of the WTO agreement, the Philippines has consistently imported less pork and poultry meat than what the minimum access volume (MAV) agreement stipulates. This means that the threat of imports to the domestic hog industry has not yet fully materialized (Habito 2002). Despite the closure of several factories because of cheaper imports, the garment industry continues to be one of the country’s dollar earners. However, it is heavily dependent on imported raw materials—about 95 percent of its fabric and textile requirements are imported because the price of local textiles is relatively higher than the prevailing world price. Also because it is dollar-dependent export, it is vulnerable to fluctuations in the world market and the protectionist policies of importing countries like the US and the European community. Sadly for the Benguet vegetable industry, globalization has driven the last nail on its coffin. The class bias That globalization is favoring the rich is also seen in the experiences reported in the four case studies. For example, cheap labor and long working hours characterize the garment industry, in an effort to compete with other


People, Profit, and Politics

garment-producing countries. This situation is epitomized by the garment subcontracting industry wherein the workers are not given the opportunity to unionize. Furthermore, there persists the practice of part-time, temporary, and casual work. Women, who comprise the majority of the industry’s workforce, are the biggest victims. Capital for garment industries has moved to production sites that offer better opportunities for profit accumulation, i.e., lower wages. Class bias: An issue of governance or philosophy of development? At the industry level, the four case studies reveal that the state supports liberalization in industries where the players are “weak,” as in the vegetable and garment industries, and allows for monopolistic behavior in an industry where the players are “strong,” e.g., the telcos. The state has been passive on the issue of telecommunications market services. It has even encouraged monopolistic behavior by protecting strong ties with telco executives on account of their contribution to the national treasury. Are these more of an issue of governance or the philosophy of development, i.e., neoliberalism? What emerges in the case studies is that this is neither an either/or question nor are they mutually exclusive. Neoliberalism breeds a particular form of governance, which makes it difficult to address socioeconomic inequalities. That is, it is not concerned with the redistribution of wealth. It argues that a market economy under the auspices of liberalization will bring about the trickle-down effect. But as critics of globalization have pointed out, and what has emerged in the case studies as the class bias, globalization has witnessed the richer states becoming richer and the poorer nations becoming poorer. Moreover, within the respective societies, the rich are becoming richer while the poor are becoming poorer. What is seen particularly in telecommunications is the elite’s capture of the state whereby the state has allowed for monopolistic tendencies. Although globalization is viewed as a means to end the “patrimonial state,” which is captured by patronage politics and is lacking the “vision, autonomy, and bureaucratic capacity necessary to implement a development program,” this is really not the case (Budd 2005). Globalization has even aggravated socioeconomic inequalities because of



the unequal competition in a country where there is a wide gap between the rich and the poor. Thus, it seems that globalization has facilitated the elite capture of the state. The powerless in the person of the Benguet vegetable farmers and the garment workers have asked for state intervention in the form of safety nets. But this also goes against the very tenet of neoliberalism, which demands no state intervention. Neoliberalism states that if you cannot compete, you wither away. Thus, there is actually no room for governance as neoliberalism sees a minimal role for the state. As argued by Jomo (2006): “The ‘retreat of the state’ in much of the developing world in recent decades has involved a generally reduced role for government, including the capacity to lead and sustain development, as well as its progressive social interventions.” The reality, therefore, is that globalization falls short of pushing the democratization process in a country where socioeconomic inequalities prevail. Thus workers in the garment industry, for example, are exploited even more now because worldwide cutthroat competition has become more intense. If they do not allow themselves to be exploited, they lose their jobs as their factories fold up upon failing to compete. The same argument could also apply to the intensification of smuggling with globalization. One can argue that this is a governance concern and cannot be blamed on globalization. But this brings again the reality of the elite capture of the state, which allows for smuggling. The only way to end this is to address the income inequalities in society to empower the majority to put an end to the corruption of the elites. Neoliberalism as a philosophy of development, however, does not address this concern. Worse, the state is hostage not only to the elites but also to international financial institutions (IFIs) that pressure the Philippines, for example, to adhere to further liberalization in exchange for much-needed loans and economic assistance. Favoring the majority at what cost? Globalization is also seen as favoring the “interests” of the majority (e.g., the consumers) vis-à-vis the stakeholders (e.g., the farmers in the Benguet vegetable industry and the workers in the garment industry). But


People, Profit, and Politics

at what cost? The cost lies in the aspect of the sustainability of an economy that can no longer compete with foreign goods, resulting in the ultimate deaths of key industries, i.e., vegetable, hog, and garments. Based on the case studies, local producers argue that globalization does not provide an environment conducive to the creation of political opportunities for long-term development, particularly in the development of a domestic market for local products. With globalization’s class bias, even if the imported vegetables, pork, and garments are cheaper, who can afford to buy these? Certainly not the Benguet vegetable farmers and the garment workers who have been laid off because their industries can no longer compete with their foreign counterparts on account of liberalization. There is need, too, to disaggregate the consumers, particularly with regard to those who can actually afford to eat three meals a day and those who cannot. Certainly these are not the farmers, the workers, and their families who have lost their sources of livelihood.
The Objectives of Engagement

State-civil society engagement has to do with how the industries’ stakeholders adversely affected by globalization, particularly with regard to the profits they earn, attempt to address the issue politically. Politics here is defined as “a process whereby a group of people, whose opinions or interests are initially divergent, reach collective decisions which are generally accepted as binding, on the group, enforced as common policy” (Miller 1991, 390). For the stakeholders, the arena for intervention is the state. The framework used is the liberal-relational approach to state-civil society engagement, which looks at the possibilities of forming alliances with state elites. At the microlevel, there is the call for safety nets in the vegetable and garment industries to keep these industries from dying. There is also a call for state regulation as a necessary countervailing force against market power, as exemplified by the telecommunications industry, in which there must be a fair distribution of market power parallel to the creation of an environment that discourages monopolistic behavior. For example, the



telcos did not want the independent ISPs to provide the Voice over Internet Protocol (VoIP), claiming that this fell under their jurisdiction. ISPs could provide this service at a cheaper rate, but this would pull away profits from the telcos. The situation required a strong and neutral state regulator to assure upfront competition. Engagement also seeks the participation of the affected sectors in policy making. As pointed out in the Benguet vegetable industry, the Philippine government has created a political environment hostile to civil society advocating reforms in trade policies that are deemed threatening to the full realization of its economic orthodoxy. And for the garment industry, the policy challenge is for civil society to link the issue of the workers with the bigger rubric of pushing further the democratization process that would uphold the workers’ rights. Another challenge for these industries is how to modify state policies that put them at a disadvantage if the government’s hands are already tied by agreements it has signed. Moreover, it is also necessary to prioritize the needs of the industries along with those of the consumers and to determine what would be best for the public good. Should the country, for example, continue importing vegetables to satisfy the consumers in exchange for the death of the Benguet vegetable industry? On the other hand, the hog raisers, despite being a powerful business lobby group, are prevented from exercising a complete monopoly because of competition from other powerful players like the meat processors and the corn and grain feeders. The state’s entry into agreements for liberalization has also basically tied its hands with regard to fully supporting the interests of the hog industry. In all of these, the question is, under what political conditions can civil society engage the state to address the impact of trade liberalization, which is a by-product of government’s submission to market forces? Again, solutions in the form of safety nets for the Benguet vegetable farmers and garment workers and more participation in decision making can be dismissed as an issue of governance. But this is not the case with a philosophy of development that diminishes the role the state can play in the economy. Furthermore, the diminished role of the state comes at a


People, Profit, and Politics

time where there persists a big gap between the rich and the poor. Thus, if ever stakeholders could participate in decision making, these would be the well-off, as can be seen in the telecommunications and hog industries. One witnesses, for example, the state’s inability to regulate the telcos because it has been captured by the elite.

Political Opportunity Structures at the Domestic Level
Factors facilitating the actions taken by civil society can be viewed within the internal and external dimensions of the political environment. Notably, state-civil society engagement is happening in a period of democratization, i.e., not under the repressive political environment of the Martial Law period, which was the context of state-civil society engagement during the pre-trade liberalization period of each of the industries, with the exception of the garment industry. The case studies show that civil society also made use of institutional openings to dialogue with the relevant government agencies. This has been made possible by the expanding space for democratic and consultative processes evident in post-EDSA governments.
Engaging the State Institutions

The general willingness of the post-Marcos Philippine state to engage civil-society actors in designing its policies and in implementing its programs—thus conferring on its actions a constant veneer of democratic legitimacy—has benefited civil society as it explicitly opened spaces for participation of non-state ators in regular politics. Such participation is facilitated by laws, such as the Republic Act (RA) 8435 or the Agriculture and Fisheries Modernization Act (AFMA) of 1997, which recognizes that civil-society actors will play a key role in its effort to modernize agriculture, and that the state would set the rules on such partnership. There were also institutionalized mechanisms such as those embodied in the Local Government Code, which also facilitated civil society engagement at the local level, particularly seen in the experience of the Benguet vegetable



industry stakeholders. Another is through the creation of agencies, which allows for participation of various sectors in the decision-making process as seen in the government-sponsored National Tripartite Conference that gathered representatives from major labor organizations, management, and government experts on the garment industry (Magadia 2003, 67-68). It is mainly through agencies like these that labor groups formally engage the executive branch. Civil-society engagement also focused on the established institutions of the bureaucracy, the legislature, and the judiciary. The garment industry, for example, engaged the bureaucrats when it held formal and direct dialogues with relevant government officials from the Garments and Textile Export Board (GTEB), the Department of Trade and Industry (DTI), and the Department of Labor and Employment (DOLE), among others. Issues the garment industry raised had to do with the case of displaced workers in factories that have closed; a comprehensive plan on how to save the garment industry; and preparing the workers for the MFA phaseout. Civil society in the garment industry also focused its efforts in reforming the Bureau of Customs. Corruption in the bureau has made it easier for smuggled garments to enter the country. Labor groups in the garment industry likewise engaged the judiciary through the filing of cases against employers. Political opportunity structures also presented themselves at the legislative and judicial levels. The Philippine Congress, for example, was used as a venue for articulating the grievances of the Benguet vegetable farmers, particularly through the party-list system, which has made possible the representation of the marginalized and underrepresented in the legislative process. In filing cases against their employers, labor groups in the garment industry made use of the judiciary. Mobilizing allies Equally important in engagement is the identification of key allies in government institutions. The Benguet vegetable industry, for example, found a major ally in then-Department of Agriculture (DA) Undersecretary Ernesto Ordoñez, who endorsed the actions of the vegetable traders,


People, Profit, and Politics

allowing them to penetrate the Bureau of Customs. In some cases, allies were also formed not on the basis of principle but because of certain individual’s self-serving interest. For example, former DTI Secretary and now-Senator Manuel “Mar” Roxas III, an advocate of consumer-oriented globalization and thus opposed to an increase in tariff rates, changed his position because the vegetable stakeholders played on his electoral ambitions to appeal for the protection of the vegetable industry. Roxas’s case is not unique as electoral politics provides an opportunity for policy advocacy in exchange for votes. In the telecommunications industry, Senator Roxas also emerged as a crucial ally. He supported the interests of ISPs when he filed a resolution in Congress calling for the Senate to remove all obstacles to the full commercialization and development of VoIP as a cheaper alternative to international calls. Such a situation reveals that although stable aspects of political opportunity structures are fixed and regarded as givens (Tarrow 1994), for example the strength of state institutions or the party system, there are precarious elements that shift with events and policies, and are essentially “matters of contention in which movements participate” (Gamson and Meyer 1996). This could be seen in the case of elections and the manner in which the Benguet vegetable industry framed its concerns whereby “these volatile features are conceived as processual rather than structural and entail perception or framing of such political opportunities by movement participants in order to influence mobilization” (Tarrow 1994; Gamson and Meyer 1996; McCarthy, Smith, and Zald 1996). Furthermore, in the case of engaging the state institutions, “importance is attributed to points of access and inclusion in policy making. It is said that mobilization is strongest when the political system is in the process of opening up to movement demands, rather than when access is completely closed or when the regime has fully met the movement’s demands” (Tarrow 1994). Local allies are found not only in the national bureaucracy but also in the local government. This was the experience of the Benguet vegetable farmers when civil society was able to mobilize the local government because



of its huge stake in vegetable farming. The farmers’ allies were the Benguet local government officials who were running during the elections, opening doors for civil society’s advocacy in the vegetable industry. Moreover, the farmers also mobilized nonstakeholders by making the issue part of the larger campaign against agricultural trade liberalization. As for powerful allies at the level of the local government, this was found in Benguet local officials such as Fongwan, Kim, Molintas, Sacla, and Uy. Some alliances were also formed because some of these local officials were formerly vegetable traders themselves and thus could commiserate with the plight of the Benguet vegetable industry players. They are referred to as “institutional activists,” being government officials formerly associated with civil-society advocacy groups.
Civil Society Engaging the Private Sector

The battle among the players in civil society was most evident in the telecommunications sector: the ISPs versus the telcos that found support from telephone companies such as Bell Telecoms with regard to the VoIP. There was also the involvement of big US telephone companies such as AT&T Corp., which urged the Philippine government to classify VoIP as a value-added service (VAS), i.e., not within the control of the telcos, which will ultimately liberalize the industry. Thus, deregulation of the industry would be good for the public as it would prevent foreign players to easily capture a portion of the market. Civil-society groups emerged, like the PISO, which is the voice of the small ISPs. In March 2005, the National Telecommunications Commission (NTC) classified VoIP as a VAS, thus breaking the monopoly of telcos as the sole provider of VoIP services. Thus, in the battle of these two profit-making enterprises, public good was served with the triumph of the ISPs. While liberalization, i.e., deregulation, frees the market for more players, there is still need for a strong regulatory body that would prevent a monopoly. While the telcos and consumers checked the government on the tax on text messaging, the consumers seemed to be powerless


People, Profit, and Politics

with regard to the government’s and telcos’ collusion on a franchise tax. The government and the ISPs, in turn, checked the telcos’ monopoly of the VoIP service. This highlights the issue of whether there should be a strong regulatory state in place before liberalization occurs. The more structural issue, however, is whether liberalization can work in a society characterized by a big gap between the rich and the poor.

Complementing Domestic Political Opportunity Structures with Resource Mobilization
The domestic political opportunity structures that civil society could take advantage of were also made possible by the resources at their disposal. One of the more important ones was their ability to form alliances with other like-minded players. In the case of the Benguet-vegetable civil society, for example, it tapped alliances at the national level, such as the Fair Trade Alliance (FTA), a middle-class movement; and the Kilusang Magbubukid ng Pilipinas (KMP) and the Alyansa Dagiti Pesante iti Taeng Kordilyera (Alliance of Peasants in the Cordillera Homeland [APIT TAKO]), which are part of the lower-class movement. It also forged alliances with political blocs, e.g., Akbayan and Bayan Muna, which carried their advocacy campaign. Notably, the KMP was an organization that emerged during the Martial Law period while the leadership of Akbayan and Bayan Muna consists of personalities who were active during the anti-dictatorship struggle. Thus, the Benguet civil society benefited from political movements established in the past as well as newly created ones like the FTA and the APIT-TAKO. A similar experience is also shared by civil-society campaigns in the garment industry wherein civil society formed alliances to determine a course of action upon the MFA’s expiration. Among these organizations are the BMP-Almagate (Bukluran ng Manggagawang Pilipino–Alyansa ng Manggagawa sa Garment at Textile), the Labor Forum Beyond MFA, and the GARTEX Labor Council (Garments, Textile, and Allied Industries Labor Council). The latter is spearheaded by the FTA and comprises



eighteen labor federations. Thus, the FTA is one network whose concerns cut across sectors, in this case, the concern of the vegetable and garment industries vis-à-vis liberalization. The hog industry could also rely on its strong organizational and business networks and its prior experience in building cooperatives. This is seen in its ability to lobby members of the legislative and executive branches of the government through formal dialogues, letter-writing campaigns, and attendance in hearings and sectoral consultations as well as in the use of the media to air their concerns. Its strength has been further reinforced with the formation of alliances such as the Agricultural Sector Alliance of the Philippines (ASAP) in 2001, which include feed millers’ and hog raisers’ associations and cooperatives. The civil-society network in the telecommunications industry involved mainly the players who had direct stakes in the industry and the consumers (who did not figure at all in the vegetable industry). The tax issue, specifically the so-called text tax, brought the players to a confrontation. The government along with some legislators framed the issue by arguing that the text tax will raise government revenue that can provide for more social services. Civil society, which did not agree, framed its argument by saying: 1) there is no need to tax, if the government spent public money correctly; 2) to impose taxes on text messaging is antipeople; and 3) government should just run after the big tax evaders. Civil society found allies in legislators, church groups, and overseas Filipino workers (OFWs), among others. The telcos also supported civil society on the issue, saying that the cost would merely be passed on to the subscribers. In the end, the president raised the VAT system on telecom providers from 10 percent to between 12 and 14 percent instead of the franchise tax, which could translate into higher cost of service. Thus, one had a case of the telcos and civil society coming together vis-à-vis the government. Networks and alliances in the telecommunications sector were also formed because of a common cause. The tax issue, for example, provided a political opportunity for civil society to continue to rally around concerns for more affordable and efficient cellular phone service. One of these groups


People, Profit, and Politics

was TxtPower, a loose organization of different progressive organizations. One of the issues they raised was the telcos’ reduction of the free-text allocations for prepaid subscribers without due consultation with the consumers. Others were the drop calls, i.e., calls charged to subscribers who did not make the calls. The group also questioned the limited period imposed by telcos for the use of prepaid load credits. Civil society remained vigilant vis-à-vis the government’s apparent penchant for creating new taxes and/or increasing current rates. Rallies and protest actions Protest actions also characterized the political environment. This was seen when the garment industries held rallies and demonstrations to express workers’ grievances in the workplace and the illegal closure of factories. It is equally important for the garment industry to target international institutions in its campaign to improve the industry as it engages the state. Such a strategy is not new as labor groups were particularly involved in several antigovernment mobilizations during the Marcos regime; wellknown among these mobilizations is the welgang bayan (people’s strike). In fact, after President Corazon Aquino’s ascension to power, one of her first acts was to address industrial labor relations in recognition of the labor movement’s contribution to the downfall of the dictatorship. Along with the workers’ utilization of the formal venues are the informal engagements that they launch occasionally (usually through rallies and pickets) to air their grievances. Protest actions, however, were not limited to holding rallies. In the hog industry, there was the “meat holiday,” i.e., the nondistribution of meat products to the public markets in protest of the rampant smuggling of meat products. This was led by the Agricultural Sector Alliance of the Philippines. The use of the media The media, for example, gave the Benguet vegetable industry crisis wide coverage. In a society where the media often set the agenda, it was



reasonable for the civil-society actors to count on the institution for forming and influencing public opinion. The garment, hog, and telecommunications industries also used the media to talk about their problems. Thus, the media’s openness to social movements, although these are often excluded in the standard operationalization of political opportunity, is in itself an important component of political opportunity structures, which has both structural and dynamic elements (Gamson and Mayer 1996). As seen in the case studies, the content of media coverage may radically influence the prospects for mobilization of challenging demands and movements, as it affects public awareness and perceived importance of a particular issue (McCombs and Shaw 1993). Mass media’s agenda-setting function, therefore, has progressed from the classical assertion that the news merely informs the public. The selection of objects for attention and frames for interpreting these objects shape the manner in which news is construed (McCombs and Shaw 1993). Other resources for mobilization Civil society in the telecommunications industry, coming from the upper and middle classes, also had the resources and the capacity to launch massive public education, organizing and mobilizing consumers, reinforcing media activities, and lobbying with sympathetic lawmakers and government officials. Public campaign through SMS, Internet, and the broadcast media was also used. Civil-society groups also visited colleges and schools, markets, churches, government offices, and communities to gather signatures for their petition against measures that they felt went against the public regarding telecommunications. The nature of their organization, i.e., the loose structure, enabled them to move effectively and forge interorganizational linkages to accommodate more resources in their campaign. Civil-society groups also forged alliances in Congress. Their effectiveness was seen when the text-tax issue died a natural death and civil-society groups, like TextPower, already had the capability to involve themselves in other tax issues and link up with others, like the anti-VAT groups. They framed these issues in relation to those affecting the telecommunications sector,


People, Profit, and Politics

such as the franchise tax, which will affect a broader range of telecommunication services. Such resources for civil society to engage government and the public were not seen in the Benguet vegetable industry whose constituency comes from the middle and lower classes. However, civil society’s knowledge of the issue was reflected in its strategy and policy proposals. Also favorable to the advocacy campaign of civil society was the division of labor among the federations of peasant political organizations, i.e., some focused on the defense of resources and land reform while others tackled the issue of vegetable importation. As for the garment industry, the ability of the workers to engage in formal (e.g., dialogue with government) and informal (e.g., pickets) strategies to gain government attention has much to do with their organizational skills and technical knowledge. Civil society’s advocacy work in the garment and the Benguet vegetable industries has gained government recognition as well as appreciation of their political and economic importance. An evidence of this is that the Benguet vegetable industry is represented in pertinent Philippine trade agreements with other countries. Moreover, grassroots organizing and advocacy have increased social awareness of the industry’s plight and have held government accountable to the community. This has also opened up opportunities for others to address similar concerns vis-à-vis government and society in general. Some refer to this as “state– social movement coalition,” whereby state actors use their resources to enhance the objectives of the social movement. This is very much in the mode of the liberal-relational approach in understanding state-civil society engagement. Such an alliance happens when the concerns of civil society adversely impact on the locality, which local and national government officials cannot ignore.

Political Opportunities at the External Level
Political opportunities at the external level were best seen in the formation of transnational alliances. For example, the garment industry



forged alliances at the global level, which differentiated it from the Benguet vegetable industry whose alliances were limited to the local level. This is because transnational actors could relate to the issue of human rights, which was raised vis-à-vis the garment workers in the context of globalization. The loss of livelihood for the vegetable farmers, on the other hand, did not generate much sympathy from transnational actors. There was also transnational civil-society support for the garment workers because they are better organized, unlike the small-vegetable farmers. This enabled the garment-industry groups to network with overseas organizations, which allowed them to learn from the campaigns taken by other groups and eventually apply these at home. These campaigns usually center on the corporations’ social responsibility, with specific focus on their responsibilities toward their workers. The Clean Clothes Campaign, for example, was formed to improve working conditions and empower workers in the global garment industry. Local chapters of international organizations were also established in the Philippines. Moreover, because of the international networking of trade unions in the Philippines, they can report to multinational companies the violations committed by local contractors. Civil-society groups are not the only ones making use of such campaigns. Governments, for example, have also used these to instill social responsibility among local manufacturers. Agreements forged through the efforts of international institutions have also been very useful in setting the directions of the country’s laws with regard to the protection of workers. For the garment industry, therefore, external political structures were utilized to protect the workers’ rights rather than stopping the flow of cheaper garment imports to the country. As for the telecommunications sector, an external political opportunity was for them to draw in the OFWs in their campaign to ban the text tax. The external environment in which the neoliberal ideology dominates as perpetuated by the international financial institutions, e.g., the World Bank and the IMF, has brought more positive rather than negative results. This brings out the fact that neoliberalism discourages too much state intervention even as it does not dissipate the state power to tax. The


People, Profit, and Politics

“Washington Consensus” even stipulated that a country should have a stable exchange rate and a balanced government budget. This can be accomplished through proper tax collection alongside less spending.

Factors Hindering the Action of Civil Society
Factors that hindered the action of civil society could be seen within the context of the limitations in the political opportunity structures both at the domestic and international levels, and with regard to the resources that could be utilized. In the Benguet vegetable industry, for example, there were key government officials who were not supportive of the vegetable farmers like then-DA Secretary Arthur Yap. Yap epitomizes government officials, particularly technocrats, who are shielded from political pressures in their pursuit of the neoliberal ideology because they carry no political ambitions. Although there may be a façade of openness to consultation as seen in the engagement of government agencies, the reality is that these institutions are insulated from popular pressures. Aggravating the situation at the national level, the perspective of the bureaucracy with respect to civil-society participation differs from one unit to another. A reason for this is that while it is easy to tap local government officials as allies, getting allies at the national government level is much more difficult because the agencies they are part of are more reflective of the interest of corporations. Thus the elite capture of the state, which neoliberalism does not address. There were also limitations in the hog industry, one of which was government’s sheer ineffectiveness. This was seen in the foot-and-mouth disease (FMD) incident in which the hog industry had to rely on government to control, e.g., through the importation of FMD vaccines, vigilant policing of hog and pork traffic, imposing quarantine measures, and massive information campaign on FMD, among others. Civil society criticized the government for corruption with regard to withholding money allotted for FMD. An important concern was the government’s refusal to act. Stakeholders in the hog industry, for example, linked the issue of meat imports with FMD—that is, to stop FMD was to stop the importation of meat, particularly carabeef, which had flooded the meat market. They also



pointed out that the smuggling and excessive importation of meat would ultimately lead to the collapse of the local hog industry. No decisive action, however, was taken by the government despite the fact that the ASAP held protest actions and declared a meat holiday, among others. They even demanded the resignation of government officials who they believed were involved in smuggling, but this was also to no avail. In the Benguet vegetable industry, the strategy of civil society to focus on the executive branch rather than the legislature also seems to have been flawed. For one, executive orders served only as temporary measures with very short-term impact. The executive can also issue a policy that may benefit the Benguet vegetable farmers but only to be negated by another policy. For example, the government is in partnership with the vegetable industry to stop smuggling but it will not accede to lowering the tariff rates on imported vegetables. The legislature also has its limitations as an arena for engagement. These include the very low awareness of policy makers of international trade; the high rate of absenteeism, which may indicate lack of interest or little knowledge of the issue; the long-winded process of legislation; and the parochial disposition of Congress as an institution. Changes in policy, therefore, are not based on principles but on realpolitik or quid pro quo. Furthermore, at the end of the day, the executive is tasked to implement the trade policies mandated by Congress. In the case of the telecommunications industry, the legislature generally played a supporting role either to the state (e.g., the NTC) or to the civilsociety players (i.e., the telcos, the ISPs, and the consumers). The telcos have more resources; they are able to translate these to political influence. The reality, therefore, is that the state must address the adverse effects of globalization, despite the fact that neoliberalism calls for the state’s diminished role. To reiterate what Mittelman (2002, 10) said, globalization as manifested by its major conveyors, the intergovernmental organizations (IGOs) like the WTO, tends to fragment the national political system and leaves winners and losers. Among the winners, as very well seen in the case studies, are the executive and the bureaucracy, which conduct negotiations and provide


People, Profit, and Politics

the representatives to IGO meetings; they therefore occupy pole position (Hague and Harrop 2004, 27). The losers, on the other hand, include the legislature and the political parties. The former may only learn of an international agreement after the government has signed it. The latter may have lost ground under the pressure from IGOs. This may explain why in the case studies, political parties do not seem to play a role at all in statecivil society engagement (Hague and Harrop 2004, 28). This is certainly most unfortunate for civil-society groups as the legislature and the political parties are the institutional vehicles of representation for the citizenry. Furthermore, despite the inroads, such as the institutionalization of NGOs’ and traders’ participation in the antismuggling operations of government agencies and task forces in the Benguet vegetable industry, the government response has been minimal. In this context, state accession to civil-society demands is seen as a mere rhetoric or a means to legitimize state policies, e.g., the antismuggling program. In this light, changes in political opportunity structures as brought about by the democratization process are only capable of facilitating civil society’s entry into the policymaking arena and its advocacy of modest policy reforms. The long-term but still-elusive solution, therefore, is for civil society to craft a feasible alternative economic paradigm that serves as the foundation for its policy advocacy on agriculture in general and the vegetable industry in particular. This would also prevent the government from treating the concerns of the vegetable industry as issue-specific rather than comprehensively. Therefore, the adverse effects of globalization cannot be fully confronted as long as there are impediments in the democratization process. These impediments, on the other hand, cannot be addressed when socioeconomic inequalities pervade in society, a reality which neoliberalism has failed to address. Limitations in the political opportunity structures at the international level At the international level, the major stumbling block was the state’s submission to external forces, i.e., market forces, over which it had no



control. Nevertheless, civil society in the Benguet vegetable industry sought to remedy this by engaging the state. As for the hog industry, the government could not stop the importation of meats because it had already signed agreements that opened up the country for liberalization. Importation has had different impacts on the various sectors directly or indirectly linked with the hog industry. For example, it led to the loss of profits for the hog industry unless the government reduced production costs by lowering tariff on corn and soybeans, primary components of hog feeds. This meant that pursuing the interest of hog industry players would go against civil-society advocates of the producers of these commodities, such as the corn farmers. This was also seen in the case of the call to stop the importation of carabeef from India, which benefited the hog industry but not the meat processors who were benefiting from carabeef imports. Thus, although the government has attempted to address the interests of the different affected sectors, it has failed to come up with a win-win solution. Only the garment industry workers could take advantage of linking up with transnational movements fighting for a similar cause. Unlike the vegetable and hog industries, these movements are more focused on workers’ rights rather than livelihood issues. Limitations in resources for engagement One of the factors that went against the Benguet vegetable industry was the lack of organization among the farmers, which kept them from any meaningful participation. The highly technical nature of discussions during public hearings and consultations also alienated groups that were not conversant with the different aspects of tariff policy. This was aggravated by the lack of pertinent information and data, thus making it difficult to establish the validity of the case through hard facts and, in the process, undermining civil society’s credibility vis-à-vis the policy makers. In the formal approach to state engagement, there was also the issue of misrepresentation. Traders, for example, misrepresented themselves as farmers and their approach, i.e., of carrying out the antismuggling drive,


People, Profit, and Politics

was not approved of by other civil-society groups that believed this to be the task of the government. There was also resistance among vegetable farmers to political organizing for fear of being manipulated to advance a particular dogma. Misrepresentation also benefited the traders, creating a gap between them and the farmers. Furthermore, the Benguet vegetable industry, unlike the hog industry, could not take advantage of RA 5435 whereby the state recognizes state and civil-society partnership in development. For the telecommunications industry, it was very clear what organizations the civil-society members belonged to, i.e., whether they were with the telcos, the ISPs, or the consumer groups. The same could be said for the civil-society players in the hog and garment industries. As for the labor movement in the garment industry, questions that arise include why the labor movement, one of the oldest movements in the Philippines, is unable to assert itself with regard to the workers’ condition in a period of democracy. One view is that the labor movement has not been sector-specific, i.e., attention has not been given to the nuances of each of the sectoral needs of the workers. Also, subcontracting has made it difficult for workers to organize since they are diffused.

These studies have shown globalization’s different effects within and across domestic industries as well as the multiple strategies of engagement between civil society and the state. The impact on the stakeholders in the Benguet vegetable, garment, and hog industries has been negative. The impact was most severe in the case of the Benguet vegetable industry, which barely survived despite its pre-trade liberalization monopoly of the industry. The garment industry, despite being among the top export earners, shows that globalization in a time of democracy has brought about profit losses translating into the closure of several factories and the layoff of hundreds of workers. The expiration of the MFA will only make matters worse. Globalization has brought in cheaper meat, but this hardly threatens the hog industry.



For the telecommunications sectors, however, globalization has been positive as the entry of more players encouraged greater competition. In all these, the consumers are the ones who supposedly benefit the most as globalization provides them with cheaper products. However, this comes at the expense of the industries that clearly cannot compete. There is therefore a need for reforms that could be implemented vis-à-vis developmental outcomes arising from economic liberalization in specific sectors. Prioritization as well as safety nets are most urgent if communities are to survive the adverse impact of globalization. In other words, globalization should not be adopted wholesale but on a case-to-case basis, with preference for the more marginalized sectors. Another important lesson from these case studies is that the state cannot afford to treat the adverse impact of globalization on a piecemeal basis, i.e., being issue-specific. Civil society, on the other hand, also has to do its homework to provide a feasible alternative with regard to their specific sectoral concern vis-à-vis what unbridled neoliberalism has to offer. More important, there is a need to come together to put these concerns within the bigger framework of development. The upside is that the situation provides political opportunities for civil society to engage the state at both the local and national levels. This can be best attributed to the current democratic dispensation, which, despite its shortcomings, has provided the space for state-civil society engagement. Such an engagement is best seen in the context of the liberal-relational approach that views civil society as not just any nonstate and nonmarket actor or that civil society is in opposition to the state (Hearn 2001, 342). What emerges is a civil society construed “as part of what links the state to society more broadly, and as providing the channels through which people influence their states, and states cultivate legitimacy” (Hearn 2001, 340). This interaction “reinforces democracy by encouraging and entrenching the pursuit of sectional interest through generally agreed norms” (Friedman 2003, 10). Such a situation was best exemplified in civil-society engagement of the local government unit and the local government officials as well as


People, Profit, and Politics

their engagement of the state at the national level, i.e., engaging the executive and its bureaucracy, the legislature, and the judiciary. The nature of engagement is formal and direct, e.g., through committees on tariff involving NGOs, as well as informal and direct, e.g., lobbying government officials. Political opportunities are also present for civil society to engage the state in an informal and indirect manner, e.g., the use of the media as well as demonstrations. The state is not monolithic. While industry players may tap key allies in government, there will always be state functionaries who are insulated from the pressure to provide for safety nets to industries, as in the case of the Benguet vegetable and garment industries. The allies may come from local government officials whose communities are at risk because of globalization, or allies who are ideologically against globalization killing off industries, or those who see that supporting the antiglobalization movement would mean electoral votes. These combinations were, for example, seen in the Benguet vegetable industry, where “rifts among elites could provide movements occasions to influence policy making” and “the presence or absence of influential allies, such as the elite, could also have direct impact on the movement’s actions.” This is mainly because “elite allies possess resources and political influence that movements lack and could serve as indirect channels of access in the system” (Tarrow 1994) as was seen in the case studies. The study also reveals that the industries that have more resources, e.g., the hog and telecommunications industries, are in a better position to engage the state because of the profits they bring to the economy. This is where the state has to come in to provide the balance by, for example, leveling the playing field. One consolation, though, for the marginal players is that the competition between big industry players who are in conflict with one another has provided a check and balance as seen in the hog and telecommunications industries. Ironically, the check and balance does not come from the state because of its patrimonial character, i.e., dispenser of patronage politics, which can be attributed to the elite capture of the state. In all these experiences, one witnesses not the retreat of the state but the



state as a major actor of contention for the different civil-society players affected by globalization. Nevertheless, the state is still the major arena of contention to confront the adverse effects of liberalization. But despite the importance of the state, it also has its limitations, as seen in its helplessness in the face of the FMD outbreak. Executive orders as well as the competence of legislators also have their limitations. Furthermore, as the case studies also reveal, the hands of the state to go against the tide of liberalization are tied, particularly in situations where it had already signed agreements to open up the country’s economy. One, therefore, has to acknowledge the presence of “exogenous factors that enhance or inhibit prospects for mobilization, for particular sorts of claims to be advanced rather than others, for particular strategies of influence to be exercised, and for movements to affect mainstream institutional politics and policy” (Meyer and Minkoff 2004, 1457-58). And as for situations in which globalization brings about a positive effect as seen in the telecommunications industry, the reality is that state regulation alone cannot provide the necessary countervailing force against market power. What is needed, therefore, is a fair distribution of market power parallel to the creation of an environment that discourages monopolistic behavior. This can only be attained once socioeconomic inequalities are addressed, which will lead to the empowering of the majority. Where does that leave civil-society players? As earlier noted in the garment industry, much is to be gained from exploring political opportunity structures at the international level, and this may also be true for the other sectors, which can learn from the experiences of others that have suffered or will suffer the same fate. Transnational activism is on the rise and as such, some issues, e.g., workers rights, have been mainstreamed into international policy making. There is also still much to be desired in empowering the stakeholders not only in terms of the need to organize but also in terms of the resources available. The anchor of all of these is the push for further democratization, i.e., the enlargement of the space that would allow not only state-civil society


People, Profit, and Politics

engagement but also state-civil society cooperation vis-à-vis the onslaught of globalization. Such engagement and cooperation have to take into consideration the similarities and differences in the impact of globalization on the various sectors. The success of civil society in engaging the state has much to do with taking advantage of the political opportunities and in mobilizing available resources in advocating what they perceive to be the best for the public good. Thus, much of the role of civil society is to monitor the changes in political opportunity structures and to determine which among the various situations encourage or discourage their advocacy and, most of all, discern when or how struggles could lead to actual reforms (Tarrow 1994). As can be gleaned from the case studies, their success may mean incremental gains not only for their specific sectors but for the advancement of the country’s development and democratization process. The long-term objective of all of these is to come out with an alternative philosophy of development that does not separate the economic from the political as what neoliberalism does. The challenge is to come up with a philosophy of development that will not only be concerned with bringing about a “trickle-down effect” of the fruits of development but will immediately pour in the much-needed economic benefits to the majority of the population. That is, it will have a bias for the poor. This will come about only when one can be assured that elite capture of the state will be eliminated and that economic policies will be determined democratically with the participation of all those concerned. All of these will be made possible not by the state and the advocates of globalization but by a vigilant civil society, i.e., those who are marginalized by neoliberalism, who against all odds have not lost hope to bring about a just situation in which winners should always be those who have less. Because of the positive experience in the telecommunications industry, can all these therefore be attained through “globalization with a human face,” i.e., “tackling the abuses of an unregulated capitalism without the need to alter its fundamentals” (Amin 2004, 221), or is



this merely a transition phase to a move for “de-globalization,” if the experiences of the vegetable, hog, and garment industries are uncontrollably replicated in the rest of the country’s industries? There seems to be some ambivalence on the part of civil-society players in these three industries, and for as long as such a situation prevails, the state will be the final arbiter between civil society and the forces of globalization. Such uncertainty also impacts on state-civil society engagement, e.g., whether there should be more state regulation or not. But what remains certain is, despite the ambivalence, mere palliatives will not be acceptable, and engagement will be pursued for as long as the adverse impact of globalization is felt, until there are no longer excuses.

1. Trade liberalization in the Philippines is defined as “lowering tariffs and lifting quantitative restrictions on hundreds of goods (notably, not rice); removing capital controls to allow capital to flow unimpeded in and out of the country; and opening previously restricted sectors and industries to foreign ownership” (Abinales and Amoroso 2005, 245).

Abinales, Patricio N., and Donna J. Amoroso. 2005. State and society in the Philippines. Pasig City: Anvil Publishing Inc. Amin, Ash. 2004. Regulating economic globalization. Transactions of the Institute of British Geography 29:217-233. Budd, Eric. 2005. Wither the patrimonial state in the age of globalization? Kasarinlan: Philippine Journal of Third World Studies 20 (2): 37-55. Directory of Consumer Organizations. Friedman, Steven. 2003. The state, civil society and social policy: Setting a research agenda. Politikon 30 (1): 3-25. Gamson, William A., and David S. Meyer. 1996. Framing political opportunity. In Comparative perspectives on social movements: Political opportunities, mobilizing structures, and cultural framings, ed. Doug McAdam, John D. McCarthy, and Mayer N. Zald, 275-90. Cambridge: Cambridge University Press.


People, Profit, and Politics

Habito, Cielito F. 2002. Impact of international market forces, trade policies, and sectoral liberalization policies on the Philippines hogs and poultry sector. Hague, Rod, and Martin Harrop. 2004. Comparative Government and Politics: An Introduction. 6th ed. New York: Palgrave. Hearn, Jonathan. 2001. Taking liberties: Contesting visions of the civil society project. Critique of Anthropology 21 (4): 339-60. Jomo K.S. 2006. Worlds apart. BusinessWorld, February 22. Magadia, Jose. 2003. State–society dynamics: Policy-making in a restored democracy. Quezon City: Ateneo de Manila University Press. McCarthy, John D., Jackie Smith, and Mayer N. Zald. 1996. Accessing public, media, electoral and governmental agendas. In Comparative perspectives on social movements: Political opportunities, mobilizing structures, and cultural framings, ed. Doug McAdam, John D. McCarthy, and Mayer N. Zald, 291311. Cambridge: Cambridge University Press. McCombs, Maxwell E., and Donald C. Shaw. 1993. The revolution of agendasetting research: Twenty-five years in the marketplace of ideas. Journal of Communication 43 (2): 58-67. Meyer, David S., and Debra C. Minkoff. 2004. Conceptualizing political opportunity. Social Forces 82 (4): 1457-92. Miller, D. 1991. Politics. In Blackwell Encyclopedia of Political Thought, ed. V. Bogdanor, 390-1. Oxford and Cambridge, Massachusetts: Blackwell. In Rod Hague and Martin Harrop, Comparative government and politics: An introduction. New York: Palgrave. Mittelman, James H. 2002. Making globalization work for the have-nots. International Journal on World Peace 19 (2): 3-25. Tarrow, Sidney. 1994. Power in movement: Social movements, collective action, and politics. Cambridge: Cambridge University Press.

A ABS-CBN, 185 Adiong, Blo Umpar, 41, 55 Adviento, Annie, 133 Advocates of Science and Technology for the People, 176-77, 180 AFTA-Common Effective Preferential Tariff, 56, 84-86 Agreement on Agriculture, 28, 31 Agricultural Competitiveness Enhancement Fund, 32, 46 Agricultural Sector Alliance of the Philippines, 94, 102, 105, 21314 Agricultural Tarrification Act of 1995, also RA 8178, 28, 38 agriculture, 31, 86-87 Benguet, 1, 20-24, 31, 37-38, 40, 44-46, 51, 56, 200, 209 farmers, 22, 39, 42, 209 Agriculture and Fisheries Modernization Act of 1997, also RA 8435, 39, 92-93, 208 Akbayan, 40, 212 Aklan, 105 Alliance of Legislators against Regressive Taxes, 178 Alliance of Progressive Labor, 136 Alyansa Agrikultura, 40 Alyansa Dagiti Pesante iti Taeng Kordilyera, 27, 37-38, 212 Alyansa ng mga Manggagawa sa Garment at Textile (ALMAGATE), 136 Amnesty International, 8

Angara, Edgardo, 101-2 Anti-Dumping Act of 1999, also RA 8752, 31, 127 Anti-Smuggling Bill, 55 Anti-Smuggling Intelligence and Investigation Center, 43 Anti-Sweatshops Project, 122 Aquino administration, 29, 94, 125, 163-64, 169, 202, 214 Arroyo administration, 29, 52, 58, 1034, 125, 161, 169-70, 177-79, 188 Arroyo, Mike, 103 Association of Southeast Asian Nations (ASEAN), 26, 74, 85, 112 ASEAN Free Trade Area (AFTA), 19, 74, 85-86, 119, 155 Asian Development Bank, 2 Asian financial crisis, 6 Asia-Pacific Economic Cooperation, 155 Asis, Rey, 177 Associated Labor Unions of the Trade Union Congress of the Philippines, 136 Atienza, Victor, 98 B Bad-ayan Buguias Development Multipurpose Cooperative, 44 Bagong Alyansang Makabayan, 177 Bagsakan Traders Association, 43 bargaining, 1, 75 Basic Telephone Program, 165 Bataan, 98 Batangas, 97, 105, 116


People, Profit, and Politics

Bayan Muna, 35, 40, 126, 178, 212 BayanTel, 165-66, 172, 184 Bell Telecoms, 211 Benguet, see agriculture Benguet Cold Chain Project, 41, 56 Benguet Farmers’ Federation Inc., 37, 45 Benguet Vegetable Commission, 37 Benguet Vegetable Council, 37, 53 Benguet Vegetable Distributors’ Cooperative, 36, 42 Bilateral Textile Agreement, 117 bonded warehouses, 103 Briones, Nicanor, 102 Bukluran ng Manggagawang PilipinoALMAGATE, 125, 131, 134, 212 Bulacan, 97, 102, 105, 116 Bureau of Agricultural Statistics, 76, 100 Bureau of Animal Industry, 98, 100, 103 Bureau of Customs, 27, 42-43, 48, 53, 103, 106, 126, 137, 140, 142, 209 Bureau of Labor and Employment Statistics, 121 Bureau of Plant Industry, 27, 40-42 Bureau of Telecommunications, 162 C Cabinet Oversight Committee on AntiSmuggling, 43 Calimlim, Carlito, 100 call center industry, 181 Capiz, 105 carabeef, 100-103, 105, 221 Casiño, Teodoro, 178 Cavite, 116 cellular and mobile telecommunication services, 160, 165, 202 cellular mobile telephone system providers, 164 Central Luzon, 76 Chikka Asia Inc., 170 China, 26, 56, 112, 121-22 Cinco, Emil, 176

Citizens’ Alliance for Consumer Protection, 199 civil society, 1-3, 9-11, 20-21, 33-34, 39-59, 73-74, 82, 91-94, 100, 103, 105-6, 108, 123, 137-38, 156, 167, 172, 175-76, 186, 198, 202, 208, 211, 213, 215-16 class bias, 203-4 Clean Clothes Campaign, 122, 203, 217 Clothing and Textile Industry Tripartite Council, 135, 141 Co, Nemesio, 101-2 Coalition for Consumer Protection and Welfare, 199 Cojuangco, Antonio “Tony Boy”, 164 College Editors Guild of the Philippines, 177 Commission on Information and Communication Technology, 161, 170, 175, 188 Communist Party of the Philippines, 201 Computer Professionals Union, 177, 180, 187 computerization, 127 Concepcion, Trixie, 177 Concio, Joseph, 181 confrontation, 186 Congress, 28, 31, 38, 41, 48, 53, 102-3, 164, 169, 171, 187, 209, 215, 219 Congressional Oversight Committee on Agriculture and Fisheries Modernization, 46 Connectivity Unlimited Resources Inc., 165 Consumer Union of the Philippines, 199 Consumers Federated Groups of the Philippines Inc., 199 contractualization, 119-20 Convention on the Rights of the Child, 123 Convergence Solutions, 182 cooperatives, 38



Cordillera, 52 Cordillera Administrative Region, 21, 37, 97 Cordillera Peoples Alliance, 27 Countervailing Act of 1999, also RA 8751, 31 D democratization, 207-8, 220 Department of Agriculture, 22, 37, 40, 43, 47-48, 53, 83, 95, 96 Department of Labor and Employment, 120-21, 129, 131, 133, 139, 209 Department of Trade and Industry, 37, 43-44, 49, 53, 131, 133, 139, 209 Department of Transportation and Communications, 160-62, 166, 170, 188 deregulation, 158, 179, 213 developing countries, 115 development, 28 dialogue, 1, 75, 93, 176, 212 Digital Telecommunications Philippines, Inc., 158, 160, 16566, 184 Disini, J.J., 183 division of labor, 115 domestic market, 142 Domingo, Jed, 172 Drilon, Cesar, 103 Drilon, Franklin, 178 E Early Bird Traders Association, 43 Early Harvest Program, 56 Earth Island Institute, 177 Eastern Telecoms, 158, 185 electronics, 117 elite, 224 political, 51 Escudero, Francis, 178 Estrada administration, 29, 101, 172, 176 e-Telecenters , 166

Evoserve, 182 Executive Order 197, 45 Executive Order 241, 29 Executive Order 246, 29 Executive Order 269, 16 Executive Order 470, 94 export processing zones, 115 Express Telecommunications Co., 158, 160, 165, 184 F Fair Trade Alliance, 40, 43, 118, 134, 142, 212 farm-to-market roads, 22 fast-food chains, 101 Federation of Free Workers, 136 feed millers, 81, 94, 213 flexibilization, 143 Fongwan, Nestor, 50, 210 foot-and-mouth disease, 73, 96-100, 218 foreign debt, 33 foreign direct investments, 5, 111, 158 Foundation for Media Alternatives, 175 free trade, 27 free-market economy, 5, 9 free-trade zones, 115 G Gabriela, 126, 177 Galang, Loretta, 99 garment industry, 1, 112-13, 116-17, 128, 133-34, 142-43, 197, 201, 207, 209 Garment and Textile Export Board, 123, 130,133, 138-40, 209 Garment and Textile Industry Tripartite Consultative Body, 131 Garment and Textile Industry Tripartite Council, 131 Garment and Textile Labor Council of the Philippines, 127 Garment, Textile and Allied Industries Labor Council, 125, 134, 212


People, Profit, and Politics

General Agreement on Tariffs and Trade-Uruguay Round, 19, 28, 34, 37, 39, 46, 56, 87 Gintong Ani for the High-Value Commercial Crops, 22 Giugni, Marco, 8 global satellite systems, 156 Global System for Mobile Communications, 160 globalization, 1, 5-10, 12, 43, 59, 7475, 81-82, 91, 94, 106-7, 117, 126, 142-43, 167, 197, 203, 205, 209, 216, 223, 220 Globe Telecoms Inc., 158, 160, 165-66, 172, 176 governance, 205 graft and corruption, 28, 126, 211, 216 gross domestic product, 158 H Habito, Cielito, 3, 87-88 High Value Crops Development Act of 1995, also RA 7900, 22 hog industry, 1, 9, 73-76, 79, 81-82, 93, 96-97, 99, 103, 107, 197, 200, 212, 221 hog raisers, 74, 91, 94, 97, 105, 207 House of Representatives, 188 House Resolution 834, 45 House Resolution 879, 45 House Resolution 894, 45 House Special Committee on Globalization, 46 human resource management, 120 hybrid seeds, 22 I Iloilo, 105 Iloilo Hog Farmers Multi-Purpose Cooperative, 93 Imperium Technologies, 182 importation, 20, 27-28, 41, 45, 74, 75, 96, 100-104, 197 garments, 112-18 pork, 84, 197 vegetables, 23, 24, 36

Indigenous Peoples Rights Act, 39 Industrial, Scientific and Medical frequencies, 183 industrialization, 197 InfoBahn, 182 Infocom Technologies, 155, 170, 182 Information Technology and Electronic Commerce Council, 181 Innove Communications Inc., 158, 184 Institute of Labor Studies, 120 interconnection, 157, 162, 165, 167, 169 intergovernmental organizations, 4, 220 international financial institutions, 205, 217 international gateway facilities, 164-65 International Labor Organization, 123 International Mobile Equipment Identifiers, 168 International Monetary Fund, 7, 33, 119, 217 International Telecommunications Union, 155, 183 International Textile, Garment and Leather Workers’ Federation, 123, 133, 139, 141 internationalization, 115 Internet, 170-72, 180-81, 215 Internet service providers, 181-82, 185, 188, 206, 210, 219 Isla Communications Inc., 158, 160, 165 K Kababaihan Laban sa Kontraktwalisasyon, 126 Kilusan para sa Pambansang Demokrasya, 35 Kilusang Magbubukid ng Pilipinas, 40, 212 Kim, John, 38, 42, 50, 210 Kintanar, Simeon, 182 L



La Trinidad, 38 La Trinidad Anti-Smuggling Task Force, 36 La Trinidad Booth Holders Association, 43 La Trinidad Trading Post Association, 36, 42-43 La Trinidad Vegetable Supreme Council, 43 labor flexibilization, 120 Labor Forum Beyond MFA 125, 13134, 141, 212 labor groups, 138, 140 relations, 124 sector, 136 unions, 201 Lacson, Panfilo, 51 Laguna, 97 landlines, 167 Lee Kuan Yew, 157 letter-writing campaigns, 93, 212 liberalization, 6, 9-10, 155-58, 162, 179, 201, 211-12 Lim, Albert Jr., 100-102 Limcoma Multipurpose Cooperative, 93, 102 livestock, 79 Livestock Association of Pandi, 102 Livestock Development Council, 83 local government, 36, 39-40, 51, 56, 59, 98 Local Government Code, 208 Lorenzo, Luis, 41, 103-4 M Magsaysay, Ramon Jr., 46, 102 MailStation, 182 Malacañang, 104, 179, 188 Marañon, Alfredo, 102 Marcos administration, 29, 91, 163-64, 169, 175 Margins of Preference, 87 Martial Law, 21, 163, 201-2, 208 Martinez, Clavel, 182 Marxist-relational approach, 11

meat, 79, 83 canned, 75 imports, 88, 100 poultry, 95 processed, 75 products, 96 Meat and Hog Dealers Association of the Philippines, 94, 104-5 meat holiday, 94, 102, 104, 214 media, 134, 214 mass media, 180, 215 media advocacy, 54 Medium-Term Philippine Development Plan, 29, 169, 186, 188 Mercado, Emil, 177 Migrante, 177 Millicom, 158 Mindgate Systems , 182 minimum access volume, 32, 88, 9496, 108, 203 minimum wage, 143 Ministry Circular 82-046, 163 mobile phone roaming, 156 mobile phone service centers, 168 Molintas, Raul, 36, 50-51, 210 Montemayor, Leonardo, 40-41, 50 Mosaic Communications, 181-82 most favored nation, 28 Mountain Province, 24, 38, 44, 97 Multi-Fiber Arrangement, 112-13, 117, 122, 125, 130, 137-38, 140, 209 Multimedia Messaging System, 178 multinational corporations, 6, 123 Municipal Telephone Act of 1989, 164 Municipal Telephone Projects Office, 164 MyDSL, 183 N National Anti-Smuggling Task Force, 43 National Commission on the Role of Filipino Women, 125 National Conciliation and Mediation Board, 129


People, Profit, and Politics

National Confederation of Labor, 136 National Economic and Development Agency, 48, 161 national elections, 44 National Federation of Hog Farmers Inc., 93, 95, 100, 104-5 National Federation of Hog Raisers, 93, 101 National Hog Raisers Group Inc., 99 National Labor Relations Commission, 125, 129 National Meat Inspection Commission, 97 National Statistics Office, 23 National Telecommunications Commission, 156, 161-62, 16871, 182-88, 211 National Telecommunications Development Committee, 164 National Telecommunications Development Plan, 164, 170 National Tripartite Conference, 125, 208 National Union of Students of the Philippines, 177 National Vegetable Summit, 37 National Wages and Productivity Commission, 125 nationalism, 128 Nationwide Association of Consumers Inc., 199 Navea, Chodie, 131 negotiation, 1, 75 Negros Occidental Hog Raisers Association, 100 neoliberalism, 5, 28, 32-33, 39, 54, 204-5 Neri, Romulo, 186 Nippon Telegraph and Telephone Corp., 158 “no union, no strike” policy, 143 nongovernment organizations, 7, 34, 40, 75, 82, 198 Novelty Philippines, 131

Nynex, 158 O Office International des Epizooties, 100 Olea, Len, 177 Ordoñez, Ernesto, 41-42, 50, 209 overseas Filipino workers, 177, 213, 217 Overseas Filipino Workers’ Laban sa TextTax, 177 Overseas Workers Welfare Administration, 125 P Pabi-GATT, 34 Pag-IBIG, 129, 144 paging, 164 Palatino, Raymond, 176 Pambansang Ugnayan ng Mamamayan Laban sa Liberalisasyon ng Agrikultura, 38 party-list system, 125 patronage politics, 204, 225 people’s organizations, 188 permit to import, 40 Philcom, 158, 184 Philippine Association of Broiler Integrators, 95 Philippine Association of Hog Raisers Inc., 93, 102 Philippine Association of Meat Processors, 105 Philippine Association of Private Telephone Companies, 163, 184 Philippine Cable Television Association, 185 Philippine Chamber of Telecommunication Operators, 184 Philippine Constitution, 28, 91-92 Philippine Economic Zone Authority, 129 Philippine Electronics and Telecommunications Federation, 185 Philippine Internet Services



Organization, 156, 176, 211 Philippine League for Democratic Telecommunication, 172-74 Philippine Left, 126 Philippine Long Distance Telephone Company, 156-66, 172, 201-2 Philippine Network Foundation, 182 Philippine Peasant Institute, 34, 40 Philippine Transport and General Workers Association, 136 Philippine VoIP Act of 2005, 182 Philippines, 3, 7, 19, 23, 28-29, 56, 85, 87-88, 114, 116-17, 120, 124, 128, economy, 7, 10 government, 29, 33, 47-48, 57, 96 “Philippines 2000”, 165 Philippines Online, 182 pickets, 139 Pilipino Telephone Company, 160, 165-66, 184 Plant Quarantine Law, 27 political opportunity structure, 12, 212, 214, 220 pork, 81, 95-96, 197 consumption, 79, 82, 99 Presidential Commission on Good Government, 164 privatization, 5, 179 public opinion, 218 Public Telecommunication Entities, 171, 181 Public Telecommunications Act of the Philippines, also RA 7925, 167, 171-72 Q quantitative restrictions, 19, 27-28 Quezon, 97 Quick Response Teams, 131, 136 R rallies, 139 Ramos administration, 29, 33, 49, 98, 165, 167, 172, 200 ready-to-wear, 116 Regional Wage and Productivity

Boards, 125 Remulla, Gilbert, 174 Republic Telephone Co., 163 Reyes, Edgardo, 184 rice, 21, 199 Riverdale Biological Laboratories, 98 root crops, 44 Rosales, Loretta, 45, 50 Roxas, Manuel “Mar”, III 43, 181, 209 S Sacla, Wasing, 38, 50, 210 Safeguard Measures Act of 2000, also RA 8800, 31 “Salad Bowl of the Philippines”, 21 San Miguel Corporation, 185 Santiago, Joseph, 179 Sarmiento, Jorge, 186 sectoral consultations, 93 Securities and Exchange Commission, 102 Senate, 95, 188, 210 Senate Resolution 258, 45 Senate Resolution 464, 45 Service Area Scheme, 165-66 service providers, 169 Shinawatra, 158 short message service, also “texting” or text messaging, 160, 171, 178, 188, 202, 215 Singapore Telecoms, 158 Singson, Eric, 178 Slaughterhouse Operators Association of the Philippines, 94, 104-5 Smart Communications, 158, 160, 165-66, 172, 176, 184 smuggling, 26-27, 32, 36, 41-45, 55, 58, 74, 83-84, 96, 100-103, 137, 142, 197, 205 Social Accountability International, 123 Social Action Center, 38-39 social relations, 36


People, Profit, and Politics

Social Security System, 129, 137, 140 Solidarity of Labor for Rights and Welfare, 126 Solis, Ronald, 185, 188 Sony-Ericsson, 160 Soriano, Teresa, 120 Soro-Soro Ibaba Development Cooperative, 93 South Korea, 117 Southern Luzon, 76 state, 13, 50, 58, 75, 92-93, 186, 198, 200 engagement, 9 institutions, 208-9 regulation, 167, 206 state-civil society relations, 1, 1011, 20, 24, 55, 73, 75, 91, 106, 124, 156, 168, 188, 197, 220 State of the Nation Address, 177 Stop the New Round CoalitionPhilippines, 35, 43 Suarez, Danilo, 178 sugar, 95, 199 Supreme Court, 162, 165 Swine Information Network, 79, 83 T Taiwan, 117 Tañada, Wigberto, 40, 50 Tapang, Giovanni, 176 tariff, 27-28, 31, 44, 84 rates, 38, 43-45, 84, 209 reduction, 26, 29, 51, 86, 118, 203 reforms, 94 Tariff and Customs Code, 55, 84 Tariff Commission, 41, 44, 46, 49, 53, 119, 127 Tariff Reform Program, 29 Tariff-Related Matters, 44, 49 Tarlac, 102 Task Force Blue Collar, 42 technical cooperation, 188

Technical Education and Skills Development Authority, 128, 140 telcos, 156, 164, 171-72, 178-79, 18182, 184-85, 206, 211, 219 Telecommunication Users Group of the Philippines, 184 telecommunications industry, 1, 10, 155-57, 198, 215, 223 Telecommunications Office, 161-62 “Telepono sa Barangay”, 164 textile industry, 128, 134, 203 see garment third-generation (3G) services, 156, 165 Torres, William, 181 trade liberalization, 5, 19-20, 26, 31, 33-35, 44-45, 52, 55, 91, 118, 197-200, 207 traders, 40-43, 56, 220, 221 transnational corporations, 115, 143 TxtPower, 156, 176-80, 186-87, 213 U ukay-ukay, 113 United Nations Development Programme (UNDP), 2 UNDP Bureau for Resources and Strategic Partnership, 2 United Nations Food and Agricultural Organization, 73, 76 United Nations Universal Declaration of Human Rights, 123 United States, 95, 114, 117 United States Agency for International Development, 7 United Swine Producers Association, 100 urbanization, 79 Uy, Gabby, 102 Uy, Johnny, 36 V value-added service, 170, 184-86, 211



value-added tax, 213 vegetable industry, 1, 19-22, 26- 28, 31-32, 34, 37, 40- 42, 44-45, 4950, 55-56, 197-200, 205, 207, 215 Vicariate of Baguio-Benguet, 38 Virtual Asia, 182 Voice over Internet Protocol, 170, 176, 181-88, 206, 210 W “Washington Consensus”, 217 welgang bayan, 124, 214 Wi-Fi/Max, 170, 173, 183 women, 204 World Bank, 2, 7, 29, 33, 116, 200, 217 World Summit on the Information Society, 175 World Trade Organization, 6-7, 26-29, 31, 33, 43, 46, 84, 87, 95, 112,

117, 119, 123, 127, 155, 169, 200, 203 Worldwide Responsible Apparel Production, 123 Y Yap, Arthur, 41, 218 Yu, Jayson, 183

About the Authors
Glenda Lopez Ma. Glenda S. Lopez Wui is assistant professor at the Faculty of Education, University of the Philippines Open University, and formerly university researcher and deputy director of the UP Third World Studies Center. Teresa S. Encarnacion Tadem is associate professor at the Department of eresa Encarnacion Political Science, University of the Philippines Diliman, and director of the UP Third World Studies Center. haron Quinsaat Sharon M. Quinsaat is university researcher at the UP Third World Studies Center. F. Jr. Joel F. Ariate Jr. is university research associate at the UP Third World Studies Center. Molmisa Ronald M. Molmisa is a fellow and formerly university research associate at the UP Third World Studies Center.

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