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The right to social security of the workers in the informal economy/ sector
Scope and Context of the Report
2020 was a very challenging year globally and it continues until today. The Coronavirus
or more commonly known as the COVID-19 pandemic has created unforeseen situations and
brought profound impacts on various sectors. It also highlighted the strengths and weaknesses
of societies as well as governments. Marginalized people, including the workers in the informal
economy/sector (WIES), have also become more vulnerable during this health emergency due
to their inability to survive a prolonged suspension of their opportunity to generate income.
According to the International Labour Organization (ILO), informal economy refers to
“all economic activities by workers and economic units that are – in law or practice – not
covered or insufficiently covered by formal arrangements.” The ILO further explained that the
informal economy consists of independent, self-employed small-scale producers and
distributors of goods and services. Workers in this sector are for the most part not covered by
the country’s labor laws and regulations. Proxy measurement and related indicators for the
informal economy include the vulnerable employment rate, defined as the “share of ownaccount and contributing family workers in total employment.”1 Republic Act No. 8425, or
otherwise known as the Social Reform and Poverty Alleviation Act defines workers in the
informal sector as “poor individuals who operate businesses that are very small in scale and are
not registered with any national government agency, and to the workers in such enterprises
who sell their services in exchange for subsistence-level wages or other forms of
compensation.” On the other hand, Resolution No. 15 Series of 2002 of the National Statistical
Coordination Board (NSCB) refers to the informal sector as
those which consists of ‘units’ engaged in the production of goods and services with
the primary objective of generating employment and incomes to the persons concerned
in order to earn a living. These units typically operate at a low level of organization,
with little or no division between labor and capital as factors of production. It consists
of household unincorporated enterprises that are market and non-market producers of
goods as well as market producers of services. Labor relations, where they exist, are
based on casual employment, kinship, or personal and social relations rather than
formal or contractual arrangements.
International Labour Organization, Informal economy in the Philippines, available at
https://www.ilo.org/manila/areasofwork/informal-economy/lang--en/index.htm (last accessed 4 March
2021).
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