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Salient. Official Newspaper of the Victoria University Students' Association. Vol 44 No. 13. June 15 1981

Of Profits and Poverty

page 2

Of Profits and Poverty

Multinational Domination

The degree to which transnational corporations dominate the Phillipines' economy is remarkable. The Filipino bureaucrats (such as Marcos and his gang of 26 families who run the Philippines) collaborate with foreign companies in their mutual interest of exploiting the land and the people.

The US bought the Philippines from the Spanish for $20 million in 1898 (the Treaty of Paris) and since then the lopsided economic relationship has intensified with the Philippines remaining an exporter of raw materials and an importer of finished products. Industries there constitute little more than assembly plants for US corporations.

In 1977 the US ambassador summed up the get-rich-quick scheme of foreign companies when he spoke about "multinationals who come to the Philippines with nothing but a company name and a logo."

Central Bank data shows that the greatest portion of foreign capital invested in the Philippines is directly owned by US monopolies (80%), followed by the Japanese.

The US hold over strategic sectors of the economy is powerful. It owns 33% of equity capital of the 900 largest firms in the Philippines. Two US corporations control over 80% of the heavy equipment manufacturing. The prospects are certainly attractive for foreign investors. Between 1964-1972 multinationals took out $5.60 for every dollar they invested.

Food Exported while Workers Starve

However the 85% of Filipinos who live below the poverty line, their families subsisting on less than 40c per day - get nothing from the huge foreign investment. While they starve, significant quantities of meat and rice are exported by foreign-owned corporations.

It is not simply a case of foreign investment not benefitting the majority of Filipinos, but that these companies, the same companies that rip off workers all over the world, are responsible in conjunction with their puppet government allies for the shocking poverty that 85% of the population faces.

Export Processing Zones

Export Processing Zones, of which there are half a dozen in the Philippines, are clear-cut examples of how the government legislates to aid foreign companies in ripping off both workers, peasants (whose lands are confiscated to make way for the industrial compounds).

Foreign companies are exempted from taxes and custom duties on imports of machinery and raw materials and on exports. Low rents, full repatriation of investment, plus the lowest wage rates in Asia are part of the deal.

The Bataan Export Processing Zone (BEPZ) where we visited is 70% foreign owned. Inhabitants of the zone described it as a sort of free exploitation zone where the labour force is kept docile by a large military presence.

The minimum wage rate is 27 pesos per day (roughly $4) but the government's own statistics show that in 1974 it would cost an average family in Manila 49 pesos to survive. But most workers are not paid even this paltry sum. Only regular workers (those who have worked for one company for longer than 6 months) receive it. "Apprentices" receive approximately 11 pesos per day. Companies practice a devious policy of laying off "apprentices" before their 6 months are up and re-employing from the large pool of unemployed (40% of the population). That way they avoid paying full rates. Workers are forced to work 12-16 hours a day simply to survive. Many take on second jobs at night such as prostitution and drug pushing.

Concentration Camp Conditions

Conditions for the 35,000 workers there are abysmal. The appearance of the zone is like a giant industrial concentration camp. Workers are reduced to industrial slaves. There is no housing provided by the zone authorities for the mainly migrant population. 80 rip-off business people have bought up "houses" for which they charge phenomenal rent. Often 30-40 workers are crammed on the floor of a small bedroom, sleeping in shifts.

Any attempt made by workers to organise is met with savage repression. Laws such as preventitive suspension means that workers suspected of being organisers are laid off automatically. Strikes in vital industries are banned, with the definition of "vital" being liberally extended to include wire and soy sauce industries.

Strike at Fords

We talked with workers involved in the 1979 Fords strike. A leaked document revealed that the company was making a net profit of $2 million per month. The 700 workers asking for a 1 peso per hour (13c) increase eventually resorted to striking. They mounted a picket outside and the company brought out fire trucks and turned high pressure hoses on the strikers. At night the military appeared and removed the remaining strikers to a detention camp where they were held without food and water for 18 hours.

Revolution Necessary

Workers learn from such fights that only a complete overthrowing of the present system will improve their position.

Workers commented on the experience: "If we individuals fail in this struggle we must move our struggle to a higher level."

"Although strikes are illegal in the Philippines we will continue to struggle because we will win in the end."

Top Form Strike

In December 1980 workers, mainly women, at Top Form Garment factory in Manila went out on strike demanding a living wage, better working conditions and recognition of their union.

When we visited the factory the strike was in its ninth day. A high level of organisation was evident. The picketing was organised on a shift basis so that they could prevent scabs trying to enter the factory. Many of the strikers had spent the past few nights on the hard cement. Money was collected from the public and other workers to support them.

In August 1979 the workers had formed a union to which 90% of the factory's 1200 workers belonged. They launched their first strike in September of that year demanding, among other things, recognition of their union. It was registered with the Ministry of Labour but the management still refused to recognise it. In that strike workers faced military harrassment.

Shocking Working Conditions

Workers on the picketline spoke of the intolerable working conditions inside the factory. It is extremely hot but the management provide only 1 fan for a line of 80 workers. To counter the heat they resort to putting wet towels over their foreheads. Many suffer from TB and other pulmonary diseases caused by the excessive heat.

There is no canteen and workers must eat outside, even in the pouring rain. On the rare occasion that workers are allowed in the office lobby the management puts cardboard down so they won't dirty the marble floor. As we left the picket it seemed pretty certain that the military would move in to disperse their picket; police vehicles were already gathering around. But despite continuing military harassment the determination apparent among the workers we spoke to must ensure their eventual success.

Photo of Philippino people

Photo of Philippino houses