Aquino Regime Coping With Labor Strife

In his air-conditioned office in the old Intramuros section of Manila, Labor Minister Augusto Sanchez was feeling the heat.

President Corazon Aquino’s executive secretary wanted a report on the labor law left by deposed President Ferdinand E. Marcos, a collection of decrees and regulations. More than 50 strikes were in progress across the country. At the Ministry of Labor, more than 8,000 people in 20 separate bureaus were nervous about a pending shake-up under the new management.

And Sanchez, after little more than a month on the job, was under fire.

“The people have been given new confidence by the Aquino government,” Sanchez said. “All this is a test of that confidence.”

A recent speech by Fred C. Whiting, president of the American Chamber of Commerce here, had raised the political temperature.

“In my view,” Whiting had said, “the No. 1 inhibition to foreign investment in this country in the coming months will be the labor situation. One of the main attractions of the Philippines as an investment site is its labor--reasonably well educated, with a comparatively good working knowledge of English, reasonably productive.

“But I see the growing militancy of labor as wiping out these advantages. I see a great danger that the Communists, having suffered a setback as the result of the peaceful revolution and losing their grasp on their mass base, will focus their attention on the labor unions as the best available vehicle for the promotion of their cause.”

Later, in an interview, Whiting said: “If I were heading the Communist Party of the Philippines, I know where I’d go.”

Replied Sanchez: “That’s his opinion. I disagree. Mr. Whiting talks about things he hasn’t seen yet.”

Whiting did not mention Sanchez in his speech, and later he described the 54-year-old former human rights lawyer as a “moral, idealistic man.” But Sanchez himself is part of the unease that employers are feeling about the labor situation.

Sanchez was an opposition assemblyman under the Marcos regime. According to a diplomat, he was “easily the most radical in the assembly.” But he was not a member of the opposition leadership, nor is he one of the better-known figures in the Aquino Cabinet.

Sanchez says he does not know where he stands on the political spectrum or why he was chosen as a minister, but he does not hesitate to express his views. Of employers, he said: “When you grab all your profits without regard to the rights of workers, that’s exploitation. I don’t know what else to call it.”

Criticized by Left

Some politicians and labor experts say he was chosen to deflect criticism of the new government by the far left, particularly the big KMU labor federation, a militant organization reportedly heavily influenced by the Communist Party.

Two days after Whiting’s speech, the KMU issued a statement saying it was “more than alarmed” by his remarks. The federation went on to say that Whiting and other representatives of foreign investors have “all the reasons to worry” because it intended to shift its organizational focus to the multinational companies here.

The Filipino work force is not highly unionized; only about one of every 20 workers belongs to a union. Labor experts say that most of the bargaining contracts are “sweetheart deals” and that payoffs to local organizers were prevalent under the Marcos regime.

As Whiting suggested in his speech, deals and favoritism also extended to the government bureaucracy.

“We need to know that if as businessmen--and as foreigners--we get into a dispute in this country, we can go to the courts and the courts will apply the law, the law as it is written down for all to read, not just some judge’s notion of social justice,” Whiting said.

“We need to know that the outcome of a dispute when adjudicated in the courts will not be determined on the basis of whether we are Filipino or foreigner, whether we are a big company in a dispute with a small employee, whether we have friends in the right places or not, whether our lawyer went to law school with the judge, and so on.”

American-Style Ministry

The Labor Ministry is set up on American lines, with a Labor Relations Board and standards for labor practices. On paper, the sharpest difference is a strike ban in designated export-processing zones. As elsewhere, strikes usually involve demands for increased wages and benefits and better working conditions.

The official minimum wage for an industrial worker is about $2.50 a day, but few employers pay that much, and the Marcos administration did not make enforcement a priority.

Whiting says that he supports unionism and that “there is much, much room for improvement of the lot of the Filipino worker.” But, he said, “it needs to be done in the least disruptive way possible.”

Whiting, Sanchez and others agree that Aquino’s aim should be the creation of jobs. Unemployment is estimated at 20%, a million Filipinos enter the labor market every year, and a big safety valve--contract labor abroad--is coming to an end, particularly in the Middle East, where the oil states are cutting back their foreign work forces.

Union militancy, Whiting argues, will discourage new foreign investment and even the return of capital by Filipinos who left the country under Marcos.

A key to the investment appeal here is low wages.

“I was talking to some people this morning who wanted to open up a place here to make crowns for teeth,” Whiting said. “In the States, they would probably have to hire semi-skilled workers. Here they can get trained dentists to do the work at a lesser wage.”

Political Overtones

It is debatable whether union-forced wage increases would drive investors away. “The government wouldn’t let wages get that high,” the diplomat predicted. “They could triple and still be attractive. I can’t see labor deteriorating.”

The investors’ immediate concerns seem to focus more on political overtones in some parts of the union movement and the Labor Ministry, and the possibility of resulting unrest.

The labor minister is being watched closely by foreigners and Filipinos alike in this regard. “Every little bit of progress that Sanchez makes undercuts the KMU,” the diplomat said. He described Blas Ople, who was labor minister under Marcos, as “more management-oriented.”

But Sanchez keeps using words like exploitation and profit sharing, which make employers nervous. Aurelio Periquet Jr., president of the Philippine Chamber of Commerce and Industry, charged that Sanchez’s comments “tend to drive a wedge between the owners of the country’s productive assets and labor.”

“The thrust of what we’re trying to do is create good relations between labor and management,” the new minister said. “We’re going to submit some ideas to the Cabinet. Profit sharing is just one of the concepts we’ve discussed. This is not a leftist idea or a Communist idea. It’s not the Communist approach.”

‘Know What They Want’

But he says he finds it easier to work with the radical KMU than with other labor federations. “They know what they want,” he said.

Nationalism will also be a Sanchez trademark. When a walkout by Filipino workers temporarily blocked the gates to the big American military bases here recently, he said, the United States “was asking us to declare the strike illegal.”

But, he went on: “I didn’t raise a finger. Why should I? The American military has never submitted to Philippine jurisdiction on labor matters here.”