RECEIVED

Republic of the Philippines ong

HOUSE OF REPRESENTATIVES

pate: 3 J

Quezon City TIME: _ YG)
a By: (LX gf
17" CONGRESS z
First Regular Session REGISTRATION UNIT
326 BILLS AND INDEX SERVICE

HOUSE BILL NO.

Introduced by REP, EVELINA G. ESCUDERO

EXPLANATORY NOTE

Itis the State’s responsibility to give the highest priority to the enactment of measures
that protect and enhance the rights of all people to human dignity, reduce social, economic
and political inequalities and remove cultural inequities by diffusing wealth and political
power for the common good and to provide environments at national and local levels that
enable all workers to fully develop into productive and responsible citizens.

This bill seeks a way forward for the social protection and empowerment of almost 15
million members of the informal sector by providing access to social protection benefits and
to provide appropriate regulation, due representation in local government agencies and
meaningful planning that will hamess their full potentials to become effective economic
actors.

This proposed Magna Carta of Members of the Informal Sector is one significant
contribution toward fulfilling the Constitutional mandate of social justice and human rights
for the informal poor. Both civil society and government are giving their best efforts to make
life a little better for the poor. There is a need for the latter to redefine and scale up not only
its priorities, political will but more fundamentally, its genuine care for the poor.

The best entities to design culturally sensitive and appropriate social protection and
delivery mechanisms are the local government units (LGUs) and their constituencies.
Ensuring wider and deepened grassroots participation in improving access to social
protection will reduce urban poverty in the Philippines. It is in this regard that several
provisions deal with the participation of the local government units as well as the crucial role
of the National Economic Development Authority (NEDA).

Aside from the rights, the bill also contains provisions that tackle responsibilities of
the members of the sector. Further, this bill also provides for specific recourse mechanisms
to the basic sectors so that their grievance can be better redressed and their welfare be given
attention.

The 2008 Informal Sector Survey (2008 ISS) conducted by the National Statistics
Office (NSO) yielded that there were about 10.5 million informal operators identified. Some
sectors however assert that the informal sector is estimated to reach 15 million, or almost fifty
(50 percent) of the country’s labor force.

HOUSE ‘F REPRESENTATIVES



Contrary to the usual notion, the informal sector is quite productive. They provide
array of services to the public and are engaged in legitimate undertakings. According to the
National Statistical Coordination Board (NSCB), forty three (43 percent) of the country’s
Gross Domestic Product (GDP in 2006 came from the informal sector.

Sadly, this contribution of the informal sector to the economy is insufficiently
recognized. This is proven by the inadequate legal and social protection accorded to this
sector. What is worse is that members of informal sector groups have been a source of not
only of local revenues such as market taxes: they are also vulnerable to kotong.

Based from 2003 figures of the National Statistical Office (NSO) and the National
Statistical Coordination Board (NSCB), at least three out of every ten Filipinos are poor.
Using self-rated methods, more than half of the almost 78 million Filipinos view themselves
as kabus, pobre, or mahirap (the Visayan and Tagalog word for poor).

Abject situation of the members of the informal sector violates the international laws
and the provisions of the Constitution on Social Justice and Human Rights.

Ratified by the Philippine government in 1974, Article 9 of the Intemational
Covenant on Economic , Social and Cultural Rights states “The State Parties to the present
Covenant recognize the right of everyone to social security, including social insurance”.

The 1987 Constitution also directs the State to provide social justice and human rights
to poor and marginalized sectors such as the informal sector.

It is in this direction that this bill is proposed.

EVELINA G. ESCUDERO.


Republic of the Philippines
HOUS OF REPRI NTATIVES,
Quezon City

17" CONGRESS
First Regular Session

an
HOUSE BILLNO,_ 3&0

Introduced by REP. EVELINA G. ESCUDERO.

AN ACT
PROVIDING FOR A MAGNA CARTA OF WORKERS IN THE INFORMAL
SECTOR, INSTITUTIONALIZING MECHANISMS FOR IMPLEMENTATION
THEREOF AND AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF
REPUBLIC ACT NOS. 7160 AND 8282.

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled.

Title I
GENERAL PROVISIONS,

Chapter I
Framework and Principles

SEC.1. Short Title, This Act shall be known as the “Magna Carta of Workers in the
Informal Sector.”

SEC. 2. Declaration of Policy. Itis hereby declared the policy of the State:
(a) to promote and improve the total well-being of the poorest of the poor and the

marginalized low level income earners who engage in economic activities under
the informal sector:

(b) to nurture and protect the interests of the informal sector by providing them with
adequate and timely social, economic and legal services, as well as mechanisms
that shall protect their rights and promote benefits that ensure their dignified
existence and economic advancement;

(©) to recognize, promote, protect and fulfill the rights of every worker in the
informal sector including the right to self-organization, the right to decent work,
just and humane working conditions, access to social protection, and the right to
represent their organizations in a continuing process of consultation and dialogue
towards maximizing the provision of a comprehensive package of reforms,
interventions, and services in accordance with their articulated needs and
interests, with focus on the vulnerable groups:



(d) to recognize the roles and contributions of workers in the informal sector and
make them visible in the national and local statistics:

(e) to develop and enhance their entrepreneurial skills and capabilities so that they
can become more productive and self-reliant citizens thereby ensuring

participation in mainstream economic activities based on their own pace and self=
determination;

() to promote gender equity and equality through elimination of gender stereotypes
attached to certain enterprise or occupation in the informal sector and redefining
household as not merely male headed but also female headed;

(g) to protect. women workers in the informal sector against gender-based
discrimination, exploitation, violence and abuse;

(h) to advance the women workers’ social, political and reproductive rights and
provide access to social protection and participation in decision-making bodies;

to recognize ethnicity in the formulation of programs and mechanisms to promote
and protect informal sector’s rights;

() to protect vulnerable groups in the informal sector such as children, elderly,
differently-abled persons and indigenous people from discrimination,
exploitation, abuse and harassment;

(k) to progressively eliminate child labor in the informal sector through the creation
of more quality jobs for adults, effective enforcement of laws against child labor,
improved access to universal education and elimination of cultural factors that
tolerate child labor:

() to develop the local economy through maximization of the potential and
contribution of the informal sector business activities and enterprises.

SE

3. Framework and Principles. It is the State’s responsibility to give the highest

priority to the enactment of measures that protect and enhance the rights of all people to
human dignity, reduce social, economic and political inequalities and remove cultural
inequities by diffusing wealth and political power for the common good and to provide
environments at national and local levels that enable all workers to fully develop into
productive and responsible citizens. Towards this end, the government shall pursue and
implement a comprehensive, rights-based, participatory and gender responsive framework
for workers in the informal sector that includes but is not limited to:

(a) putting in place policies and programs that will bring marginalized workers and
economic units into the economic and social mainstream and spur entrepreneurial
or growth-oriented informal businesses to graduate to formal status based on their
own pace and self-determination:

(b) pursuing structural reforms in all relevant levels of government by creating
committees, special offices for development and protection of workers in the


(e) encouraging the organization, establishment, strengthening and expansion of the
various business activities or enterprises under the informal sector in the barangay
level preferably unified under a municipality, provincial, regional and national
federation/association:

() exacting responsibility on the part of the informal sector workers provided that the
state shall recognize their rights and put in place responsive, transparent and
accountable mechanisms to ensure protection, promotion and realization of those
rights.

SEC. 4. Definition of Terms. As used in this Act, the following terms shall mean:

(a) hazardous work or condition refers to any activity or circumstance where a
worker is exposed to any risk which constitutes an imminent danger to his/her
health and safety.

(b) ambulant vendors or peddlers refer to vendors who ply their trades in search of
buyers.

(c) street vendors refer to vendors who sell their merchandise on streets and sidewalk.

(a) informal sector
(1) For purposes of identification and coverage of the law, the informal sector
otherwise known as IS consists of “units”, whether individual or group, own-
account/self-employed or micro-entrepreneur or livelihood enterprises
regularly employing family members, engaged in the production of goods and
services with the primary objective of generating employment and incomes to
the units concemed 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 enterprises that are market
and non-market producers of services.
(2) The category of individuals or organization of people involved in any business
activity or enterprise whose total assets, inclusive of the capital investments,
must not value more than the amount of:

i, One hundred fifty thousand pesos (P150,000.00) for small transport;

ii, One hundred fifty thousand pesos (P150,000.00) for marginalized farmers;

iii, One hundred fifty thousand pesos (P150,000.00) for marginalized
fisherfolks:

iv. Fifty thousand pesos (P50,000.00) for home-based workers;



v. One hundred fifty thousand pesos (150,000.00) for small vendors with
designated stalls;
vi. Fifteen thousand pesos (P15,000.00) for ambulant and street vendors.

The aforestated amount shall be adjusted every five years by the
Informal Sector Development Council (ISDC), which is created under this
Act. Adjustment of the aforestated amount shall be based on prevailing
poverty threshold and other established standards in determining subsistence
level of living.

For purposes of exclusion, corporations, quasi-corporations, units with
ten or more employees, corporate farms, commercial livestock raising and
commercial fishing are excluded from this definition of informal sector.

(©) worker refers to a general term to mean either or both the micro-entrepreneur or
own-account/self-employed covered under the provision of this Act as defined in
the preceding paragraph.

(O) pakyaw basis refers to the pre-contracted wholesale mode of paying an informal
sector worker as bilaterally agreed by the contracting parties.

(g) entrepreneurial or growth oriented informal business refers to those which show
potential in increasing productivity, in hiring workers from outside the household,
in developing new competencies in areas of production and operations.

(A) informal sector sub-groups- for purposes of this Act, refer to vendors, small
farmers, marginalized fisherfolks, small transport, home-based workers and non-
corporate construction workers and micro-informals and self/own account.

(i) small transport refers to non-corporate operators of small marine boat or vessel for
transport, tricycle, pedicab, habal-habal, calesa, kuliglig, balsa or “trolley” and or
community-based mode of transportation

(small farmer refers to an individual engaged in subsistence farming including the
sale, barter, exchange of agricultural produets or processing of agricultural and
other by-products produced by hinvherself and his/her immediate family, or rural
workers who are tenants or sharecroppers or contracted laborers provided they do
not fall under the category of agricultural workers under the Labor Code.

(i) marginalized fisherfolks refer to individuals engaged in subsistence fishing such
as but not limited to the use of fishing boats less than three (3) tons, use of fishing
gear which do not require boats, those who are without fishing boat or gear but
share in the first catch of individuals having fishing boats, those engaged in
subsistence aquaculture, or those engaged in the processing of marine and other
by products in subsistence level. This also includes immediate family members,
especially women, who engage in the preparation of fishing gears and other needs
before fishing activity and who engage in the sale, barter or exchange of marine
products produced. Also included in this category are fishport workers, porters
and batillo.



(k) non-government organizations (NGO) refers to any aggrupation of individuals,
not subsidized by government funds or organized for religious purposes or
partisan politics, and whose primary ends are advocacy of issues or the
realizations of specific developmental objectives for the community or a sector
thereof.

(l) people’s organization (PO) refers to any cooperative, union, business group or
any aggrupation of at least twenty-five (25) individuals belonging to the same
sector or sharing a common interest, not subsidized by government funds or
organized for religious purposes or partisan politics, and whose primary concern is
the advocacy of sectoral issues; and/or the realization of specific developmental
objectives for their sector or the promotion of their common interest.

(m) Informal Sector One-Stop Shop Center refers to the office at the local government
units (LGUs) where all transactions needed in the processing of business permits
and other business requirements of the Informal Sector workers shall be
conducted.

(n) Workers of minor age refer to children fifteen (15) to seventeen (17) years of age
who are engaged in productive employment.

Chapter II
Coverage, Qualifications and Accreditation

SEC. 5. Coverage. This Act shall cover members of the informal sector who are
operating, employed or working either as micro-entrepreneur or self-employed/own
account as defined herein. Provided, however, that the aforesaid micro-entrepreneur, self-
employed, qualifies in the minimum requirements set forth in this Act.

For purposes of this Act, the term “informal sector” shall cover the following:

(a) micro-entrepreneurs and self-employed:
i. vendors, whether with stalls or without including ambulant vendors, street
vendors or those plying their goods and trades in streets and those engaged in sari-
sari stores which conform with the total asset value requirements as mentioned in
Section 4 (d) of this Act:
small farmers;
iii, marginalized fisherfolks;
iv. home-based workers who are independent producers of goods or services and
whose total asset value conforms with that mentioned in Section 4 (4) of this Act;
v. small transport such as but not limited to non-corporate operators of small
marine boat or vessel for transport, tricycle, pedicab, habal-habal, calesa,
huliglig, balsa or “trolley” whose total asset value conform with the requirement
as mentioned in Section 4 (d) of this Act.

(b) own-account/self-employed:
i, on call domestic and service workers such as live-out cleaners, laundry men
and women and plantsadora;
ii, barbers, manicurists, pedicurists



iii, drivers of tricycle, pedicab, habal-habal, kalesa, kuliglig, “trolley” or small
marine vessel/boat:

iv. “barkers”, fare collectors, dispatchers and other workers who share in the
income of the non-corporate operators;

v. welders and mechanics:

vi, non-corporate constructions workers such as but not limited to carpenters,
plumbers, electrician, mason or house painters:

vii. appliance technicians including but not limited to television, radio, air
conditioner, computer and refrigeration technician:
viii. scavengers

SEC. 6. Registration. ‘There shall be a simple standard of registration system in
accordance with the framework and principles of this Act. Informal sector business activities
or enterprises shall, upon registration, pay one hundred pesos (P100.00) to the municipality or
city where they intend to operate during their initial year of operation. The said fee shall
cover the cost of the issuance of the license to operate. No other fees shall be exacted from
the informal sector business activities or enterprise other than the registration fee as
mentioned above.

Informal sector business activities or enterprises which are in operation and
registered, pursuant to applicable laws or local ordinance, prior to the enactment of this Act
shall be recognized as having complied with the registration requirement of this Act and shall
no longer be required to pay the registration fee as mentioned in the preceding paragraph.

The registration shall entitle the informal sector business acti
development programs and benefits under this Act.

ies or enterprise to

All local government units shall establish an Informal Sector One-Stop Shop Center
which shall handle all transactions and processing of the business permit applications within
their respective jurisdiction, The Center shall ensure that the processing of the business
permit of informal sector business activities or enterprises shall be done on the day of their
application and the registration shall be released within thirty six (36) hours upon submission
of the complete requirements based on its checklist. To facilitate efficient and expeditious
registration of informal sector business activities or enterprise, the local government units
shall formulate a uniform and simple checklist of requirements for registration such us valid
proof of identity (barangay clearance, certificate of residency, etc.) and flowchart of the
procedure of registration. The local government must ensure the recognition and registration
of women workers in the informal sector through appropriate activities. The local
government unit shall be responsible in translating the checklist of requirements and
flowchart of procedure of registration in their own local dialect. The local government unit
shall cause the posting of the checklist and flowchart of procedure of registration in at least
three (3) conspicuous areas, preferably public areas, in the community and cause the
publication of the same in the local newspaper if there be any.

Further, the Center shall maintain a comprehensive database of informal sector
business activities and enterprises which have been issued licenses to operate. The database
shall take into account the different sub-classifications of informal sector in terms of
geography (urban or rural based), premises (home-based or non home-based), gender (male
or female), ethnicity (ethno-linguistic group or indigenous community), vulnerability
(children, elderly or person with disability), industry (industrial, commercial, services or



agricultural), occupation (fisherfolks, farmers, construction, drivers, vendors, laborers or
sales personnel), nature of employment (casual, contractual, seasonal, permanent/regular or
pakyaw/commission basis/boundary system) and roles/functions (own-account/self-employed
or subsistence/marginal employment). The database shall also indicate those informal
businesses which may be categorized as livelihood enterprises and those entrepreneurial or
growth oriented informal business.

The aforesaid comprehensive database of the informal sector shall be a basis of the
assessment and monitoring of the growth of the informal sector.

SEC. 7. Annual dues. Informal sector business activities or enterprises shall pay
annual dues to the Informal Sector One-Stop Shop Center or Treasurer of the municipality or
city where they are registered and accredited, starting on their second year of operations,
based on the following schedule:

(a) those with net worth amounting to less than P 25,000.00 P 250.00
(b) those with net worth amounting to P 25,000.00 but less than P 500.00
P 50,000.00

(c) those with net worth amounting to P 50,000.00 P 750.00
but less than P 75,000.00
(d) those with net worth amounting to P 75,000.00 P 1,000.00

but less than P 100,000.00

(e) those with net worth amounting to P 100,000.00 but less than P1,250.00
P125,000.00

(f) those with net income amounting to P 125,000.00 but less than P 1,500.00
P150,000.00

A financial statement as proof of the net worth must be provided.

The collected fee shall accrue exclusively to the municipality or city and shall be used
for informal sector development programs approved by the municipal or city council.

Additional Sources of Funds for LGUs - The following shall be tapped by LGUs as
additional sources of funds for informal sector focused development initiatives:

(a) ninety percent (90%) of fees and annual dues collected from small transport - for
programs for workers in the small transport industry;

(b) ninety percent (90%) of collected fees and annual dues from business
establishments and entrepreneurs falling under the category of informal sector -
for programs focusing on micro-entrepreneurs and their workers;

(©) ninety percent (90%) of collected fees and annual dues from small vendors - for
programs focusing on vendors;

(d) ninety percent (90%) of fees and annual dues collected from small farmers — for
programs focusing on small farmers;

(e) ninety percent (90%) of fees and annual dues collected from marginalized
fisherfolks — for programs focusing on marginalized fisherfolks.



() ninety percent (90%) of fees and annual dues collected from the Philippine
Amusement and Gaming Corporation (PAGCOR) and Philippine Charity and
Sweepstakes Office (PCSO).

An Informal Sector Development Fund shall be established in every municipality and

city for their supervision and management subject to accounting and auditing procedures by
the Commission on Audit (COA).

SEC. 8. Monitoring of growth. The local government unit in cooperation with the
Informal Sector Local Development Office shall monitor the growth of the informal sector
business activities or enterprises three (3) years after the enactment of this Act and every
three (3) years thereafter.

Title
RIGHTS AND BENEFITS OF WORKERS IN THE INFORMAL SECTOR

Chapter I
General Rights

SEC. 9. Basic Rights. The rights of Informal Sector workers shall be actively
protected, promoted and upheld. These include the right to:

(a) self-organization to collectively negotiate with the government and other entities
in the promotion of their welfare and advancement of their interests free from any
political interference or favor;

(b) informed participation in decision-making processes relevant to the concerns of
Informal Sector workers through their legitimate organizations;

(©) equal treatment before the law;

(@) safe conditions in the workplace that will safeguard their general and reproductive
health;

(e) accessible and affordable medical care and reproductive health services;
(£) accessible social protection and basic services including but not limited to health
services and low-cost housing to enable Informal Sector members to have a

humane quality of life;

(g) equal access to education, skills training, and economic resources to develop their
self-reliance:

(h) equal access to information technology, especially those affecting their welfare
and interests:

@ freedom from any form of discrimination, violence, sexual exploitation,
harassment and abuse:

(i) common workplaces, merchandising centers, and inventory bulk-buying centers;

10


(k) freedom from deprivation of property without valid cause and due process of the
law;

(1) alternative dispute resolution mechanisms and processes; and

(m) equal access to justice through appropriate mechanisms.

SEC. 10. Rights to Medical Care and Humane Treatment. Every worker has a right to
good quality health care, without any discrimination and within the limits of the resources
available for health and medical care. Attention must be given to women’s health. In the
course of such care, the human dignity, culture, convictions and integrity of the informal
sector workers shall be respected

Any person who engages informal sector workers shall, at all times, treat the latter in
a just and humane manner. In no instance shall abusive language, physical violence or any act
which debases, degrades or demeans the intrinsic worth and dignity of the worker as a human
being be used upon the latter.

SEC.11. Progressive Land Tax. LGUs shall impose a progressive land tax to
landholdings above three (3) hectares. The collected progressive land tax shall be allocated
for the local agriculture support services. Public agricultural lands within the territory of the
LGU and/or all the LGU-owned agricultural lands beyond five (5) hectares shall be
distributed to small landless farmers in their territory.

SEC. 12. Local Fisheries Support Services. The Municipality/City shall provide
capacity building training, access to collateral-free and gender-balanced credit, marketing
assistance and infrastructure development for marginalized fisherfolks within their
jurisdiction. LGUs are mandated to establish a fishers’ market or a Bagsakan where the
marginalized fisherfolks can directly sell their products to the public.

Chapter II
Empowerment of Informal Sector Workers

SEC.13. Informal Sector Workers’ Organization. Informal Sector workers shall be
encouraged to organize themselves for their mutual aid, benefit and protection and for other
legitimate purposes. Towards this end, the government shall encourage and assist the
Informal Sector workers in the formation of their self-help organizations, associations,
federations and confederations. The government shall encourage the formation of
cooperatives among marginalized farmers, marginalized fisherfolks and home-based workers,
with attention to the organization and formation of women and other vulnerable identities, in
order to enable members to purchase inputs at lower cost and obtain fair prices for their
produce.

Informal Sector workers engaged in farming, fishing, manufacturing, transport, retail
and services are encouraged to form cooperatives in every municipality and city to enable
members to avail of credit assistance and skills training which will help improve their quality
of life.

i



SEC. 14. Assistance to Informal Sector Workers’ Organization, All concerned
national government agencies, government financial institutions and local government units
shall include in their plans, programs, projects and activities efforts that are supportive of the
concems of Informal Sector workers’ organizations.

SEC. 15. Representation in Policy Making Bodies. It shall be the responsibility of the
local government units to ensure the participation of Informal Sector workers in public
decision-making processes. Informal Sector workers have the right to participate at all levels
of decision-making.

The State shall therefore ensure that Informal Sector workers shall be given
mandatory representation in policy-making bodies and other legislative councils.

For this purpose, Sections 446, 457 and 467 of the Republic 7160 is hereby amended
to read as follows:

SEC. 446. Composition.
(a) The sangguniang bayan, the legislative body of the municipality, shall be
composed of the municipal vice mayor as the presiding officer, the regular
sanggunian members, the president of the municipal chapter of the liga ng mga
barangay, the president of the pambayang pederasyon ng mga sangguniang kabataan,
and the sectoral representatives, as members.

(b) In addition thereto, there shall be three (3) sectoral representatives: one (1) from
the women; and, as shall be determined by the sanggunian concerned within ninety
(90) days prior to the holding of local elections, one (1) from the agricultural or
industrial workers or INFORMAL SECTOR WORKERS; and one (1) from the
other sectors, including the urban poor, indigenous cultural communities, or disabled
persons.

(c) The regular members of the sangguniang bayan and the sectoral representatives
shall be elected in the manner as may be provided for by law.

XXX

SEC. 457. Composition.

(a) The sanggunian panglungsod, the legislative body of the city, shall be composed
of the city vice mayor as presiding officer, the regular sanggunian members, the
president of the city chapter of the liga ng mga barangay, the president of the
panlungsod na pederasyon ng mga sangguniang kabataan, and the sectoral
representatives, as members.

(b) In addition thereto, there shall be three (3) sectoral representatives: one (1) from
the women; and, as shall be determined by the sanggunian concemed within ninety
(90) days prior to the holding of local elections, one (1) from the agricultural or
industrial workers or INFORMAL SECTOR WORKERS; and one (1) from the
other sectors, including the urban poor, indigenous cultural communities, or disabled
persons.

12



(©) The regular members of the sangguniang panlungsod and the sectoral
representatives shall be elected in the manner as may be provided for by law.

XXX

SEC. 467. Composition.

(a) The sangguniang panlalawigan, the legislative body of the province, shall be
composed of the provincial vice-governor as presiding officer, the regular sanggunian
members, the president of the provincial chapter of the liga ng mga barangay, the
president of the panlalawigang pederasyon ng mga sangguniang kabataan, the
president of the provincial federation of sanggunian members of municipalities and
component cities, and the sectoral representatives, as members.

(b) In addition thereto, there shall be three (3) sectoral representatives: one (1) from
the women; and, as shall be determined by the sanggunian concerned within ninety
(90) days prior to the holding of local elections, one (1) from the agricultural or
industrial workers or INFORMAL SECTOR WORKERS; and one (1) from the
other sectors, including the urban poor, indigenous cultural communities, or disabled
persons.

(©) The regular members of the sangguniang panlalawigan and the sectoral
representatives shall be elected in the manner as may be provided for by law.

SEC. 16. Enactment of ordinance. The Local Government units shall enact an
ordinance implementing Section 14 of this Act within three (3) years from the effectivity
thereof.

Chapter IIL

Social Protection

SEC. 17. Medical/Health Insurance. An accredited Informal Sector worker,
regardless of age and compensation level, shall be covered by 50 percent of the lowest rate of
medical/health insurance under the Philippine Health Insurance Corporation
(PHILHEALTH), and be entitled to all the benefits provided for under the law. The free
medical/health insurance coverage shall also extend to Informal Sector workers who are
contracted/self-employed, as defined herein, and who are earning below the minimum wage.

SEC. 18, Social Security Coverage. An accredited Informal Sector worker, regardless
of age and compensation levels, shall be covered by social security and be entitled to all the
benefits provided under Republic Act No. 8282; provided, that the corresponding monthly
contributions of small farmers shall be remitted every six months scheduled every post
harvest of farm produce. For this purpose, Section 22-A of Republic Act 8282 is hereby
amended to read as follows:

SEC. 22-A. Remittance of Contributions of Self-employed Member. Self-employed
members shall remit their monthly contributions quarterly on such dates and
schedules as the Commission may specify through rules and regulations.
HOWEVER, FARMERS ENROLLED AS SELF-EMPLOYED MEMBERS SHALL
REMIT THEIR MONTHLY CONTRIBUTIONS EVERY SIX MONTHS
SCHEDULED EVERY POST HARVEST OF FARM PRODUCE; provided, that no

13


retroactive payment of contributions shall be allowed, except as provided in this
Section.

For purposes of this Section, the Social Security System shall, within ninety (90) days
from the effectivity of this Act, promulgate guidelines for the mechanism of
collecting the aforesaid premiums.

SEC. 19. Alternative Schemes of Providing Social Security. To further widen access
to social security of Informal Sector workers especially in poor urban and rural areas,
indigenous and alternative social protection schemes such as: "damayan', "tulungan",
“saranay”, small mutual benefit associations, and micro-finance organizations as well as
community-based micro-health insurance schemes initiated or participated by informal sector
workers shall be supported and strengthened by concerned national agencies and LGUs so
that these can be sustained, systematized and upscaled.

An enabling environment for such organizations and schemes shall be developed.
Toward this end, the Insurance Commission (IC) is hereby mandated to review its policies to
make them more supportive of alternative schemes of providing social security.

Other mechanisms to support such schemes shall be outlined by the Implementing
Rules and Regulation of this Act.

Chapter IV
Prohibited Acts Concerning Engagement of Informal Sector Workers

SEC. 20. Prohibition Against Night Work. Worker of minor age shall not be allowed
to render work between ten o’clock in the evening and six 0° clock in the morning of the
following day.

SEC. 21. Prohibition Against Work to be Undertaken. Worker of minor age shall not
be allowed to render work beyond their mental and physical capabilities.

SEC. 22. Prohibition Against Bonded Labor. A worker shall not be allowed to use
his/her future services as collateral for any loan or advances made or to be made by said
worker with the person who contracted his/her services. Likewise, no person shall be
allowed to bind the worker to his/her continued employ as a form of payment for any loan or
advances which he/she may have made with the former. Should there be an outstanding loan
incurred and he/she decides to unilaterally terminate engagement, said loan or advance shall
be paid by him/her to the person who contracted his/her services under the terms or
conditions of their agreement.

SEC. 23. Prohibition Against Labor Sub-Contracting. In no instance shall the person
who engaged the services of an informal sector worker sub-contract the services of the latter
to any third party.

SEC. 24. Prohibition Against Recruitment or Finders’ Fees. Regardless of whether
the worker was sourced either through an employment agency or a third party, said worker
shall neither be charged nor levied a recruitment fee or finder’s fee by the aforementioned
employment agency or third party.

14


SEC. 25. Prohibition Against Hazardous Work and Conditions. Any worker shall not
be engaged to work in any hazardous work, activity or undertaking, and neither shall he/she
be exposed to hazardous working conditions.

For purposes of this Section, hazardous work or conditions shall include, but not be
limited to the following:

(a) any work which requires workers to render services beyond eight (8) hours
without commensurate compensation;

(b) any work or activity which exposes the worker to physical, emotional or sexual
abuse;

(©) any work which involves manual handling or transport of heavy loads;

(@) any work in an unhealthy environment which exposes workers to hazardous
substances, agents or processes, or to temperature, noise levels, or vibrations
damaging to their health;

(e) any work which requires workers to continuously render service during late nights;

(f) any or all forms of slavery or practices similar to slavery, such as the sale and
trafficking of persons, forced or compulsory labor, debt bondage and serfdom;

(g) any use, procuring or offering of the worker for prostitution or pornography;

(h) any use, procuring or offering of the worker for the commission of any offense or
crime, particularly for the production and trafficking of narcotic drugs and
substances as defined in the Dangerous Drugs Act;

(i) any other type of work or activity which, by its nature or the circumstances in
which it is carried out, is likely to jeopardize the health, safety, or morals of the
worker; and

(i) any other type of work, activity, condition or undertaking that maybe hereinafter
be defined as hazardous by the Department of Labor and Employment.

SEC. 26. Prohibition Against Interference and Coercion. Any person is prohibited
from committing any of the following acts of interference and coercion:

(a) to prevent a worker from upholding or exercising his/her rights;
(b) to prevent workers from joining or assisting organizations for purposes not

contrary to law, in order to protect and defend their mutual interests and to obtain
redress of grievances through peaceful concerted efforts:

(©) to prevent a worker from carrying out his/her duties or functions in an
organization, or to penalize the same for any lawful action performed in that
capacity;



(d) to make calculated, serious and pre-meditated harassment and interference with
the intention of intimidating or preventing the worker from performing his/her
duties and functions:

(e) to make calculated, serious and pre-meditated harassment against, or to transfer,
penalize or terminate the services of a worker without valid or legal ground; and

(f) to perform acts calculated to diminish the independence and freedom of workers’
organization to direct its own affairs.

Chapter V
Security in the Workplace of Vendors

SEC 27. Designation of Workplaces. The Municipality or City, in coordination with
their respective Informal Sector Local Development Office, after consultation with the
vendors, the affected community, and other sectors or groups, shall identify and designate
viable workplaces, and design a system of assigning spaces to registered vendors. In case the
vendors shall prefer to conduct their business or enterprise within an identified private
property. the local government unit shall negotiate with the owner of the identified private
property for possible vending site and assist the parties in forging a memorandum of
agreement in case they reach such agreement.

Workplaces include markets, vacant areas within the vicinity of markets and other
vacant public spaces which may be designated as allowable vending sites.

The Municipal or City, within 60 days from the effectivity of this Act, shall cause the
conduct of a survey to identify vacant area(s) for vending in their respective locality.

The Sanggunian Panglungsod or Bayan shall, within 90 days after the survey and
pursuant to the recommendation of the Informal Sector Local Development Office, pass an
ordinance designating the workplace or workplaces. No workplace for vending purposes,
however, shall be designated as such without prior consultation with the vendors, the affected
inhabitants and other sectors.

Local Government Units which have already established or designated viable
workplaces for vendors prior to this Act is deemed to have complied with this provision of
the Act provided that the aforesaid establishment or designation of the viable workplace have
been undertaken after consultation with the vendors, the affected community and other
sectors or groups.

SEC 28. Policy on Eviction and Demolition. Registered vendors who have no
permanent or temporary vending site shall not be arbitrarily deprived of their livelihood by
being unjustly ejected from their workplaces nor their stalls demolished without prior notice
and consultation and provision of relocation to another viable workplace. The local
government units, government agencies and instrumentalities shall not conduct demolition or
eviction of the registered vendors without prior designation of their viable workplace. In case
demolition or eviction is conducted without compliance with the requirements under this
Section, the responsible person or officer who conducted or ordered the conduct of the same
shall be held administratively liable under this Act. Any responsible person or officer who
caused or ordered the destruction of any goods or products during the demolition or eviction

16



SEC 29. Relocation of Vendors. Before any public market is closed, sold or
demolished, all market vendors with stalls and market vendors without stalls shall first be
relocated by the city government or municipal government to a temporary or new public
market. Notice of the intention to close, sell, or demolish any public market shall be made to
all concerned vendors at least sixty (60) days before the actual transfer or relocation to
another market site. Within the sixty (60)-day period, the city government or municipal
government shall conduct consultations with the affected vendors on the selection of the
relocation site and the implementation of the relocation.

SEC 30. Temporary Vending Site. Pending the designation of a viable vending area
or areas, vendors occupying a public place or places not previously designated as vending site
or sites shall be provided with a viable temporary site or sites by the city government or
municipal government. Notice of temporary transfer shall be given to the vendors at least
fifteen (15) days before the actual transfer. This shall likewise cover and apply to vendors
who are granted with permits but whose workplaces are withdrawn from the list of allowable
vending sites. Any change in the list of allowable vending sites shall only be done after
consultations with the affected vendors.

SEC 31. Priority in the Assignment of Stalls. In the event that a new public market is
constructed in place of an old market that is closed, sold, or demolished, market vendors with
stalls displaced from their workplaces shall be given priority in the assignment of stalls in the
new market.

SEC. 32. Penalty for Non-compliance. Failure to implement the foregoing
requirements and provisions of Sections 25, 26, 27, 28 and 29 shall render the responsible
official administratively liable pursuant to Republic Act 7160 and other pertinent laws and
criminally liable whenever applicable.

Chapter VI
in the Workplace of Small Transport

SEC 33. Designation of Workplaces. The Municipality or City, in coordination with
their respective Informal Sector Local Development Office, after consultation with the small
transport groups, the affected community, and other sectors or groups, shall identify and
designate viable routes and terminal of tricycle and pedicab within the municipality or city
Municipalities where habal habal is the only mode of transportation shall also designate
viable routes and terminal for the same.

Viable terminal shall be in proximity to public buildings, public markets, private
markets, commercial districts or commercial establishments and other places which the
public frequently visits.

7


‘The Municipal or City shall, within 60 days from the effectivity of this Act shall cause
the conduct of a survey to identify vacant area(s) for terminals in their respective locality.

For access and safety. specific lanes within the road and routes will be designated for use by
tricycle, pedicabs and padyak.

The Sanggunian Panglungsod or Bayan shall, within 90 days after the survey and
pursuant to the recommendation of the Informal Sector Local Development Office, pass an
ordinance designating the viable terminal of tricycle, pedicab, habal-habal and other
members of the small transport as specified in Section 7 (a) (v) of this Act. However, no
designation of terminal shall be conducted without prior consultation with the small transport
groups, the affected inhabitants and other sectors.

Local Government Units which have already established or designated routes and
terminals of tricycle and pedicab prior to this Act is deemed to have complied with this
provision of the Act provided that the aforesaid establishment or designation of terminals
have been undertaken after consultation with the small transport groups, the affected
community and other sectors or groups.

SEC 34. Relocation of Terminals. Designated terminals for tricycle and pedicab shall
not be arbitrarily relocated without prior notice and consultation with the small transport
groups, the affected community and other sectors or groups. Aside from the aforementioned
requirements, relocation of terminals shall only be effective if the same is done through an
ordinance. After the enactment of the ordinance relocating terminals for tricycle and pedicab,
notice of intention to relocate terminals shall be made to all small transport groups end the
affected community at least sixty (60) days before the actual relocation.

SEC 35. Policy on Impounding of Vehicle. The tricycle, pedicab, habal-habal and
other similar mode of transportation shall not be impounded for mere violation of license or
registration or traffic rules and regulations unless the said vehicle was utilized to perpetuate
or in the conduct of criminal activity/ies. In case of mere violation of traffic rules and
regulations, a traffic violation ticket shall be issued to the erring driver without impounding
the said vehicle. The responsible person or officer who violated this Section shall be
administratively liable under this Act. Nothing herein shall prohibit the aggrieved member of
the informal sector from initiating a criminal or civil action against the responsible person or
officer whenever such action is applicable

SEC. 36. Penalty for Non-compliance. Failure to implement the foregoing
requirements and provisions of Sections 61 and 62 shall render the responsible official
administratively liable pursuant to Republic Act 7160 and other pertinent laws and criminally
liable whenever applicable.

Chapter VII
Security in the Workplace of Home-Based Workers

SEC 37. Policy on Eviction and Demolition. A home-based worker shall not be
evicted from his/her home, which is his/her workplace, without valid or legal ground as
provided in Republic Act 7279. However, in case eviction or demolition is warranted under
Section 28 of Republic Act 7279, the same shall be conducted after compliance of the
following:

18



(a) notice upon the affected persons or entities at least thirty (30) days prior to the date
of eviction or demolition:

(b) adequate consultations on the matter of resettlement with the duly designated
representatives of the families to be resettled and the affected communities in the
areas where they are to be relocated;

(©) presence of local government officials or their representatives during eviction or
demolitioi

(d) proper identification of all persons taking part in the demolition;

(e) execution of eviction or demolition only during regular office hours from
Mondays to Fridays and during good weather, unless the affected families consent
otherwise:

(8) no violence or unreasonable force shall be committed against women, children,
senior citizens, persons with disabilities and other identities similarly situated in
the course of eviction or demolition.

(g) no use of heavy equipment for demolition except for structures that are permanent
and of concrete materials;

(h) proper uniforms for members of the Philippine National Police (PNP) who shall
occupy the first line of law enforcement and observe proper disturbance control
procedures; and

(i) adequate relocation, whether temporary or permanent; provided, however, that in
cases of eviction and demolition pursuant to a court order involving
underprivileged and homeless citizens, relocation shall be undertaken by the local
government unit concerned and the National Housing Authority (NHA) with the
assistance of other government agencies within forty-five (45) days from service
of notice of final judgment hy the court, after which period the said order shall be
executed; provided, further, that should relocation not be possible within the said
period, financial assistance in the amount equivalent to the prevailing minimum
daily wage multiplied by sixty (60) days shall be extended to the affected families
by the local government unit concerned.

SEC. 38. Penalty for Non-compliance. Failure to implement the foregoing
requirements and provision of Section 34 shall render the responsible official
administratively liable pursuant to Republic Act 7160 and other pertinent laws and criminally
liable whenever applicable.

Chapter VII
Rights and Benefits of Non-Corporate Construction Workers, Own Account or Self-
employed Informal Sector Workers

SEC. 39. Right 10 Fees Earned. While there is no standard rate for the fees of
informal sector workers, the fees, in whatever mode it is made, shall not be below the
applicable minimum wage of the region where they are covered. Payment of fees shall be
made directly to the Informal Sector worker. No deductions from said fees shall be made by
the person who contracted the informal sector worker except those specifically authorized by
the latter. The expressed written consent of the informal sector worker shall first be secured
before any deduction is made.

For non-corporate construction workers, security in the workplace primarily refers to

the principle of First-Priority Hiring by the Municipal and City government for infrastructure
and construction activities and projects.

19



SEC. 40. Fees Rate. The Bureau of Working Conditions-DOLE shall develop and
implement capacity building program on the conduct of time and motion studies as a basis of
standardizing rates of fees. Likewise, the Regional Wage Boards shall do the same to
determine fees of workers of the informal sector micro-entrepreneurs.

SEC. 41. Access to Education and Training. An Informal Sector worker shall not be
deprived of formal or non-formal education during day-off or any other time mutually agreed
by the parties.

The Department of Education (DepEd) or Commission on Higher Education (CHED)
shall extend its services of Study-Now, Pay-Later Program to the Informal Sector worker and
his/her dependents.

Chapter IX
Security in the Workplace of Small Farmers

SEC. 42. Protection of Agricultural Lands. The Municipality/City in coordination
with the Department of Agrarian Reform shall protect all agricultural lands from conversion
or reclassification to non-agricultural uses. Special Economic Zones Sites, Tourist Sites or
Socialized Housing Sites shall not be allowed in irrigated and irrigable lands. The
Municipality/city shall include in their Comprehensive Land Use Plan (CLUP) all the
agricultural lands as protected zones

SEC. 43. Local Agriculture Support Services. The Municipality/City shall provide
capacity building training, access to collateral-free and gender-balanced credit, marketing
assistance and infrastructure development for small farmers and agrarian reform beneficiaries
within their jurisdiction, LGUs are mandated to establish a farmers market or a Bagsakan
where the local farmers can directly sell their products to the public.

SEC. 44. Protection for Tenants. The LGUs shall provide assistance and protection to
tenants in agricultural lands whose landowners are not following the provision in RA 3844.
There should be no eviction of tenants from the farm if the landowner unilaterally denies or
terminates the tenancy relationship. The LGUs shall make an inventory of all agricultural
lands under leasehold. LGUs shall enforce the security of tenure of tenants, right of
redemption and right of first refusal on the subject land.

SEC.45. Promotion of Sustainable Agriculture. LGUs shall encourage and provide
incentives to their constituents who want to engage or is engaging in sustainable and/or
organic farming. All idle private or public lands within their jurisdiction shall be cultivated
or planted with organic food crops like corn, root crops or vegetables.

Chapter X
Security in the Workplace of Marginalized Fisherfolks

SEC.46. Establishment of Fisherfolk Settlement Areas. LGUs in coordination with
NHA, shall establish and create fisherfolk settlement areas on private or public lands,
specifically near the fishing grounds, for municipal fisherfolk with security of tenure.


SEC.47. Preference to Marginalized Fisherfolk. The use of the municipal waters shall
be exclusive for marginalized fisherfolks. Marginalized fisherfolks shall be given priority in
the application of permits and licenses for the establishment of fish pens, fish corrals, fish
traps, shellfish culture or similar structure for culture of marine products within the municipal
waters. There should be no demolition of the abovementioned structures owned by
marginalized fisherfolk without providing advance notice and an alternative source of
income.

SEC. 48. Requirement for Establishment of Marine Protected Area. Consent from the
affected fisherfolks shall be required before an area be declared a marine protected area or a
fish sanctuary by the national or local government unit.

SEC. 49. Protection of Mangrove Forest. Conversion of any mangrove forest to
residential, commercial or industrial use shall be prohibited. LGUs must allocate their local
funds for mangrove reforestation.

SEC. 50. Regulation of Beach Fronts, LGUs shall ensure that no beach within their
jurisdiction is exclusive for the use of resort guests or private persons only. Beach fronts and
foreshores are public domain and may be accessed and used by any person especially
marginalized fisherfolks.

Title 1
INSTITUTIONAL MECHANISM

Chapter I
Special Allocations for Development Initiatives

SEC. 51. Special Allocations for Development Initiatives. The national government
shall allocate at least ten (10%) percent of its annual national budget to be appropriated
proportionately in accordance with the corresponding internal revenue allocation (IRA) of
respective local government units. The additional ten percent (10%) allocation is separate
from the annual and current IRA of LGUs.

The additional ten percent (10%) allocation shall be utilized by the LGUs for the
implementation of livelihood programs and other social services specifically for the informal
sector pursuant to the provisions of this Act. Priority shall be given to income generating
programs for the poorest of the poor. The program shall focus on the mobilization of the
informal sector with no assets to engage in self-employment and income generating activities.

SEC. 52. Sourcing and Adopting Development Initiatives. Other sources of funds to
be used exclusively for initiatives addressing the needs and empowerment of workers in the
informal sector shall be identified in the Implementing Rules and Regulations (IRR) of this
Act and may include the following:

(a) Government financial institutions and mechanisms such as the Land Bank of the
Philippines (LBP), Development Bank of the Philippines (DBP), National
Livelihood Support Fund (NLSF), Quedan Rural Credit and Guarantee
Corporation (QCGC) shall set aside a specific percentage of their loan portfolio to
informal sector enterprises and shall give priority to women-led informal sector
enterprises by providing loans at an interest of not more than twelve percent

21



(12%) per annum consistent with the spirit of Republic Act 7882. The
aforementioned government financial institutions shall formulate guidelines
within ninety (90) days trom the effectivity of this Act to facilitate the application
of informal sector business or enterprises of the aforesaid loan portfolio. The
guidelines shall provide simple procedure and requirements in the application of
informal sector business or enterprises in accordance with the framework and
principles of this Act.

(b) The Department of Social Welfare and Development (DSWD) shall strengthen its
Self-Employment Assistance Program (SEAP) to uplift and empower women in
poverty, particularly those in the informal economy, by adopting an integrated,
credit-plus approach to micro-finance.

(©) The Small Business Guarantee and Finance Corporation (SBGFC) created under
Republic Act (R.A.) No. 8289 shall assist in the sourcing and adopting of
development initiatives for competitive enterprises in terms of finance,
technology, production, management and business linkages. It shall also provide
and promote, develop and widen in both scope and service reach various
alternative modes of financing for informal economy business activities or
enterprises, including but not limited to: direct and indirect project lending,
venture capital, financial leasing, secondary mortgage and/or rediscounting of
loan papers to such business activities or enterprises, and crop production
financing. The Corporation shall guarantee loans obtained by the qualified worker
or business activity or enterprise, under such terms and conditions adopted by its
Board.

(A) The Department of Agriculture, through the Agricultural Credit Policy Council
(ACPC), created pursuant to Republic Act 7607, shall give subsidies for the
education and training of small farmers on credit awareness, loan acquisition and
loan repayment. Pursuant to aforesaid law, a portion of all loanable agricultural
funds shall be utilized for direct lending to small farmers for their production,
processing. post harvest and marketing requirements.

(e) The Department of Trade and Industry (DTI) shall contribute to enable the
development of business environment that shall include initiatives such as supply
chain and market outlets, and schemes to develop Special Credit Window/s to
upscale informal sector enterprises.

(The Department of Science and Technology (DOST) shall support technology-
related initiatives for workers in the informal economy.

SEC. 53. Eligibility for Government Assistance. To qualify for assistance, incentives
and grants, a worker or business activity or enterprise should be:

(a) duly registered with the appropriate agency in the LGU where they are actively
operating and has paid the necessary fees for registration and accreditation from
the office of the municipal or city treasurer concerned;

(b) one hundred percent (100%) owned and capitalized by Filipino citizens, be it

single proprietorship or a partnership venture; and

22


(c) fall under the above-mentioned sub-categories of Informal Sector;

SEC. 54, Exclusivity of Government Programs. The government shall ensure that
programs of financing, grants and other similar incentives shall be exclusively extended to an
accredited Informal Sector worker and business activity or enterprise.

SEC. 55. Entitlement of Government Procurements. The government shall work for a
mechanism to ensure that duly accredited Informal Sector worker or business activity or
enterprise is entitled to a share of at least ten percent (10%) of the total value of procurement
of goods and services supplied to the government, its bureaus, offices and agencies annually:
provided, that prices and quality of goods offered by the above-mentioned accredited
Informal Sector worker or business activity or enterprise are competitive,

SEC. 56. Coordination with LGUs. Pursuant to the provisions of Republic Act No.
7160, the local chief executives in coordination with Informal Sector representatives and
appropriate agencies shall formulate specific plans that will address the socio-economic
needs of the informal sector and incorporate them in their respective provincial, city and
municipal development plans.

NGOs whose primary ends are advocacy of issues or realizations of specific
developmental objectives for the informal sector workers shall be accredited as such by the
local sanggunian of the LGU where they operate. Such accreditation shall afford the
aforementioned NGO the right to participate in the election of non-government
organizations’ representative in the local development councils of the barangay, municipality,
city and province pursuant to Section 108 of Republic Act 7160.

The local development councils shall recognize workers in the informal sector as one
of the sectors that they may call or form as a sectoral committee to assist them in the
performance of their functions pursuant to Section 112 of Republic Act 7160.

SEC. 57. Tax Exemption. A duly registered Informal Sector worker or business
activity or enterprise shall be exempted from all taxes, national or local, including all
imposts, fees, licenses and permits (including building permits) except real property taxes and
capital gains from sale of real property (and shares of stocks), and duties and taxes on
importations.

Chapter II
Informal Sector Development Council

SEC. 58. Creation of an Informal Sector Development Council. There is hereby
created an Informal Sector Development Council (ISDC), herein otherwise referred to as the
Council, which shall be attached to the National Economic Development Authority (NEDA)
and shall be constituted within sixty (60) days after the approval of this Act.

The Council shall be the primary agency responsible for the promotion, growth and
development of the Informal Sector in the country by way of facilitating and coordinating
national efforts to promote the sector’s viability and growth, including the provisions of an
integrated program for skills enhancement, literacy and education, health services, social

23


welfare and services, assistance in the tapping of local as well as foreign funds, and other
functions relative to the attainment of the objectives and policy of this Act.

The Council shall be separate and distinct from the National Fisheries and Aquatic
Resources Management Council (NFARMC) created under Republic Act 8550.

SEC. 59. Composition. The Council shall be headed by the Director General of the
National Economic Development Authority (NEDA) as Chairperson, and elect from among
themselves a Vice-Chairperson to preside over the Council meetings in the absence of the
Chairperson. The members shall be the following:

Ex Officio members:

(a) Secretary of Department of Trade and Industry (DTI);

(b) Secretary of Department of Agriculture (DA):

(©) Secretary of Department of Labor and Employment (DOLE);

(A) Secretary of Department of Social Welfare and Development (DSWD);

(e) Secretary of the Department of Interior and Local Government (DILG);

(f) Secretary of Department of Science and Technology (DOST);

(g) Lead Convenor of the National Anti-Poverty Commission (NAPC);

(h) Director General of the Technical Education and Skills Development Authority
(TESDA);

(i) Director of the Bureau of Fisheries and Aquatic Resources (BFAR);

(j) Director General of National Statistics Office (NSO);

(k) Chairperson of the Social Security System (SSS);

() Chairperson of PhilHealth;

(m)Chairperson of the National Commission on the Role of Filipino Women
(NCRFW);

(n) Chairperson of the National Commission on Indigenous People (NCIP);

(0) Chairperson of the Philippine Commission on the Urban Poor (PCUP);

Regular members:

(p) Fifteen (15) representatives from People’s Organizations (POs) of workers in the
informal sector, five (5) each to represent Luzon, Visayas and Mindanao with
representation of the informal sector subgroups of vendors, small transport,
marginalized farmers, marginalized fisherfolks and home-based worker or non-
corporate construction workers to be elected in a National Assembly of informal
sector organizations duly called for that purpose; provided that at least fifty
percent (50%) of the fifteen (15) representatives are women;

(q) Six (6) representatives from non-government organizations (NGOs) working with
Informal Sector, two (2) each to represent Luzon, Visayas and Mindanao to be
appointed by the Chairperson from among those recommended by members of the
informal sector; provided that at least fifty percent (50%) of the six (6)
representatives are women; and

(0) One representative from the private sector at large who has a proven track record
in catering to the needs of the informal sectors and to be appointed by the
Chairperson from among those recommended by members of the informal sector.



An ex officio member of the council who possesses a cabinet rank shall designate an
undersecretary or assistant secretary as his/her permanent alternate representative in case
he/she fails to attend meetings in the exigency of his/her official function in the department.

The ex officio members of the council shall not have voting rights in any matter or
issue subjected to voting of the council as this is a right reserved only to regular members of
the council to ensure that decisions shall reflect the sentiments of the informal sector
themselves. However, the Chairperson or Vice-Chairperson, in the absence of the former,
shall have the right to vote in case of tie

‘The regular members of the council may conduct a meeting excluding the ex officio
members for purposes of voting on matters concerning the informal sector.

Elected representatives of the private sector, non-government organizations and
informal sector organizations shall serve as regular members of the council for a term of three
(3) years without re-election. In case of vacancy for whatever cause or reason, the
Chairperson shall appoint a representative to fill the vacancy from among those
recommended by members of the informal sector. Appointment to any vacancy shall be only
for the unexpired term of the predecessor. Appointment for the unexpired term shall not bar
the appointee from running during the next regular election

The representatives from the private sector, non-government organizations and
informal sector organizations’ shall be entitled to receive a per diem of two thousand pesos
(P2,000.00) per meeting exclusive of expenses for transportation and accommodation. The
Council shall meet once every two months or it may call for special meetings as the need may
arise; provided, that the frequency of such special meetings shall not exceed four (4) times
annually.

The NEDA shall allocate five million pesos (P5,000,000) out of its savings for the
initial operating expenses of the Council, after which the Council’s budget shall be included
in the department’s annual appropriation.

The initial election of representatives of the informal sector shall be conducted within
six (6) months from the effectivity of this Act. The implementing rules and regulations (IRR)
of this Act shall contain the guidelines for the formation of members of the council, the
election process, the nomination process, recall procedures and such other mechanisms to
ensure accountability of the representatives.

SEC. 60. Mandate of the Council. The Council shall have the following mandates:

(a) develop a system of registration and accreditation of members of the Informal
Sector, with attention to women workers, in accordance with the standards and
provisions of this Act;

(b) provide guidelines for the LGUs’ implementation of a fair and credible system of
evaluation, accreditation, review and assessment, merit promotion, rendering of
grant and incentive awards and other policies relative to the effective and efficient
implementation of this Act;

25



(c) further develop the existing Philippine Country Program for the development and
protection of the Informal Sector workers towards _ institutionalizing
comprehensive, rights-based, gender-responsive and child friendly programs and
policies for the Informal Sector. Towards this end, the Council must ensure
government capacity to undertake and implement this program for the Informal
Sector:

(a) develop rights and gender-based monitoring and evaluation mechanisms to ensure
that programs and policies are implemented effectively and efficiently; and ensure
gender-responsiveness of interventions toward hamessing full potentials of
women Informal Sector workers;

(e) coordinate with LGUs for the development and implementation of periodic
evaluation of all accredited Informal Sector workers, taking into account their
accomplishments, capabilities and potentials, the results of which shall be used as
bases for evaluation, registration, accreditation for the grant of awards and
incentives, training and retraining;

(f) monitor the income of the LGUs generated from the members of the informal
sector through the LGUs’ periodic report submitted to the Council;

(g) establish a performance appraisal system for all accredited Informal Sector
workers which shall be the basis for granting or renewal of incentives, rewards
and recognition, training and development, including adequate mechanisms to
ensure their active participation and involvement;

(h) ensure effective participation of the Informal Sector workers through the
establishment of regular consultations at the national, regional and provincial level
among the organizations of Informal Sector workers to determine specific issues
and problems affecting their sector and monitor/evaluate implementation of
programs and policies.

(i) establish and develop a centralized and sex-disaggregated database system to
effectively guide policy formulation relative to the Informal Sector workers. The
databank shall be available for public use and shall include but not be limited to
the following:

i.1, masterlist of workers in the informal sector classified according to geography
(urban or rural based), premises (home based or non home based), gender
(male, female), vulnerability (children, elderly or person with disability),
industry (industrial, commercial, services or agricultural), occupation
(fisherfolks, farmers, construction, drivers, vendors, laborers or sales
personnel), nature of employment (casual, contractual, seasonal,
permanent/regular or pakyaw/commission basis/boundary system) and
roles/functions  (own-account/self-employed or _subsistence/marginal
employment).

2. list of government and non-governmental organizations which provide
educational, socio-economic and legal services to the Informal Sector;

26


1,3. sex-disaggregated statistical profile of various Informal Sector workers based
on age, location, type of work, average monthly income, number of hours
worked, and other statistical information:

tistical data on informal enterprises, including capitalization and sources of

pital, number and status of workers, average income:

1.5. database of the needs and problems of the informal sector in general and
database of particular needs of women and children in the Informal Sector;
and

i.6. compilation of existing laws and programs affecting the interest and welfare
of the Informal Sector.

(i) develop and implement a communication plan including massive information
dissemination activities targeting Informal Sector workers in various regions
towards making them understand and appreciate the benefits this Act may bring
them;

(k) make necessary adjustment of the applicable amount of total asset value as
provided under Section 4 (d) after five (5) years from the enactment of this Act
and five (5) years thereafter, based on prevailing poverty threshold and other
established standards in determining subsistence level of living;

() formulate, implement, coordinate and monitor all non-financial government
programs, including fee-based services, to support and promote entrepreneurial
spirit among the poorest of the poor; and

(m)develop alternative conflict or dispute resolution systems and mechanisms, which
shall aim to promote dialogue, conciliation and mediation while protecting the
rights of Informal Sector workers.

SEC. 61. Authority of the Council to Solicit Assistance form Various Agencies. The
Council may, from time to time, call upon the participation of any government agency or
bureaucracy in its deliberations especially when such agency is directly or indirectly
concerned with and/or affecting the growth and development of the Informal Sector in any
manner.

SEC. 62. Council Secretariat. The Council, through the Chairperson, shall designate,
in his capacity as the Director of the NEDA, any division or bureau within the NEDA to act
as the Council Secretariat and shall have the following duties and functions:

(a) to prepare in coordination with LGUs and other local government agencies, and
recommend annual as well as medium-term Informal Sector Enterprise
Development Plans for the approval of the Council;

(b) to coordinate the preparation of position papers and background materials for
discussion or approval during Council meetings:

(©) to assist the Council in coordinating and monitoring the policies, programs and

activities of all government agencies with respect to the implementation of this
Act;

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(A) to prepare, collate, integrate all inputs to the Council’s yearly report on the status
of the Informal Sector business activities or enterprises in the country;

(€) to submit periodic reports to the Council on the progress and accomplishment of
its work programs; and

(8) to perform ad hoc functions as authorized by the Council.

SEC. 63. Rationalization of Programs. The Council shall conduct continuing review
of government programs for the poorest of the poor and the Informal Sector and submit to
Congress and the President a report thereon together with its policy recommendations.

Chapter IIL
Informal Sector Local Development Office

SEC. 64. Informal Sector Local Development Office. The Informal Sector Local
Development Office (ISLDO) shall be established in every province, municipality and city to
enhance the Informal Sector access to assistance and support.

For this purpose, the DTI, Technical Education and Skills Development Authority
(TESDA) and Technology and Livelihood and Resource Center (TLRC) shall develop
livelihood programs that will harness the skills of the Informal Sector workers.

The aforesaid agencies shall conduct human resource development program and
management in the following areas:

(a) adequate facilities and resources to render quality social servi

(b) opportunities for Informal Sector workers to grow and develop their potentials and
experience a sense of worth and dignity in their work;

(c) mechanisms for democratic consultations;

(@) upgrading of working conditions; and

(e) allocation of funds for the participation of Informal Sector workers in skills
taining and workshops and other similar activities as part of their continuing

advancement.

SEC. 65. Functions of Informal Sector Local Development Office. The Informal
Sector Local Development Office shall have the following functions:

(a) prepare an over-all development plan and work program that will address the
needs, rights and capacities of the Informal Sector workers and incorporate them
in their respective provincial, municipal and city development plans;

(b) in consultation with organizations of Informal Sector workers in the area, identify
specific needs of the sector and recommend appropriate measures to be taken;

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(c) ensure registration and accreditation of the Informal Sector workers, especially
women;

(d) monitor, assess and evaluate implementation of the plans and programs as well as
the performance of the sector in the areas;

(©) coordinate with other local offices, private sector and other organizations with
existing programs for the Informal Sector workers for integration and
convergence:

(f) conduct training programs which will provide new ideas to the Informal Sector
workers and upgrade the technical and entrepreneurial skills of others who are
already in the field;

(g) implement consciousness-raising and capability building activities to include
information on workers’, women's and children’s rights and leadership training;

(h) provide technical support and access to credit, market, technology, social security
schemes, and training for micro-entrepreneurs, small transport, small farmers,
marginalized fisherfolks, non-corporate construction workers and other skilled
workers;

(i) tain pools of community trainers in business counselling and awareness-raising
on occupational safety and health hazards, risks and social security;

(i) support organizing activities among Informal Sector workers;

(k) establish databanks on human resources and skills registry to be used as tools for
LGU planning and budgeting;

(1) provide offices and other necessary resources to support organizing, advocacy,
training and other activities of local organizations of Informal Sector workers;

(m)train Informal Sector workers on negotiation skills and on the conduct of time and
motion studies to determine proper wages; and

(n) provide services, to include but not limited to counselling and legal assistance for
the furtherance of this Act,

(0) ensure that the LGU is capacitated to undertake and implement rights-based and
gender-responsive programs for the Informal Sector.

The Local Government Units shall annually allocate at least two hundred fifty

thousand pesos ( P250,000.00) or at least five percent (5%) of the twenty percent (20%)
Development Fund of their Internal Revenue Allotment or whichever is higher for the
operations and maintenance of the ISLDO.

The LGUs shall submit to the ISDC the annual report of disbursement of the fund

allocations for Informal Sector as specified in this section and section 40 paragraph (g) of this

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Act. In case of failure on the part of the LGU to submit the annual report to the ISDC, the
local chief executive and other officers of the LGU shall be held administratively liable.

SEC. 66. Composition. The local chief executives shall act as the primary overseers
to the overall operations of ISLDO, while Informal Sector workers shalll be represented by at
least five (5) representatives from POs of IS workers; provided that each sub-group (vendor,
small transport, small farmers, marginalized fishersfolks and home-based workers/ non.
corporate construction workers) shall have one (1) representative each in the ISLDO,
whenever applicable. However, in case of highly urbanized cities, there shall be ten (10)
representatives of informal sector in the ISLDO, with two (2) representatives coming from
each sub-group.

The representatives shall be elected in a general assembly of each sub-group duly
called for the purpose of election of a representative/s to the ISLDO. The elected
representatives shall serve as such for a term of three (3) years without re-election. In case of
vacancy for whatever cause or reason, the local chief executive shall appoint a representative
to fill the vacancy from among those recommended by members of the informal sector.
Appointment to any vacancy shall be only for the unexpired term of the predecessor.

Chapter IV
Informal Sector Comprehensive and Integrated Plan
And Inter-Agency Networking

SEC. 67. Comprehensive Plan. The Informal Sector Development Council or ISDC
shall be tasked to formulate a Ten-Year Comprehensive and Integrated Plan on the impact of
globalization to the informal sector. It shall determine and recommend the necessary safety
nets needed by the informal sector to prepare them for the possible effects of globalization.

SEC. 68. Inter-Agency Networking. The NEDA shall provide for and lead the inter-
agency networking system among the different departments and instrumentalities of
government, should the same be required in the continuing efforts to protect the interests,
rights and privileges of Informal Sector workers.

The Council in cooperation with the DepEd and CHED, shall design a comprehensive
and integrated program for Informal Sector workers to give them opportunity to pursue free
education.

The cooperatives, through the help of the Department of Trade and Industry (DTI),
TESDA and TLRC shall inform Informal Sector workers of opportunities for market and
technology access and the availability of livelihood training seminars to respond to Informal
Sector needs and potentials.

The DSWD shall, within a period of one (1) year from the date of effectivity of this
Act, institute a program designed specifically to provide emergency services specifically to
women and the minor Informal Sector worker who are in need of custody, shelter,
counseling, or medical, psychological, legal and rehabilitative services.

The DSWD shall, upon the recommendation of the DOLE, effect the repatriation of

minor-aged Informal Sector workers who voluntarily seek government protection against
abuse and exploitation or upon report or discovery of the same. The cost of such repatriation

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SEC. 71. Establishment of a Shared Government Information System for Informal
Sector. An inter-agency committee, composed of the Department of Agriculture (DA),
Department of Interior and Local Government (DILG), the Department of Labor and
Employment DOLE), the National Statistics Office (NSO), the Informal Sector Development
Council, the Informal Sector Local Development Office, shall be established to implement a
shared government information system for the informal sector. The inter-agency committee
shall initially make available to itself the information contained in existing data bases/files.
The second phase shall involve linkaging of computer facilities in order to allow free flow of
data exchanges and sharing among concerned agencies.

Title IV
MISCELLANEOUS AND FINAL PROVISIONS

SEC. 72. Violation of Prohibited Acts. Any person who commits the prohibited acts
mentioned in Sections 18, 19, 2 3 and 24 shall be punished by a fine of two hundred
thousand (P 200,000) pesos or by imprisonment for six (6) years, or both in the discretion of
the court.

Violations of the prohibited act mentioned in Section 20 shall be punished pursuant to
Republic Act 9208.

SEC. 73. Implementing Rules and Regulations. The departments and agencies charged
with carrying out the provisions of this Act shall, within ninety (90) days after the effectivity
of this Act, formulate the necessary rules and regulations for its effective implementation.

SEC. 74. Repealing clause. All laws, decrees, executive orders, rules and regulations,
or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 75. Separability of provisions. If, for any reason, any section or provision of
this Act is held unconstitutional or invalid, the other sections or provisions hereof shall not be
affected thereby.

SEC. 76. Effectivity Clause. ~ This Act shall take effect after fifteen (15) days from
its publication in the Official Gazette or in at least two (2) national newspapers of general
circulation whichever comes earlier.

Approved,