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TITLE:  PHILIPPINES ECONOMIC POLICY AND TRADE PRACTICES
DATE:  FEBRUARY 1994
AUTHOR:  U.S. DEPARTMENT OF STATE

                         THE PHILIPPINES

                     Key Economic Indicators
            (Billions of Pesos unless otherwise noted)

                                  1991      1992      1993 /1
Income, Production
 and Employment /2

Real GDP (1985 prices)              712       713       721
Real GDP Growth (percent)          -0.7       0.1       1.2
GDP (at current prices)           1,245     1,343     1,465
By Sector:
  Agriculture                       261       290       321
  Energy and Water                   29        33        36
  Manufacturing                     316       328       350
  Construction                       62        69        76
  Ownership of Dwellings/
   Real Estate                       73        86        94
  Financial Services                 49        53        58
  Other Services (priv. and gov.)   437       468       512
    Government Services              90        92       100
    Health and Educ. (private)       34        30        33
Net Exports of
 Goods and Services                 -18       -62      -100
Real Per Capita GNP ($U.S.) /3    730         n/a       n/a
Labor Force (000's)               25,631    26,290    26,990
Unemployment Rate (percent)        10.6       9.8       9.0


Money and Prices
 (annual percentage growth)

Money Supply (M2) /4               15.7      11.0      11.3
Ave. Loan Rate /5 /6               23.5      19.4      15.0
Ave. Saving Rate /5 /6             11.0      10.6       8.1
Retail Price Index
 (Metro Manila) /4                 18.8       5.1       2.1
Wholesale Price Index
 (Metro Manila) /4                 13.5       4.5      -1.3
Phil. Consumer Price Index /5      18.7       8.9       7.8
Exchange Rate (Pesos per $) /5 /6
  Official (interbank rate)       27.48     25.51     27.35
  Parallel ($ buying rate)        27.71     25.40     27.40


Balance of Payments and Trade
 (millions of U.S. dollars)

Merchandise Exports (FOB)/4        8,839     9,824    10,900
  Exports to U.S. (U.S. data)      3,472     4,358     4,740
Merchandise Imports (FOB) /4      12,052    14,520    17,000
  Imports from U.S. (U.S. data)    2,265     2,753     3,230
Bilateral Aid, U.S. /4               375       417       305
Bilateral Aid, Other Countries       968     1,339     1,800
External Public Debt /3           24,116    24,511    27,215
Debt Service Payments              2,992     3,113     3,750
Gold and FOREX Reserves /5         4,470     5,218     4,500
Trade Balance /4                  -3,213    -4,695    -6,100
  Balance with U.S.                1,207     1,605     1,510


Notes:

1/  For 1993, figures are full-year estimates based on partial
    data available as of October 1991.
2/  For 1993, figures estimated from six-month data.
3/  IBRD estimate.
4/  For 1993, Figures estimated from seven-month data.
5/  For 1993, figures estimated from nine-month data.
6/  Figures are actual rates, not changes in them.  Source:
    National Economic and Development Authority, Bangko
    Sentral ng Pilipinas, Department of Finance, EA/P Trade
    cable.


1.  General Policy Framework

    Assuming office in mid-1992, President Fidel Ramos pledged
that the Philippines would achieve Newly Industrialized Country
status by the year 2000, based on an open and competitive
economy.  In the first year of his administration he
successfully concentrated on establishing political stability,
a prerequisite to economic reform.  Economic takeoff, however,
remains elusive, as implementation of the necessary policy and
legislative changes has been slow.

    After two years of stagnation, real growth resumed in 1993,
although at rates lower than the government initially
expected.  A large and growing fiscal deficit has severely
inhibited the government's ability to stimulate the economy or
to introduce programs to deal with deteriorating
infrastructure.  The Philippine government borrows heavily from
the domestic market to finance its fiscal gap and, in recent
years, domestic debt servicing has eaten up a larger share of
the budget pie than has servicing of foreign debt.  Short-term
maturities make up the bulk of the government's domestic
obligations, which officials are working to address in order to
ease cash flow difficulties.  Year-to-year inflation, which has
been in single digits since February 1992, is being monitored
closely by the government.  In mid 1993, the peso began to
depreciate, at least in part due to speculative pressures.  The
Philippines will continue to run a sizable overall trade
deficit, but enjoys a surplus in bilateral U.S.- Philippine
trade.

    The major tools for regulating monetary aggregates are
reserve requirements and open market operations.  However,
mounting financial losses have hampered the Central Bank's
ability to conduct open market operations effectively.  As a
result, the reserve requirement imposed on the banking sector's
deposit liabilities (currently 22 percent) remains high.  As
one element of its economic reform program, the government has
replaced the old Central Bank with a new entity, the Bangko
Sentral ng Pilipinas (BSP).  To date, however, final decisions
have not been made on the degree of independence to be enjoyed
by the BSP or on the total of old Central Bank liabilities
which it will assume.  Decisions on both of these issues are
central to an IMF agreement.

    The most visible constraint on overall economic growth is
the continuing shortage of electric power.  Despite attempts by
industry to schedule demand, "brown-outs" (simple cutoffs of
electricity to entire regions of the city or country) have 
occurred on virtually every work day of 1993.  The duration of
the brown-outs, which peaked at eight hours per day during the
hot season, had decreased by the fall of 1993, in part as a
result of cooler weather, but also as a "fast track" program
for new generating facilities began to show results.  However,
the new plants are generally either gas turbine or diesel,
better suited to meet "peak" rather than "base" load
requirements.  More new plants and rehabilitation efforts
should help to stabilize the power situation by mid-1994, but
full resolution remains at least two to three years away. 
Inadequate infrastructure is also a constraint on growth, e.g.
deficiencies in the telecommunications and transportation
networks.


2.  Exchange Rate Policy

    Historically, the Philippines has resisted significant
depreciation of the peso because of concern with inflation,
debt service costs on the country's more than $30 billion
foreign debt stock, and the import-dependent nature of major
export products.  The exchange rate is determined through what
is essentially a "managed float," with monetary authorities
acting through a combination of interest rate adjustments and
direct intervention.

    In 1992, the government liberalized and simplified exchange
rules for trade and non-trade transactions allowing immediate
repatriation and remittance without prior approval by the
Bangko Sentral.  Foreign exchange earners are now generally
free to buy and sell foreign exchange, maintain foreign
currency accounts and transfer foreign exchange out of the
country for deposit or investment abroad.  Off-floor
computerized interbank forex trading was introduced at the same
time.  The BSP continues to impose ceilings on individual
banks' foreign exchange positions, requiring excess forex
holdings to be sold to the BSP or to other commercial banks. 
Restrictions on foreign investments and foreign borrowings also
remain.


3.  Structural Policies

    In recent years, trade policy changes have begun to open
the relatively closed Philippine economy, reversing 40 years of
import-substitution approaches.  Since 1986, the list of items
subject to quantitative restrictions and/or pre-clearance has
shrunk considerably.  The major exception to this
liberalization is in the agricultural sector where products  
which account for 70 percent of production (by value) are
protected from import competition.  The government is also
attempting to rationalize and simplify the tariff structure. 
(See Section 5.)

    The foreign investment law which took effect in November
1991 allows full foreign ownership of companies engaged in
activities not covered by investment incentives.  A "negative
list" of sectors reserved for Philippine companies remains.

    In June 1993, President Ramos signed legislation extending
the period foreign investors are allowed to lease land from 50
to 75 years.


4.  Debt Management Policies

    Like its predecessor, the Ramos Administration has
maintained a firm commitment to servicing the country's foreign
obligations, despite Congressional and other political rhetoric
supporting debt repudiation and/or debt service caps.  Since
1986, the government has sought debt service relief through
rescheduling accords (four thus far with Paris Club creditors),
various debt reduction schemes such as buy-backs and
debt-to-equity swaps, and a gradual shift towards longer-term
and more concessional sources of financing.

    In 1989 and 1990, monetary and fiscal policy slippages
exacerbated by a spate of natural calamities, several attempted
coups and the Gulf crisis, threatened macroeconomic stability. 
In 1991, the government focused on a two-year economic
stabilization program, supported by an International Monetary
Fund (IMF) standby arrangement.  The IMF program paved the way
for the fourth debt rescheduling accord with official bilateral
creditors.  Between 1990 and 1992, the government focused on
its foreign commercial obligations.  It consummated two debt
buy-back deals with foreign creditor banks totaling $2.5
billion of face value debt.  In December 1992, the government
and foreign commercial creditors also implemented a
comprehensive debt relief package, which paved the way for the
Philippines' reentry into the voluntary capital market after
nearly a decade's absence.

    The country's foreign debt ballooned from $2.3 billion in
1970 to $26.2 billion in 1985, a compounded growth rate of 19
percent yearly.  Since 1985, the pace of increase has slowed
markedly, but the total foreign debt level reached $30.9
billion at the end of 1992.  Initiatives pursued since the
mid-1980s have reduced the ratio of debt service payments to
export receipts from a 1982 high of 38 percent to under 20
percent in 1992.  As a percentage of gross national product
(GNP), the foreign debt fell from a peak of 96 percent in 1986
to 56 percent in 1992.

    Both Paris Club and IMF arrangements ended in March 1993,
with the Philippines generally in compliance with IMF
performance targets.  However, a new IMF agreement is being
delayed by disagreement over the Philippines' medium-term
macroeconomic program and concern over the government's
inability to collect sufficient revenue.  The absence of a new
IMF agreement has delayed negotiation of a fifth Paris Club
debt rescheduling accord, requiring full payment of maturing
Paris Club obligations since April 1993.  Foreign assistance
donors have also held off making new pledges, pending a new IMF
arrangement.  Discussions with the IMF resumed in January, 1994.

5.  Significant Barriers to U.S. Exports

    Tariffs and Other Import Charges:  Under a 1981 World Bank
Structural Adjustment Program, the government initiated a trade
liberalization program incorporating tariff reductions.  As a
result, the average nominal tariff fell from 42 percent in 1979
to 28 percent in 1991.  On July 20, 1991, Executive Order 470
implemented a further tariff reduction, restructuring, and
simplification program to be completed by 1995.  The third
phase of this program implemented on July 1, 1993, as
scheduled, lowered the nominal average tariff to 23.51
percent.  When fully implemented, the new structure will have
compressed the previous seven-tier tariff structure to four
tiers of three, ten, 20, and 30 percent and an average nominal
tariff of 20 percent.

    About 208 products are exempt from the basic framework of
E.O. 470 and remain subject to 50 percent tariff.  While
representing only 3.74 percent of tariff lines, included are
rice, coconut oil, sugar, fruits, and luxury consumer goods
such as liquor, tobacco, candy, and leather goods.

    For U.S. agricultural exports to the Philippines, the most
serious trade impediment is the continued exclusion of any
imports of some major commodities, currently through the "Magna
Carta of Small Farmers."  This Act states "importation shall
not be allowed on agricultural products that are produced
locally in sufficient quantity."  Certified under this
provision were corn and its substitutes for feed, poultry and
poultry products, hogs and pork products, and meat and meat
products except beef and beef products.  In another action, the
tariff on high-grade boneless beef was raised to 60 percent
effective August 1992.

    Import Licenses:  Between 1981 and October 1992, licensing
requirements were lifted on about 2,770 items representing
nearly 96 percent of the 2,900 products identified for
liberalization over a twelve-year period.  In the first ten
months of 1992, the importation of about 280 items was
deregulated, including (but not limited to) fish and fish
preparations, raw sugar, corn, most meat and meat products,
farm commodities, household appliances, and new buses and vans
for the transport of goods.  However, actions under the "Magna
Carta" nullified the impact on farm commodities such as corn,
poultry and swine and their products.

    Commercial vehicles and parts, covered by the Board of
Investments' (BOI) progressive industrial development program,
still require a BOI "authority to import".  Over 100 products
will continue to be excluded for reasons of health, safety or
national security.

    Under the government's import liberalization program (ILP),
prior clearance is no longer needed to open letters of credit
for most imports.  However, clearance requirements for certain
restricted or controlled items still apply.  Commodity imports
financed through foreign credits still require prior approval
from the Bangko Sentral.  The Philippines is a signatory to the
GATT Import Licensing Code.

    Services Barriers - Banking:  Four foreign banks,
established in the Philippines prior to 1948, have been allowed
to continue to operate.  As of June 1993, they controlled
approximately 11 percent of total commercial bank assets. 
Additional foreign bank branches have been denied entry since
1948.  Foreign participation in existing domestic banks is
currently limited to 30 percent (40 percent with Presidential
approval) of voting stock.  However, pending legislation, which
is highly controversial, would liberalize foreign participation
in the sector by allowing the entry of additional foreign bank
branches, the expansion of existing foreign banks, and an
increase in the maximum level of foreign participation in
domestic banks.  Foreign banks may not obtain a "universal
banking" license, which would allow investment banking
activities.

    Insurance:  The government opened the life and non-life 
insurance sectors to new entrants in March 1992.  To qualify,
prospective entrants must be domestically incorporated and be
no more than 40 percent foreign-owned.  The entry of foreign
firms (defined in the Philippine Insurance code as companies
organized under laws other than the Philippines') remains
suspended.

    Securities:  Membership in the Philippine Stock Exchange
(formed by the merger of the Makati and Manila Stock Exchanges)
is open to any company (foreign or domestic) incorporated in
the Philippines.  A foreign investor who wishes to purchase
shares of stock of a domestic corporation is limited by
national ownership requirements under the Philippine
Constitution.

    Legal Services:  Philippine citizenship, graduation from a
Philippine Law School, and membership in the Integrated Bar of
the Philippines are required to practice law.

    Motion Pictures:  More vigorous campaigns by concerned
government agencies (e.g. the Videogram Regulatory Board and
the National Bureau of Investigation) have reduced the
unauthorized commercial sale of copies of foreign-made films,
but excessive taxation and widespread piracy remain problems.

    Standards, Testing, Labelling and Certification:  The
"Generic Act" of 1988 is fully in force.  Department of Health
(DOH) implementing regulations call for the generic name of
most drugs to appear above the brand name, in a slightly larger
typeface, and enclosed in a box, with contrasting backing.  The
guidelines also require DOH approval for all new labels. 
Labelling changes caused by the generics legislation imposed
substantial one-time costs on all pharmaceutical firms which
were disproportionately borne by foreign-owned firms.  The
Philippines is a signatory to the GATT Standards Code.

    Investment Barriers:  The Philippine government has taken
important steps in recent years to welcome foreign investment
via foreign exchange liberalization and more liberal foreign 
ownership regulations for enterprises not registered for
incentives with the Board of Investment (See Section 3). 
However, the Constitution and specific laws continue to
prohibit foreign ownership in a number of industries and limit
it in others.  Further, only enterprises with at least 60 
percent Filipino equity may own land.  The exploration,
development and utilization of natural resources must be
undertaken through production sharing or similar arrangements
with the Philippine government;  As a general rule (oil
exploration is an exception), entities seeking to engage in
such activities must be at least 60-percent Filipino-owned.

    Under the Omnibus Investment Code of 1987, the Philippine
government, through the Board of Investment (BOI), offers
incentives to registered investors in preferred pioneer or
non-pioneer  activities.  In general, to qualify for
registration, the enterprise must be no more than 40-percent
foreign-owned, unless the proposed activity is classified as
pioneer, or at least 70 percent of production is for export, or
the enterprise locates in areas classified by the government as
less developed.  However, the enterprise must agree to divest
to a maximum of 40 percent foreign ownership within 30 years
from registration with the BOI.  Exempted from the divestment
requirement are enterprises which export 100 percent of
production.  Incentives are also granted and more than
40-percent foreign ownership allowed for firms which operate in
any of the four government-run export processing zones (in
which case 100 percent of production should be for export). 

    As a general policy, the Department of Labor allows the
employment of foreigners, provided there are no qualified
Philippine nationals for the position.  However, the employer
must train Filipino replacements and report on such training
periodically.  For BOI-registered firms, foreign nationals may
retain the positions of President, Treasurer and General
Manager (or their equivalents) when a company is foreign-owned.

    Foreign partnerships and corporations (i.e., enterprises
more than 40-percent foreign-owned) may engage in peso
borrowings, but are subject to certain debt-to-equity ratios
which must be maintained for the term of the debt.  Firms
engaged in government-promoted activities (i.e. which receive
incentives), are subject to a 60:40 ratio.  Other manufacturing
firms must not exceed a 55:45 ratio.  The maximum
debt-to-equity ratio allowed non-manufacturing firms is 50:50.

    The Philippines does not provide guarantees against losses
due to non-convertibility of currency or damage caused by war. 
However, a full U.S. Overseas Private Investment Corporation
(OPIC) agreement is in effect, and U.S. investors may contract
that agency for coverage.

    Government Procurement Practices:  Philippine government
procurement policies generally do not discriminate against
foreign bidders.  However, if comparable in quality, price, and
delivery terms, preferential treatment is to be given to
locally-manufactured iron and steel products in government
projects.  Preferential treatment is given to Filipino firms in
the purchase of medicines, and government offices which grant a
rice allowance to their employees must purchase the rice from a
specified Filipino source.  Philippine government agencies must
procure their petroleum products from government-owned sources.

    Pre-qualification for bids on infrastructure projects
requires the domestic corporation to be at least 75 percent
Filipino-owned.  Areas of interest to U.S. suppliers, including
power generation equipment, communications equipment, and
computer hardware, are not affected by significant
restrictions.  The Philippines is not a signatory to the GATT
Government Procurement Code.

    Customs Procedures:  The Bureau of Customs continues to
utilize Home Consumption Value (HCV) as the basis for customs
valuation, despite persistent requests from the Philippines'
trading partners that this system be abandoned.  Legislation is
pending before the Congress to replace the HCV system, but it
is doubtful that a change will be implemented before late 1994,
at best.

    One element of the import liberalization program is a
requirement that all shipments valued at over $500 be inspected
prior to shipment, to prevent misdeclaration of goods and
tariff evasion.  The Philippines is not a signatory to the GATT
Customs Valuation Code.


6.  Export Subsidies Policies

    Enterprises which register with the BOI to obtain
incentives are entitled to tax and duty exemptions under the
Philippine Omnibus and Investment Code of 1987.  These include
income tax holidays, tax and duty exemptions for imported
capital equipment, as well as tax credits for purchases of
domestically-sourced capital equipment and raw materials. 
Export traders are entitled to tax credits for imported raw
materials required for packaging.

    Exporters may avail themselves of foreign currency deposit
unit (FCDU) loans from local commercial banks up to 100 percent
of the letter of credit, purchase order or sales contract
without prior BSP approval.  The BSP will loan to exporters
against commercial paper at less than treasury bill rates. 
Export financing is available to all Philippine exporters and
there is no preferential rate for domestic companies.  The
Philippines is a signatory to the GATT Subsidies Code.

    An Export-Import Banking Program of the Development Bank of
the Philippines was launched on May 17, 1993 primarily to
address the needs of the exporting community.  Export-oriented
activities that are labor-intensive and which will utilize
local raw materials may benefit from this program which has an
initial capital of one billion pesos ($37 million based on
average May 1993 exchange rate).


7.  Protection of U.S. Intellectual Property

    The Philippines was moved from the U.S. Trade
Representative's special 301 "priority watch list" to the
"watch list" following a bilateral IPR agreement signed in
April 1993 by the two governments.  The agreement commits the
Philippine Government to strengthen significantly protection of
intellectual property rights (IPR).

    In February 1993, President Ramos created the Inter-agency
Committee on Intellectual Property Rights as the body charged
with recommending and coordinating enforcement oversight and 
program implementation.  The Philippine Government is a party
to the Paris Convention for the Protection of Industrial
Property, the Patent Cooperation Treaty, the Bern Convention
for the Protection of Literary and Artistic Works, and is a
member of the World Intellectual Property Organization. 
However, the lack of adequate and effective protection for IPR
remains a bilateral trade concern.  Current jail sentences and
fines imposed for infringement and counterfeiting are not real
deterrents.  Insufficient funding, due to budget constraints,
hampers the effective operation of agencies tasked with IPR
enforcement.  Joint government-private sector efforts have
improved administrative enforcement; but when IPR owners must
use the courts, enforcement is slower and less certain.

    Patents:  The main problem with the present law is a
possibility of compulsory licensing two years after
registration with the Patent, Trademark and Technology Transfer
Board, if the patented item is not being utilized in the
Philippines on a commercial scale or if domestic demand for the
item is not being met to an "adequate extent and on reasonable
terms".  Compulsory licensing is even easier for pharmaceutical
and food products, where lack of use, inadequate production for
domestic demand, etc. need not be established.  In the
bilateral IPR agreement of April 1993, the government committed
to submit to the Philippine Congress an amendment which will
allow importation to satisfy working requirements for patented
goods.  Starting March 15, 1993, rules on royalty payments were
relaxed somewhat, granting automatic approval for royalty
agreements not exceeding five percent of net sales.  Royalty
rates higher than five percent may be allowed in meritorious
cases.  Naturally occurring substances (plants or cells, for
example) are not patentable.

    Trademarks:  Trademark counterfeiting is widespread and
remains the most serious violation of intellectual property
rights in the Philippines.  Many well-known international
trademarks are copied, including denim jeans, designer shirts,
and personal beauty and health care products.  Under the terms
of the U.S.- Philippine IPR agreement, the government will seek
amendments to the Philippine trademark law to provide
protection for internationally well-known marks.

    Philippine law requires trademark owners to file an
affidavit of use or justified non-use with the Patents,
Trademark and Technology Transfer Board every five years to
avoid cancellation of trademark registration.  Non-use of a
mark must be for reasons totally beyond the control of a
registrant.  (Import bans, for example, constitute justified
non-use.)  Current practice provides that internationally
well-known marks should not be denied protection because of
non-registration or lack of use in the Philippines.  Pending
legislation seeks to incorporate this practice into Philippine
law.  Trademark protection is limited to the manufacturing or
marketing of the specific class of goods applied for, and to
products with a logical linkage to the protected mark.

    Copyrights:  Philippine law is overly broad in allowing the
reproduction, adaptation or translation of published works
without the authorization of the copyright owner.  A
presidential decree permits educational authorities to
authorize the reprint of textbooks or other reference materials
without the permission of the foreign copyright holder, if the
material is certified by a school registrar as required by the
curriculum and the foreign list price converts to 250 pesos or
above.  This decree, especially for textbooks, is inconsistent
with the appendix of the 1971 text of the Bern Convention. 
However, the Philippine Government is expected, under the terms
of the bilateral IPR agreement reached in April 1993, to
correct these deficiencies through accession to the Paris Act
of the Bern Convention and through amendments to its domestic
legislation.

    Video piracy is a serious problem, but the Motion Picture
Export Association of America reports continuing cooperation
with the government's Videogram Regulatory Board (VRB). 
Copyright protection for sound recordings, currently set for 30
years, is shorter than the internationally accepted norm of 50
years.  The government, however, has committed to submitting
amendments to the Philippine Congress to bring the term of
copyright protection into conformity with international norms. 
Computer software is widely pirated, prompting software owners
to organize in order to protect their rights in the Philippines.

    New Technologies:  Many shops rent video laser discs
purchased at retail stores in the United States without payment
of commercial rental fees to the producers.  More recent issues
involve copyright infringement complaints against cable
television stations which re-transmit copyrighted works without
authorization from or payment to the copyright owners.  The
bilateral IPR agreement of April 1993 commits the government to
a number of actions designed to fully enforce the protections
afforded to audio-visual works under Philippine laws and
regulations.


8.  Worker Rights

    a.   Right of Association

    The right of workers, including public employees, to join
trade unions is assured by the Constitution and legislation. 
This right is freely practiced without government
interference.  About ten percent of the nation's employed work
force (approximately 24 million) is organized into 5,757 trade
unions.

    Industrial peace continued to improve during the first nine
months of 1993, with the number of strikes declining, compared
to 1992.  Work stoppages were highest in March (15 strikes) and
lowest in July (five strikes).  The manufacturing sector
experienced the majority of work stoppages, with 64 percent of
the strikes involving 25,446 workers.

    Most strikes (74 percent) resulted from disputes over
unfair labor practices; the remaining labor disputes (26
percent) involved a breakdown in collective bargaining.

    b.   Right to Organize and Bargain Collectively

    Labor's right to organize and bargain collectively is
provided for by law.  These rights were expanded and
strengthened by the passage of the Labor Law Reform Act of 1989
(the Herrera Bill), which balances the need for greater
stability in labor relations with full respect for worker
rights.  Since 1991, the number of collective bargaining
agreements in force has increased from 4,409 to 4,785.  Labor
legislation is applied uniformly throughout the country,
including in the export processing zones.

    c.   Prohibition of Forced or Compulsory Labor

    The government prohibits forced labor, and there are no
reports of it being practiced.

    d.   Minimum Age for Employment of Children

    The Labor Code of the Philippines prohibits employment of
children below age 15, except under the sole responsibility of
parents or guardians and then only if the work does not
interfere with schooling.  However, legislation enacted in
1992, with the intent of providing greater protection to
children, apparently inadvertently allowed wider employment of
children.  The new law stipulates that children below 15 years
may be employed, in any establishment, provided the employer
shall a) secure for the child a work permit from the Department
of Labor and Employment; b) ensure the protection, health and
safety, and morals of the child; c) institute measures to
prevent exploitation or discrimination, taking into account the
system and level of remuneration, and the duration and
arrangement of working time; and d) formulate and implement a
continuous program for training and skill acquisition for the
child.

    The implementation of this law would put the Philippines
out of conformity with Convention 59 of the International Labor
Organization.  However, implementation has been delayed and an
amendment to the legislation is now pending.  The proposed
amendment will incorporate the above stipulations on child
labor, but will restrict the employment of children to
operations run by their families or to participation in public
entertainment.

    e.   Acceptable Conditions of Work

    The official minimum wage in the Manila region is $4.06 per
day (118 pesos at 29 pesos per $).  Outside Manila, the minimum
wage varies in each of the 12 government regions, ranging from
$2.15 to $3.79 per day.  For agricultural workers on
plantations, the minimum daily wage ranges from $2.30 to $2.61,
depending on the size of the agricultural establishment;  $2.29
is the minimum for non-plantation agricultural workers. 
Despite the minimum wage laws, substantial numbers of workers
(mostly laborers, janitors, messengers, drivers, and
clerk-typists) earn less than the law stipulates.

    The Congress is currently considering various proposals for
increasing the minimum daily wage.  The range of proposed
increases is from 25 to 35 pesos per day in the private sector
and up to a doubling of wages for government workers.

    The standard work week is 48 hours.  The law mandates a
full day of rest per week.  Employees with more than one year
on the job are entitled to five days of paid leave.  A
comprehensive set of enforceable occupational safety and health
standards is in effect, and the standards for protecting
workers against hazards of the work place and harmful
substances are relatively advanced.



         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (Millions of U.S. dollars)

Category                                    Amount

Petroleum                                                 D
Total Manufacturing                                   1,021
    Food & Kindred Products                   350
    Chemicals and Allied Products             366
    Metals, Primary & Fabricated               24
    Machinery, except Electrical               -5
    Electric & Electronic Equipment           179
    Transportation Equipment                    0
    Other Manufacturing                       107
Wholesale Trade                                         126
Banking                                                 340
Finance and Insurance                                     D
Services                                                  D
Other Industries                                         64

TOTAL ALL INDUSTRIES                                  1,565


(D)-Suppressed to avoid disclosing data of individual companies

Source:  U.S. Department of Commerce, Bureau of Economic
Analysis.

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