1. Informal Sector/ Informal Employment / Informal Economy: Definition in the Philippine Context
Wilma A. Guillen
ANS, Social Sector Statistics Service
SSO, PSA
Workshop on Transition from informal to formal economy:
Awareness raising on R204 towards designing an
integrated policy framework in the Philippines
29 November 2017

2. The PSS
The Philippine Statistical System (PSS) is characterized by strong policies, with strong institutional organization, that also recognizes and practices strong partnership and collaboration in planning and development, in general, and in the SDGs monitoring, in particular.
STRENGTHS
Legal Frameworks for Data
Institutional Organization
Strong partnership/collaboration

3. The PSS STRENGTHS Institutional Organization Legal Frameworks for Data
Presidential proclamation of the CRVS Decade , in March 2015
The PSS
STRENGTHS
Institutional Organization
Legal Frameworks for Data
PSA Board Resolution No 4, Series of 2016 enjoined all concerned government instrumentalities to provide the necessary data support to monitor the country’s performance vis-à-vis the SDGs based on the indicator framework that shall be determined by the NEDA, PSA and other government agencies.
Philippine Statistical Development Plan (PSDP)
Presidential proclamation of the CRVS Decade ( ), in March 2015

4. The PSS Strong partnership/collaboration 1 9 2 1 9 2 8 8 7 3 3 7 6 5 4
Analyze the SDG indicators for policy-making 1
Capacity building
Philippine Statistics Authority
PHILIPPINE STATISTICAL RESEARCH AND TRAINING INSTITUTE
NEDA
OTHER
DATA PRODUCERS
DATA USERS, POLICY- & DECISION MAKERS, PLANNERS
PRIVATE SECTOR
CSO
MEDIA PARTNERS
Development Partners
ACADEME 9
relevance of SDG monitoring to public policy
Integration of the SDG framework in planning & programming 2
Development of statistical methodologies 9 1 2 8 8
Activities/Investments to support achievement of the SDG
Generate statistics for some indicators 7 3 3
Funding Support
Technical assistance 7 6 5 4
Generation of data
SDG advocacy 4
Statistical advocacy
Raising public awareness on SDGs 6
Compilation/generation of data 5

5. Statistical Coordination
The PSS
OUR STRENGTHS
Statistical Coordination
Mechanism
System of Designated
Statistics (SDS)
Interagency Committees **
PSA Board
Statistical Survey Review & Clearance System (SSRCS)

6. Statistical Coordination Mechanism
The PSS
OUR STRENGTHS
Statistical Coordination Mechanism
System of Designated Statistics (SDS)
PSA Board
Establish appropriate mechanisms to promote and maintain an efficient and effective statistical system in the government and formulate policies
designate statistical activities in the PSS that will generate critical data for decision making of the government and the private sector
shall have priority in terms of resource allocation, budget for which is endorsed by the PSA Board to the DBM, together with the other statistical activities
activities under the SDS have priority in terms of resource allocation from the DBM
Statistical Survey Review and Clearance System
to ensure conformity with standard definitions, concepts and classifications, and consequently, the reliability, comparability and accuracy of statistics generated out of said surveys and/or censuses.
** IACs
Agriculture and Fishery Statistics Migration Statistics
Civil Registration and Vital Statistics Monetary, Financial & Government Finance Statistics
Education Statistics Population and Housing Statistics
Environment and Natural Resources Statisticcs 18. Poverty Statistics
Financial Statistics Price Statistics
Gender Statistics Science and Technology Statistics
Governance Statistics Security Statistics
Health and Nutrition Statistics Social Protection Statistics
Information and Communications Technology Statistics 23. Statistical Information Mgt & Dissemination
Investment Statistics Statistical Standards and Classifications
Labor and Productivity Statistics Task Force on Big Data for Official Statistics
Macroeconomic Statistics Tourism Statistics
Survey Design
Trade Statistics
Interagency Committees
resolve issues on sectoral statistics
26 Interagency Committees

7. Informal sector Informal employment informal economy”:
3 Important Concepts
Informal sector
Informal employment
informal economy”:
refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements; and
does not cover illicit activities

8. PSA Board Resolution 01, Series of 2017
Existing Definition (Phil)
2002 Official Definition of Informal Sector
Resolutions Approved by the NSCB Executive Board
Series of 2002 
NSCB Resolution No Attachment 1
OFFICIAL DEFINITION OF THE INFORMAL SECTOR
1.  Conceptual Definition
The informal sector consists of “units” engaged in the production of goods and services with the primary objective of generating employment and incomes to the persons concerned in order to earn a living.
These units typically operate at a low level of organization, with little or no division between labour and capital as factors of production. It consists of household unincorporated enterprises that are market and non-market producers of goods as well as market producers of services.
Labor relations, where they exist, are based on casual employment, kinship or personal and social relations rather than formal or contractual arrangements.
2.  Operational Definition
For statistical purposes, the informal sector shall refer to household unincorporated enterprises which consists of both informal own-account enterprises and enterprises of informal employers.
Informal own-account enterprises are household unincorporated enterprises owned and operated by own-account workers, either alone or in partnership with members of the same or other households which may employ unpaid family workers as well as occasionally/seasonally hired workers but do not employ employees on a continuous basis.
Enterprises of informal employers are household unincorporated enterprises owned and operated by own-account workers, either alone or in partnership with members of the same or other households which employ one or more employees on a continuous basis.
Particular cases that are excluded:
Corporations
Quasi-corporations
Units with ten or more employees
Corporate farms
Commercial livestock raising
Commercial fishing
PSA Board Resolution 01, Series of 2017
Number 89

9. 2002 Official Definition of Informal Sector
Existing Definition (Phil)
2002 Official Definition of Informal Sector
INFORMAL SECTOR
CONCEPTUAL DEFINITION
OPERATIONAL DEFINITION
INCLUSION
“units” engaged in the production of goods and services primary objective is generating employment and incomes_to the persons concerned to earn a living
Household unincorporated enterprises: market or non-market producers of goods, AND market producers of services
Household unincorporated enterprises
1. Informal own-account enterprises
2. Enterprises of informal employers
LABOR RELATIONS
casual employment, kinship or personal RATHER THAN formal or contractual
-same

10. 2002 Official Definition of Informal Sector
Existing Definition (Phil)
2002 Official Definition of Informal Sector
INFORMAL SECTOR
CONCEPTUAL DEFINITION
OPERATIONAL DEFINITION
OPERATION
low level of organization _no division between Labour and capital factors of production
Informal own-account enterprises
owned and operated by own-account workers either alone or in partnership with members of the same household or other households
May employ unpaid family workers
occasionally./seasonally hire workers
Do not employ employees on a continuous basis
Enterprises of informal employers
Owned and operated by own-account workers either alone or in partnership with members of the same household or other households
Employ one or more employees on a continuous basis
Enterprise : Any unit engaged in the production of goods or services for sale or barter
employ workers OR purchase services;
owned and operated by single individuals working for their own account as
self-employed persons (alone or with help of unpaid family members)

11. PSA Board Resolution 01, Series of 2017 Number 105
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
NSCB Resolution No. 16 Series of 2003
ADOPTING A SET OF CRITERIA FOR IDENTIFYING THE INFORMAL SECTOR
WHEREAS, NSCB Resolution No. 15, Series of 2002, approved on  6 November 2002 provided the official conceptual and operational definitions of the informal sector (IS) for adoption by all concerned government agencies;
WHEREAS, said Resolution specified some cases for exclusion from the operational definition of the IS;
WHEREAS, the NSCB Executive Board instructed the Inter-Agency Committee on Labor, Income and Productivity Statistics (IACLIPS), the Technical Working Group on Labor and Employment Statistics (TWGLES), and the NSCB Technical Staff to study further the other cases for exclusion;
WHEREAS, in compliance with this instruction and in adherence to the January 1993 Resolution passed by the 15th International Conference of Labor Statisticians (ICLS) concerning statistics of employment on the IS, the IACLIPS, the TWGLES, and the NSCB Technical Staff reviewed and agreed on the other cases for exclusion and came up with a set of criteria for identifying the IS to facilitate field operations relative to data gathering activities for the sector;
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that the Board approve the identified set of criteria as part of the operational definition of the IS (Annex BR )for adoption by all concerned government agencies.
Approved this 12th day of December 2003, in Pasig City.
Attested by:
ROMULO A. VIROLA Secretary General
PSA Board Resolution 01, Series of 2017
Number 105

12. CRITERION DESCRIPTION 2003 Criteria for Identifying Informal Sector
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
CRITERION
DESCRIPTION
1. Enterprise ownership
Households
2. Legal organization
Household enterprises, which refer to unincorporated enterprises owned by households, are units engaged in the production of goods and/or services that are not constituted as legal entities independent of the households or household members that own them
The informal sector is defined irrespective of :
1. the kind of workplace where the productive activities are carried out,
2. the extent of fixed capital assets used,
3. the duration of the operation of the enterprise (perennial, seasonal, or casual), and
4. its operation as a main or secondary activity of the owner.
The following criteria must be satisfied to be considered an informal sector:

13. 2003 Criteria for Identifying Informal Sector CRITERION DESCRIPTION
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
CRITERION
DESCRIPTION
3. Type of accounts
No complete set of accounts that will distinguish production activities, flows of income and capital between the households and the enterprises
The informal sector is defined irrespective of :
1. the kind of workplace where the productive activities are carried out,
2. the extent of fixed capital assets used,
3. the duration of the operation of the enterprise (perennial, seasonal, or casual), and
4. its operation as a main or secondary activity of the owner.
The following criteria must be satisfied to be considered an informal sector:

14. 2003 Criteria for Identifying Informal Sector CRITERION DESCRIPTION
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
CRITERION
DESCRIPTION
4. Characteristics relative to employment
• Informal own-account enterprises
Household enterprises owned and operated by own-account workers, either alone or in partnership with members of the same or other households, which may employ contributing family workers and employees on an occasional basis, but do not employ employees on a continuous basis
The informal sector is defined irrespective of :
1. the kind of workplace where the productive activities are carried out,
2. the extent of fixed capital assets used,
3. the duration of the operation of the enterprise (perennial, seasonal, or casual), and
4. its operation as a main or secondary activity of the owner.
The following criteria must be satisfied to be considered an informal sector:

15. 2003 Criteria for Identifying Informal Sector CRITERION DESCRIPTION
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
CRITERION
DESCRIPTION
4. Characteristics relative to employment
 • Enterprises of informal employers
Household enterprises owned and operated by employers, either alone or in partnership with members of the same or other households, which employ one or more employees on a continuous basis
5. Product destination
At least some market output, hence, not entirely for own consumption
The informal sector is defined irrespective of :
1. the kind of workplace where the productive activities are carried out,
2. the extent of fixed capital assets used,
3. the duration of the operation of the enterprise (perennial, seasonal, or casual), and
4. its operation as a main or secondary activity of the owner.
The following criteria must be satisfied to be considered an informal sector:

16. 2003 Criteria for Identifying Informal Sector
Existing Definition (Phil)
2003 Criteria for Identifying Informal Sector
Based on these criteria, the following cases are excluded from the informal sector:
(1) Single proprietorships, partnerships and corporations (including corporate farms, commercial livestock raising, commercial fishing and similar units); (2) Quasi-corporations; (3) Units with ten or more employees (unless they satisfy all the criteria); (4) Domestic helpers hired by households; (5) Units engaged in professional services (unless they satisfy all the criteria); (6) Farms managed by cooperatives; and (7) Farms, regardless of size, keeping sets of accounts separate from the households
The informal sector is defined irrespective of :
1. the kind of workplace where the productive activities are carried out,
2. the extent of fixed capital assets used,
3. the duration of the operation of the enterprise (perennial, seasonal, or casual), and
4. its operation as a main or secondary activity of the owner.
The following criteria must be satisfied to be considered an informal sector:

17. Conceptual Framework for Informal Employment
International Framework (17th ICLS guidelines)
Conceptual Framework for Informal Employment
PRODUCTION UNITS by Type
Jobs by status in employment
Own-account workers
Employers
Contributing family workers
Employees
Members of producers’ cooperatives
Informal
Formal
Informal
Formal
Informal
Informal
Formal
Informal
Formal
Formal Sector Enterprises
INFORMAL Sector Enterprises (ISE)
HOUSEHOLDs 1 2 5 7 3 4 6 8 10 9
“there are three classification of “production units”:
1. Formal sector enterprises 
2. INFORMAL sector enterprises 
3. Households as production units 
JOBS distinguished accdg to status of employment categories (own-account workers, …) for definitional purposes and for analysis; and their nature as to formal , informal
LEGEND:
JOBS
Do not exist
Informal employment
1 to 6 ; 8 to 10
Formal jobs
Employment in the informal sector
3 to 8
Informal employment outside the informal sector
1 , 2, 9 ,10
Informal jobs

18. Informal employment Types of production units Informal jobs
Informal sector
enterprises A B
Other units of
production C D
Informal employment A + C
Informal sector employment A + B
Informal employment outside the informal
Sector C
Employment in the informal economy A + B + C

19. Maraming
Salamat Po!
PSA Website: psa.gov.ph