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The Impact of The COVID-19 Pandemic On The Construc On Industry in The Philippines
The Impact of The COVID-19 Pandemic On The Construc On Industry in The Philippines
The Impact of The COVID-19 Pandemic On The Construc On Industry in The Philippines
Melisa R. Serrano1
University of the Philippines
Abstract
1 Professor, School of Labor and Industrial Rela ons, University of the Philippines, Diliman,
Quezon City.
2 Program Coordinator, Labor Educa on and Research Network (LEARN), Quezon City.
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Philippine Journal of Labor and Industrial Rela ons | Volume 37 • 2020
Introduction
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
This paper presents the results of a recent study that examined the impact
of the COVID-19 pandemic on the construction industry and its workers,
the role of the industry in economic recovery, and the potentials and
constraints of collective representation of workers in construction.
The next section discusses the methods used in the conduct of the
study. This is followed by a discussion on the economic contribution of
the construction industry in the Philippines and industry employers’
perspective and roadmap for the construction industry. The third
section provides a brief overview of the impact of the COVID-19
pandemic on the construction industry and the government responses
to mitigate its health and economic effects. The fourth section, the
main part of the paper, presents and discusses the key indings of
the survey and examines the impact of COVID-19 on construction
workers’ jobs, incomes and working conditions, including collective
representation. This is followed by a discussion on the effects of the
pandemic on the unionization of workers and an exploration of the
prospects for collective representation or worker organizing in the
industry in the time of COVID-19. The last part concludes the paper.
Methods
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The survey was conducted between June and September 2020. Before
the questionnaire was ielded, it was pre-tested on three workers from
three different construction projects. An online orientation about the
survey and the questionnaire was conducted for the enumerators
who were union organizers of a national construction trade union.
They distributed the questionnaire in various construction sites and
projects. As COVID-19 health protocols in the construction industry
severely limit the entry of non-workers in construction sites, the
enumerators had to coordinate with the safety of icers for the
distribution and retrieval of questionnaires.
The data gathered were encoded and processed using the software
R and Excel. Descriptive statistics, particularly frequencies, multiple
response tables, and means were used to analyze survey data.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
Contribution to GDP
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Philippine Journal of Labor and Industrial Rela ons | Volume 37 • 2020
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
half of their total obligations in the BBB program in the last three years
(2017-2019), resulting in a gap between obligations (i.e., liabilities
incurred by the government when an agency enters into contracts for
the delivery of projects) and disbursements (i.e., cold cash withdrawn
from the Bureau of the Treasury to pay for such obligations).
The chronic underspending in the BBB program puts into question its
role in fueling the country’s economic recovery from the pandemic.
As Suzara et al. (2020) exhorts: “If key agencies—notably the DPWH
and the DOTr—can’t deliver BBB projects in normal times, what more
in a pandemic?”
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
6 Department of Labor and Employment. (1993). Department Order No. 19, Series of 1993.
Guidelines on the Employment of Workers in the Construc on Industry. h ps://bwc.dole.gov.
ph/images/Issuances/DepartmentOrder/DO_19_2.pdf.
7 Ibid.
8 For the specific indicators, see Op. cit.
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9 Note that a value greater than 1 means that the industry has higher wages while a value less
than 1 means that the industry pays lower than average for all economic industries and regional
minimum wages. The values were computed based on PSA (Labor Force Surveys 2019) and
Na onal Wages and Produc vity Commission.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
became less labor intensive between 2006 and 2012 as labor share in
total inputs fell by eight percentage points in this period.
10 The full text of Republic Act 11058 can be downloaded from h ps://bwc.dole.gov.ph/im-
ages/Issuances/RA_11058_OSHLAW.pdf. The law’s Implemen ng Rules and Regula ons (De-
partment Order No. 198, Series of 2018) can be downloaded from h ps://bwc.dole.gov.ph/
images/Issuances/DepartmentOrder/DO198_18_IRR_of_RA_11058__AnACtStrengthening-
CompliancewithOSHSandProvidingPenal esForViola onsThereof.pdf.
11 The full text of Department Order No. 13, Series of 1998 can be downloaded from h ps://
oshc.dole.gov.ph/wp-content/uploads/2020/03/DO_13.pdf.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
construction industry are costly for irms, and more importantly for
workers who get injured. Having safety of icers reduces the exposure
of workers to occupational risks.
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13 Interview with key officers of the Philippine Constructors Associa on (PCA). The
roadmap was cra ed with minimal par cipa on of labor mainly through the consulta-
ons organized by the Department of Labor and Employment (DOLE) on some of the
ac on plans. In these consulta ons, trade unions were invited by the DOLE.
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the COVID-19 pandemic is not yet fully re lected in the irst quarter
of 2020 growth igure for construction. However, based on second
quarter National Income Accounts of the PSA, construction activities
declined by 34 percent and it is the hardest hit among industrial
activities, after accommodation and food service activities (-68%) and
transportation and storage (-59%).
Response of government
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The NEDA (2020) list also indicates that most of the lagship programs
are in Luzon with 22, out of 100 targeted to the NCR. Meanwhile,
Mindanao and Visayas received 25 and 17 projects, respectively.15
The DPWH is the implementing agency for 42 out of the 100
lagship infrastructure projects while the DOTr holds 38 projects.
The National Irrigation Administration and Manila Waterworks
and Sewerage System will implement ive projects each, while the
DOTr with the Bases Conversion and Development Authority will
jointly implement two projects. Other implementing agencies are
the National Olympic Committee, Department of Information and
Communications Technology, PSA, Department of Interior and Local
Government, Housing and Urban Development Coordinating Council,
and Department of Energy.
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the DOTr (Esguerra, 2020). These projects include the following: LRT-1
Cavite Extension; LRT-2 East Extension; LRT-2 West Extension; LRT-2
Fire Restoration; MRT-3 Rehabilitation; MRT-7; Metro Manila Subway;
Common Station; PNR Clark 1; PNR Clark 2 and Calamba; Subic-Clark
Railway; PNR Bicol; and Mindanao Railway.
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On March 23, 2020, another program was rolled out by the Philippine
government, through the DOLE, to support displaced workers—
COVID-19 Adjustment Measures Program (CAMP). CAMP provided a
one-time cash assistance of P5,000 to displaced workers. According
to DOLE, 618,722 formal sector workers from 31,972 micro, small and
medium enterprises were extended the cash assistance as of 7 May
2020 (DOLE, 2020). This suggests that not all of the displaced workers,
including construction workers, were able to access this assistance.
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Recall that for the irst quarter of 2020, over a million workers lost
their jobs in the construction sector alone.
The Bayanihan 2, which aims to help strengthen the health sector and
revitalize the country’s growth, provides P165.5 billion to inance
several government programs such as improvement of health care
resources, cash-for-work program, agriculture support, assistance to
industries affected by the pandemic, and procurement of coronavirus
vaccines. The government also intends to use P13 billion to implement
a cash-for-work program (i.e., TUPAD), which includes public
infrastructure works, which displaced construction workers could
access. About P4.5 billion will also be allocated for the construction
of quarantine and isolation facilities, dormitories for front liners and
expansion of government hospital capacity.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
Metro Manila and other provinces were placed under GCQ beginning
June 1, 2020, but this ended abruptly on August 3, 2020. In areas under
GCQ, all public and private construction projects were allowed to
operate on full capacity but with strict compliance to the construction
safety guidelines issued by the DPWH. On August 4 until August 18,
2020, Metro Manila and four other provinces (Bulacan, Cavite, Laguna,
and Rizal) reverted back to the stricter modi ied enhanced community
quarantine (MECQ)as a result of the clamor of health workers for a
two-week “time-out” for the government to recalibrate its plans and
efforts to stem the exponential rise of COVID-19 cases beginning mid-
July. Under MECQ, essential projects,18 whether public or private, and
priority public and private construction projects (i.e., those that relate
to food production, agriculture, ishery, ish port development, energy,
housing, communication, water utilities, manufacturing, and Business
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On May 19, 2020, the DPWH issued Department Order No. 39 (DO 39),
Series of 2020, on the Revised Safety Guidelines for the Implementation
of Infrastructure Projects during the COVID-19 Public Health Crisis. DO
39 repeals the earlier issued Department Order No. 35, Series of 2020,
on Construction Safety Guidelines for the Implementation of all DPWH
Infrastructure Projects during the COVID-19 Public Health Crisis.
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Survey results
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Philippine Journal of Labor and Industrial Rela ons | Volume 37 • 2020
respondents are below the age 45 years old. The age group 26-35 is
the largest followed by 36-45.
Half of the respondents earn at most P545 per day. The average daily
wage of respondents is P597.77. The average wage is greater than the
median because there are outliers who earn more than P1,000 per day.
The average daily earnings of male construction workers is P601.22
while female workers earn less at an average of P569.10. Excluding
those who earn more than P2,000, the average male earnings is
P568.80 which is close to the average for females. The average daily
basic pay in the sector is also higher than the daily minimum wage in
the NCR, which was P537.00 per day as of November 2020.
The respondents were asked about their situation at work from mid-
March to September 2020 during the pandemic. The questionnaire
covered workers’ perspective on the impact of the pandemic on their
work, the adjustments done by the workers and their employers, and
health and safety issues and company policies related to COVID.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
Based on the survey, a majority (65%) of the respondents said that all
work in their projects were suspended while nine percent said that a
skeletal force was maintained in their projects. Meanwhile, more than
half (55%) of the respondents said that their work stopped because of
the lockdown, while only ive percent said that their work continued.
This meant that only ive percent of the respondents continued
receiving wages, as most construction workers are daily wage earners.
Construction work resumed fully under the GCQ period (June 1, 2020
to the present), although with strict health and safety protocols as
prescribed (DPWH, 2020). Under the GCQ, only ive percent of the
respondents said that construction projects they work in had not
resumed operations yet and more respondents have returned to work.
Consequently, there were more workers earning wages because work
had resumed.
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Overall, the survey found that work was continuous for a majority
(88%) of the respondents who were able to return to work in the
construction projects. Most of these workers (71%) also did not
experience reduction in work hours and wages. Nonetheless, one in
three (33%) worker-respondents experienced reduction in wages and
the average reduction in wages was 14 percent (38%).19
19 The lowest reduc on in wages is one percent while the highest is 50 percent.
20 In the case of an aqueduct/water distribu on project, for example, there was a temporary
suspension of work during the ECQ period which lasted for two and a half months (from March
15 to May 31, 2020). This work suspension affected 400 of the close to 800 workers employed
by the construc on company before the pandemic. All the affected workers were each given a
one- me financial assistance of P8,000 plus one and a half months’ salary. The work suspension
however lasted for two and a half months. This means that the workers did not receive wages
for one month of the work suspension. (Nolla Interview, 2020)
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
More than half of the participants (61%) said they received relief
from their local governments. Almost one in ive (19%) respondents
said they received food relief, as well as inancial support from their
employers. Only four percent received relief from the unions. It
should be noted that none of the projects or companies covered in the
survey are unionized. Meanwhile, over one in ive (22%) respondents
received inancial support from the local government, while almost
20 percent of the respondents said that they received food relief from
other people. Meanwhile, 14 percent of the respondents were able to
bene it from DOLE’s CAMP.
Based on the survey, 86 percent of the respondents said that they have
returned to work at the time of interview. Most of the respondents
were able to return to work in June 2020 when the GCQ was imposed
in NCR and many parts of the country.
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21 This is not only observed within individual firms. In an interview with PCA officers, during
the cra ing of the construc on sector roadmap, because workers are not well represented
due to low unioniza on rate in construc on sector, the construc on firms assumed the role of
ar cula on on behalf of workers as if they fully understand their interest.
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More than half of the respondents thought that the items listed in
Table 14 must all be provided by their employers. However, there are
more respondents (67.8%) who thought that management must pay
the wages of workers who need to quarantine themselves when they
become infected, as well as shoulder the expense of hospitalization
(66.4% of respondents). Meanwhile, more than half (59.2%) of
respondents pointed out that employers must pay compensation to
the family of a worker who got infected with COVID-19 at the worksite
and who eventually died. Another half (54.6%) said that employers
should also pay compensation to a worker who cannot go back to work
due to COVID-19 contracted in the worksite.
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The survey identi ied the channels through which workers can air their
grievances in the workplace. More than half (55%) of the respondents
said they communicate to their foreman problems or issues they
encounter at work. Almost half (48%) of respondents communicate
their grievances to their team leaders. Over one in three (35%) talk
directly to their employer (e.g., subcontractor), while about one in
three (32.9%) respondents share grievances directly with the principal
of the construction project.
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Serrano and Cas llo | The Impact of the COVID-19 Pandemic on the Construc on Industry
Indeed, the COVID-19 pandemic and the health and safety regulations
imposed by the government to prevent the transmission of the
coronavirus in workplaces and worksites have exacerbated the
dif iculties in organizing workers in the construction sector where the
unionization rate remains low. The survey indings and the information
gathered from the union leaders interviewed underscored this
situation. Moreover, in some of the unionized construction companies
that retrenched workers at the height of the pandemic outbreak, union
membership declined as workers who are union members lost their
jobs. For example, in one construction company where there is a union
af iliated with ALU-TUCP, the number of union members shrank to
174 from 500 before the pandemic (Seno Interview, 2020). In another
unionized company, the number of union members was halved from
300 before the pandemic to just about 150 members (ibid).
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All these suggest that not only has the pandemic aggravated organizing
dif iculties in the construction industry, but it has also been used by
some employers to break unions.
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Conclusion
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Many construction workers totally lost their jobs too during the
pandemic. Leaders of the union federations we interviewed pointed
out that although construction activities started to resume in June
2020, not all workers were able to return to work as companies used
fewer workers or totally shut down operations.
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The pandemic may have exacerbated the dif iculties faced by trade
unions in organizing workers in the construction industry where
union density was a pittance 1.3 percent in 2018. Nonetheless, the
massive infrastructure programs that have been included in the
Philippine government’s economic recovery program from the
pandemic make the industry a green ield for organizing. From our
survey, we found that construction workers are aware of the value of
having a workers’ organization in protecting their rights and security
at work. Several forms of organizations have been identi ied as well—
worker association, union, worker cooperative, and guild—albeit
with preference to worker association. All this should help facilitate
organizing of workers in the construction sector.
Acknowledgement
The study was commissioned to the authors by the Building and Wood
Workers’ International Asia Paci ic and funded by the Friedrich-Ebert-
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Philippine Journal of Labor and Industrial Rela ons | Volume 37 • 2020
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