Online workers may want to gain access to certain social benefits and even pay taxes, but their classification as workers and other requirements prevent them from doing so, according to a study released by the Philippine Institute for Development Studies (PIDS).
In a study titled Exploring Policies and Initiatives for Online Workers in the Philippines, PIDS Senior Research Fellow Ramonette B. Serafica and Research Analyst Queen Cel A. Oren said the classification of online workers could overlap with existing categories, preventing them from accessing benefits and paying taxes.
In terms of paying taxes, specifically, the researchers said, if online workers would pay their taxes as self-employed workers, the government will ask them to provide an address of where their store fronts are located, which is not applicable to them.
“Ensuring decent work for platform workers remains an issue due to the vagueness and ambiguity of employment status for platform workers,” the researchers said. “The digital nature of the work and work arrangements also present both opportunities and risks for the workers.”
The researchers said steps in the right direction include the passage of the Freelancers Act and the Magna Carta for Workers in the Informal Economy.
The Freelancers Act aims to recognize the right of freelancers to easy registration and access to social protection benefits, while the Magna Carta for Workers in the Informal Economy affirms that social insurance programs should be made available to workers in the informal sector.
Ultimately, the researchers said, whatever reforms will be implemented such as a redesign of the country’s social protection system or taxation system, these designs must first be piloted to ensure feasibility.
“Whether it is to design a social protection scheme suitable for online workers or a mechanism to increase tax compliance, field experiments could be conducted to determine the appropriate interventions that will encourage participation and reduce the informality of online work. New programs will also need to be piloted before full-scale implementation,” the researchers said.
The researchers said that a study by the African Development Bank showed that up to 540 million people would benefit from earning in platform work by 2025, consequently increasing self-employed workers.
Citing Payoneer, a cross-border payment platform, the researchers said the revenue of freelancers in Asia in 2019 doubled compared to 2018. The same data showed the Philippines is a leader in terms of online freelancers.
The Philippines, which ranked 6th, recorded a 35-percent growth in freelancing revenue from 2018 to 2019 and jumped to first place with a 208-percent freelance revenue growth from 2019 to 2020.
Before pandemic, the researchers said the number of full-time remote workers was expected to increase by 12.3 percent in five years.
However, due to the pandemic, the expected growth rate might nearly double by up to 22.9 percent. It is predicted that about one-third of workers will be partly or fully working remotely five years from now. 30
