Underground Economy

The Underground Economy

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The year was 1985. Filipinos were experiencing some of the hardest times in terms of freedom and jobs. The political turmoil  that engulfed the country after former Senator Benigno Aquino was assassinated in 1983 brought the crippled economy to the edge.

The peso could not buy anything more than a piece of gum and a stick of cigarette. If a student from a poor background –  whose ‘baon’ or lunch money and fare averaged   P2.50 a day – wanted to purchase something better for the stomach, a small piece of bread with a thin slice of  imitation cheese in it would cost P1.50.

All economic indicators foretold a meltdown as foreign sources of funds dried up in protest of the dictatorship and the grave mismanagement of the economy. All the arrows – on all the charts that mattered – pointed downward. The domestic economy, on the other hand, seemed like contradiction in terms as industries and agriculture were practically non-existent by virtue of idled agricultural lands and padlocked industries that relied too much on imported materials and equipment.

On the Brink

Some felt that civil war was imminent with the masses getting restless and the middle class increasingly feeling disenfranchised. ‘Panic-buying’ was coined in those days, and permanently into the Filipino psyche as basic commodities vanished from the shelves. Soon thereafter, EDSA occurred. But the political revolt did not really infuse cash immediately into the ravaged economy. The new economic policy was nothing more than a piece of paper. And yet the masses did not die of starvation. Why?

Informal Economy

The underground economy was credited for propping up the economy during those turbulent years. While the goods and services that they produced did not always register in the government’s books, the income that they generated enabled Filipinos to survive the crisis, work and feed themselves. At a time when there wasn’t much to speak of in the formal economy, the underground economy, apart from the huge amount of dollar remittances from Overseas Filipino Workers, took the cudgels for the nation.    

All economic indicators foretold a meltdown as foreign sources of funds dried up in protest of the dictatorship

The underground economy is also referred to as the ‘informal economy.’ Often, when dangerous activities and organized groups are involved,  we recognize it more commonly as the ‘black market.’  One can think of the unlicensed, un-taxed garment makers, sari-sari store, the ‘manicurists,’ and the vendors of ‘mani’ (peanuts), fish-balls, and ‘iskrambol’ (frostees) as part of a huge informal economy. Black market activities could range from forbidden money-changing to the smuggling of machine parts and basic items. The informal economy that helped the Filipinos during the eighties was a mixture of these two kinds, but a big chunk was a contribution of the unregistered, blue-collar workers who sweat it out on the streets, in shops, and in their cramped residences.


A lot of efforts have been initiated to bring in the informal workers into the mainstream, in order to regulate and collect taxes from them. True, a lot more can be gained if black market activities, such as smuggling, were stopped. But perhaps because it has been ingrained in the Filipino culture, a lot of resistance meets each government initiative when people regard the smaller ones as helpless victims of taxmen. The hardworking members of the informal economy have become part of the daily Pinoy life, from being the sources of cheap but refreshing buko juice and ‘samalamig,’ filling banana-que and ‘cornicks,’ to able fixers of broken umbrellas, shoes, and tricycles, to jeepney barkers in the chaotic streets, and to providing makeshift ramps so that Makati-bound ladies would not get their hardworking feet soaked into muddy waters or get caught in manholes and potholes as it rains in Manila half of the year.

Following are articles that talk about

bullet street vendors in Manila in the old days and
bullet recent moves to legalize street vendors

Article No. 1
Street vendors in old Manila
by  Ambeth R. Ocampo

Article No. 2
Metro Manila Street Vendors to Be Legalized

by Sol Jose Vanzi