Yung lean manufacturing is more a function of productivity and or efficiency than labor cost alone. It sprang out of Japanese continuous improvement methods. Contractualization is targetted more towards avoiding benefits. Everybody knows that when you become a regular employee you have more benefits under the law it has nothing to do with productivity. Even advanced countries practice it to avoid giving benefits to their employees. If you cannot compete in the low end then go for the higher end. Design also comes into play and that is our advantage kaya nabubuhay pa rin ang Cebu furniture industry kasi me differentiating factor sila although they are also facing tough competition even in their export markets. It would be similar when making shoes or automobiles. You have to know your niche so to speak.