EMPLOYERS said they expect foreign direct investment (FDI) to suffer when the Security of Tenure (SoT) bill is signed into law, after the Senate voted 15-0 to approve the bill on third and final reading.
The Senate on Wednesday approved Senate Bill 1826, also known as the Anti-Endo Bill. The bill has been certified as urgent by President Rodrigo R. Duterte and is awaiting harmonization with the House version of the measure in bicameral conference.
Employers Confederation of the Philippines (ECoP) President Sergio R. Ortiz-Luis said FDI will dip if the law prohibits contract labor. He told BusinessWorld, “We fear that we will lose foreign direct investment and local investment….if you prohibit contracting and subcontracting, why would investors come here?”
He said the Business Process Outsourcing (BPO) sector will be affected by this. He noted, “If I were a BPO principal in New York, why will I invest here?”
Philippine Chamber of Commerce & Industry (PCCI) Chairman George T. Barcelon told BusinessWorld Thursday: ”Foreign Direct Investment will be affected… a lot of exports are seasonal in nature.” He added that manpower needed in those situations will require the use of short-term contracts.
American Chamber of Commerce (AmCham) Senior Advisor John Forbes did not immediately provide an assessment since the SoT Bill may yet be modified in bicameral conference, but noted: “In the fierce competition for foreign investment, it is very important for the Philippines to maintain competitive labor policies.”
He added, “Businesses expect the law to allow the hiring of contractual workers for non-core work including projects and seasonal requirements.”
Mr. Ortiz-Luis said that despite being against the total prohibition of contracting activities, he is against illegal contracting arrangements such as endo or end-of-contract or 555, which deny probationary workers a path to regular employment by cutting short their tenure after five months, or one month short of the six months provided by law before a probationary employee becomes a permanent one.
He added current labor laws already provide penalties against the banned contracting arrangements.
“The SoT (bill) just included more provisions but (the) only objectionable (practices are) endo and 555,” he stressed.
Mr. Barcelon also said one consequence of the SoT Bill is that employers will be much more careful in hiring and added, “It’s not best for the worker… they’re not considering the unemployed and the underemployed.”
He noted that the bill will lead companies to make do with fewer employees. Mr. Barcelon added: “Companies will hire fewer people and fewer workers will mean more overtime and labor.”
The employers said they are monitoring developments at the bicameral level conference. Both ECoP and PCCI said they hope Congress will address the finer points of the issue and discuss what is best for both the employee and employer. — Gillian M. Cortez