Government open to review of country’s labor laws

MANILA, Philippines – The government is open to relaxing its labor laws because its strictness has been cited by investors as one of the reasons why the Philippines is uncompetitive.

During his address at the second day of the Philippine Business Conference at the Manila Hotel yesterday, Trade Secretary Gregory L. Domingo said that “maybe we can relax some of our labor laws. The stricter the labor laws the less competitive,” he added.

Domingo explained that the strict labor laws are only helping those that are already employed. However, because of its rigidness, it can cause the contraction of the labor force. “The employed have better benefits but there is less employment.”

“Laborers need some protection; the question is to what degree so that we don’t become uncompetitive,” Domingo said.

Domingo said the government is doing its best to make the Philippines a viable business destination. In fact, for the Public Private Partnership (PPP) that is being espoused by the government, Domingo said that they are trying to mitigate the risks. “It is unfair for the private sector to take that risk.”

Another concern of the investors is the ownership law. Unfortunately, this is a constitutional matter. “There are a lot of restrictive clauses in the constitution. This is a sore point for the trading partners,” Domingo stressed.

The secretary said that he has already told investors that the problems with Philippine laws may be workable but with the constitution he said “who knows. It could be next year. It could be never.”

Meanwhile, Domingo said that the Philippines does not have much choice when it comes to participating in trade agreements. He said that if the Philippines closes its doors to free trade agreements (FTAs), we will be left behind. “Not doing so will be a disaster.”

Domingo said that the normal knee jerk reaction would be for industries to ask protection from the government but he warned that this will lead to the demise of the demise of the protected industries.

He stressed that protection may work in the short term but the government would not want it to remain unless we want our economy to be smaller and smaller. –Ma. Elisa P. Osorio (The Philippine Star)