Proposed labor policies to hurt Philippine export growth

By Richmond Mercurio (The Philippine Star), October 31, 2016

MANILA, Philippines – Proposed labor policies, which include wage adjustments and the termination of the end-of-contract (endo) work arrangement, are seen to drag down the country’s already slumping export growth, the Philippine Exporters Confederation Inc. (Philexport) said.

“By the looks of it, we will be lucky to end up with a flat export performance, not factoring in the negative effects of recent wages and hiring proposals,” Philexport president Sergio Ortiz-Luis said.

Industry stakeholders have already revised the country’s export target to three percent this year and in 2017, down from the original forecast of 6.6 to 8.8 percent and 7.7 to 10.6 percent, respectively.

Government data, meanwhile, showed exports weakened for the 17th consecutive month by 4.4 percent to $4.9 billion in August this year.

“Among us private sector, there is no doubt that both policies are sure to create devastating effects on enterprises and industries at a time when we have yet to address our poverty and unemployment problems,” Philexport food trustee Roberto Amores said.

Exporters have been strongly opposing the proposed P125 minimum wage increase nationwide, saying its implementation would reduce job and economic growth, and affect the country’s trade competitiveness.

Philexport, however, is in full support of ridding the country of the illegal aspects of contractualization.

Ortiz-Luis earlier said cases of hiring contractuals could not be avoided but they should be provided with proper compensation and benefits.

Amores, who is also a member of Employers Confederation of the Philippines board of advisers, said industry players are currently waiting for government action on these two proposed labor policies.

He, however, lauded the Department of Labor and Employment for initiating consultations to gather information and address issues to come up with policies that are “biased towards job creation.”

Amores said policies and laws protecting the rights of workers in the country are many and in place already, noting “it is just a matter of implementation.”

“The jobs government wants to keep may be the same jobs we will lose if we do not balance the interests of all stakeholders involved,” he said.

Ortiz-Luis, for his part, said it is important for the country to implement measures to weather the ongoing export slump.

He said there should be a common resolve among economies to revive global trade by boosting government spending and removing barriers to trade.

“Domestically, roadmaps will have to be funded and implemented. Enterprises will have to revisit their business models. We need to think innovation and out-of-the-box,” Ortiz-Luis said.