EXPORTERS have warned of a slowdown in employment in the months to come, as investors are reportedly wary of the country’s business climate with the string of labor reforms being implemented by the government.
The Philippine Exporters Confederation Inc. (Philexport) said unemployment may have gone down in April, as shown in the latest Labor Force Survey by the Philippines Statistics Authority (PSA), but argued this will not persist for the remainder of the year. He said the labor reforms being carried out by the government will certainly affect the employment situation in the country.
In an interview with the BusinessMirror, Philexport President Sergio R. Ortiz-Luis Jr. warned the government is treading the wrong path for millions of workers if it grants the petitions for wage hikes by lawmakers and labor groups. He said a wage increase will weaken both the Philippines’s investment climate and its competitiveness, as it will follow a recent executive order (EO) that had imposed stiffer regulation on contractualization.
“[The improvement in our employment is] understandable because it is on a year-to-year basis. Remember that the government’s infrastructure program is now in full swing, which it was not last year,” Ortiz-Luis said in a mix of English and Filipino.
“We could have done a lot better if the other aspects of investment—for instance, the labor issues—were resolved. If the government does not address those, it will really take a toll on our employment generation in the next months,” he added.
Figures from the PSA indicated that unemployment rate improved to 5.5 percent in April, the lowest in the past decade, from 5.7 percent during the same month last year. The industry sector posted a surging 8.1-percent growth rate, or 605,000 workers, that heightened its total employment share to 19.7 percent, the largest in the past decade.
The Duterte administration’s “Build, Build, Build” (BBB) program proved to be a major factor in the employment of Filipinos, as the construction subsector generated a total of 468,000 jobs during the period. Ortiz-Luis also considered the infrastructure buildup as the primary mover in the country’s lower unemployment rate in April.
However, the BBB program’s job creation will not suffice, as dozens of investors are now thinking twice about retaining their operations here in the country, Ortiz-Luis said.
“Many businessmen are really saying that, if the government continues with its prohibition on contractual employment—that workers need to be regularized even if firms don’t need them—then they will hold out and transfer to a neighboring country that is more competitive,” he added.
“With this, we should anticipate that unemployment will expand in the next months. It will not only expand, but it will be disastrous. The labor reforms by the government are not acceptable to investors, especially the policy on endo. If they want to leave the country, they will do just that,” the Philexport chief said.
President Duterte signed on May 1 an EO implementing a more stringent regulation on fixed-term employment. Although the EO aims to regulate contractualization, workers argued the EO is toned down and does not reflect what they have been fighting for for years.
Apart from this, labor groups, particularly the Associated Labor Unions-Trade Union Congress of the Philippines, asked the government to implement an P800 nationwide minimum wage in response to the soaring prices of goods and services brought about by petrol price hikes and the inflationary impact of the tax reform law. Left-leaning lawmakers in the House of Representatives are also seeking to standardize the minimum wage rate at P750.
Image credits: Nonie Reyes