Government urged to make doing business in Phl easier

MANILA, Philippines - Foreign businessmen said yesterday the government must make it easier for businesses operating in the country to terminate employees and allow subcontracting of workers.

In a report titled “Arangkada Philippines 2010: A Business Perspective,” the Joint Foreign Chambers (JFC) said that the Philippine Labor Code must be amended in order to help firms do business easier.

“The Labor Code should be amended to remove the prohibition against female employees working at night, to allow subcontracting, and to make it easier to terminate employees,” the report said.

The report stated that the country must fix the labor legislations that make it more difficult for companies located in the Philippines to compete in the global market.

In addition to legislative reforms, the report stated that the government must reduce the high number of holidays because it costs the Business Process Outsourcing (BPO) industry millions of dollars of unbudgeted expenses for every new holiday declared.

JFC has identified Information Technology and BPO as the biggest of the Seven Big Winners because of its large size, high growth rate, and potential to provide millions of quality jobs and earn high service export revenue.

JFC said that the Philippines has clear advantages: a large workforce of educated, English-speaking talent with a strong customer-service orientation and cultural affinity to North America; highly reliable low-cost international telecommunications; diverse and inexpensive site locations; and strong government support. “These drivers for success must be strengthened, while new reforms are also needed to realize the high growth potential,” the business group said.

Arangkada Philippines 2010: A Business Perspective is about creating a bright future for the Philippines, the 12th most populous country and probably the 10th or 9th by 2030.

Arangkada is a guidebook to a better Philippines, with the per capita income (PCI) of a middle-income economy, robust investment levels, better infrastructure and higher government revenues to pay for social services, especially education and health. 

JFC likewise said that the public and private sector leaders should create a national culture of competitiveness. The group also said that government should strengthen efforts to improve competitiveness by reducing business costs. They also recommended preparing an annual presidential report on competitiveness.

Also, the group said that the country must adjust minimum wages to be more in line with similar regional middle income economies, allow relief from minimum wages or piece work for distressed industries or find other measures that maintain jobs instead of losing them to other countries, including developing new industrial zones with infrastructure that offer lower wage rates.

The group also recommended to reduce the burden of high holiday payroll expenses by reducing the number of non-working holidays, reduce power costs for firms needing to maintain global competitiveness to survive, introduce open access and power discounts, modernize ground and marine transport to achieve competitive efficiencies and accelerate efforts to reduce the red tape burden.

Aside from reforms in labor, the group gave other recommendations in gross domestic product (GDP) growth, investments, infrastructure, power and other areas.

JFC said the government must adopt a plan to double GDP growth in three years and target $ 7.5 billion in annual FDI and $ 100 billion in exports, prioritize job creation, fund a branding/marketing campaign, channel remittances into investment, double public sector investment in physical and social infrastructure and organize a special experts group to recommend key reforms.