Security of tenure bill seen harmful to firms

The passage of the security of tenure (SOT) bill might force several companies to close down, which will make it difficult for the country’s employment figures to rise.

Economist Gerardo Sicat, the first director general of the National Economic and Development Authority, said this on Friday, adding that the labor law should be improved “so we can become more flexible like our neighbors.”


Sicat said this on the sidelines of a press conference where some members of the business community raised their concerns on issues that included that on the said bill.

The bill provides for the regularization of project-based and seasonal workers and requires the government to extend financial assistance and provide training to workers in between jobs.


The measure was transmitted to Malacañang on June 27. It will lapse into law if not acted upon by the President by July 27.

“That will make it very hard for employment to rise … But it will restrict the entry of new foreign investments,” Sicat said.

He said the measure might lead to the closure of existing companies that would be affected adversely.

Sicat’s comments echoed the sentiments of the business community who had asked the President to veto the bill.

Sicat is part of the advisory board of the Foundation for Economic Freedom (FEF), a group founded by prominent scholars and technocrats concerned over the lack of public appreciation for a free market economy, the group’s website showed.

FEF, along with other groups, claimed the bill had “double standard” since it would make a business costlier on the part of the private sector, but not on the government. That statement was made by Philippine business groups and the Joint Foreign Chambers in the country.

“The [SoT] bill does not cover contractual workers hired by government agencies due to the potential severe fiscal challenge it may pose, as well as uncertainties over whether the contractual workers will be regularized, given Civil Service Commission requirements,” the statement said.


“Therefore, it does not protect contractual workers hired by government with tenure of up to 15 years already, under the so-called job order system,” it added.

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TAGS: Endo, Labor, regularization, Security of Tenure
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