American investors in the Philippines warned that the proposed Anti Endo and Magna Carta for Workers in the Informal Economy bills could deter investor appetite and may even harm employment opportunities.
The American Chamber of Commerce of the Philippines (AmCham) issued this statement following the recent public hearing on the proposed bills being tackled by Senator Raffy T. Tulfo and the members of the Senate Committee on Labor, Employment and Human Resources Development where AmCham officers were invited to attend.
“AmCham fully supports the objective of promoting fair employment, protecting workers’ rights, and ensuring dignified and secure livelihoods for Filipino workers. However, AmCham also notes that the proposed legislation may lead to unintended negative consequences on foreign investment, which could reduce employment and harm the overall economy,” the statement noted.
The Anti-Endo Bill (Security of Tenure Bill) aims to prohibit labor-only contracting and the “5-5-5” scheme, where workers are hired for five months to evade regularization. It seeks to amend the Labor Code to ensure security of tenure by requiring companies to directly hire employees for core functions, ensuring regular employment status.
U.S. companies noted that existing Philippine laws already provide a comprehensive framework governing labor contracting and subcontracting arrangements, with clear rules and enforcement mechanisms. Instead, AmCham said that strengthening implementation of these regulations may be more effective than introducing additional measures that risk duplication and confusion.
At the same time, workforce flexibility remains essential for businesses to stay competitive and responsive in a rapidly evolving global economy. Legitimate contracting arrangements enable companies to address seasonal demand, project-based work, and specialized services. Overly broad restrictions may discourage expansion, reduce efficiency, and ultimately limit job creation.
AmCham also noted of potential implications for the Philippines’ investment climate, as regulatory predictability and labor flexibility remain key considerations for investors across ASEAN. Introducing more rigid labor regulations may place the Philippines at a comparative disadvantage and unintentionally signal a less competitive environment relative to regional peers.
In light of these considerations, AmCham advocates for a balanced and pragmatic approach through continued dialogue among government, labor groups, and the private sector to ensure that policies are both protective and conducive to economic development.
