The complete elimination of employment through contractualization may have unforeseen negative consequences, according to two top local businessmen, who urged the government to instead focus on stopping abuses of the practice.
During a forum organized by the Economic Journalists Association of the Philippines (EJAP) and ING Bank on Tuesday, DMCI Holdings Inc., Chairman Isidro Consunji said it would be wrong to abolish contractualization as a whole, but rather the abuses associated with it.
“I think its inappropriate to eliminate contractualization per se,” Consunji said “I think that the issue there is in the abuses rather than the elimination of contractualization.”
Phinma Corp., Chairman and Chief Executive Officer Ramon del Rosario Jr., echoed Consunji’s sentiments, agreeing that it is the abuses associated with contractualization that should be condemned and not contractualization as a whole.
“It is fair to say that contractualization has been abused. And there are legitimate reasons to complain about those abuses,” Del Rosario said.
“But on the other hand, I think it is very dangerous to condemn contratualization as a general principle because there are sectors, industries in our economy that are offered on the basis of contracts,” and cannot operate on a non-contract basis, Del Rosario said.
Examples of these kinds of businesses are the construction and business process outsourcing industries, Del Rosario said.
“Construction is an example. Construction projects are always done by contracts. Of course if a project is done by contract, the bulk of the people employed are under a contract basis. I cannot envision how banning contractualization will work in the context of industries like construction, for example. Even business process outsourcing (BPO), many of the engagements are also done by contracts,” he explained.
Del Rosario stressed that in approaching the issue that there should be separation between contractualization and the abuses of it.
“There are many sectors of the economy wherein the only way you can hire people is through contracts. So let’s be very precise about what it is that we are against. I think it’s the abuses,” Del Rosario said.
The Phinma CEO expressed his hope that people are against the abuses of contractualization and not the general principle of it.
“I think when people say endo, it tends to connote the wrong principle of contractualization. What I hope they really mean are the abuses,” Del Rosario concluded.