The country’s current labor policies are unable to make the local firms competitive nor attract more foreign investments crucial to jobs generation.

In his paper titled “Labor Policies and Philippine Companies: Analysis of Survey Opinions,” UP economics professor Dr. Gerardo Sicat, analyzed the responses from a survey of Philippine companies concerning labor market policies such as minimum wage-setting process, hiring and firing practices, training and holidays.

Based on survey results, Sicat said labor laws that are currently in place tended to harm local firms owned by the citizens most heavily compared to foreign investments operating in the country.

The government’s goal of inviting foreign direct investments (FDIs) has not yielded as much fruit as those other countries in the regions that have continuously raised the inflows of desirable FDIs.

“These twin facts seem to emphasize a failure of economic policy to address two major needs to make domestic enterprises competitive and to be a home to greater volumes of foreign capital to enable the country to raise growth, domestic employment, and sustained prosperity,” he said.

Companies owned by Filipino nationals, whether 100 percent or 60 percent controlled joint venture investments, are more critical of minimum wage legislation compared with foreign enterprises.

In general, Sicat said respondents thus found the minimum wage rate low enough. “Foreign companies tend to have a higher per worker wage bill compared to the minimum wage. This establishes the important point that the minimum wage hurts domestic firms owned of Filipinos than those owned by foreigners,” he stressed.