MANILA - The executive order signed by President Rodrigo Duterte against illegal contractualization may discourage foreign investments in the country, the head of the European business lobby said on Wednesday.
Many companies, especially in the manufacturing sector, need "flexibility" to be allowed to hire short-term labor, said European Chamber of Commerce in the Philippines president Guenter Taus.
"In the Philippines, a lot of manufacturing is very cyclic and you need that flexibility that you can hire short term labor for 2, 3, 4 months and go back to your normal work force," Taus told Market Edge.
ECCP members, he said, might consider moving out of the country, if they are not allowed to hire short-term labor.
"If you take that away, it will certainly have a very negative impact on continued foreign investment and existing foreign investment."
Labor groups on Tuesday criticized Duterte's EO saying it said fell short of their demand to ban all forms of contractualization.