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Economy

Duterte vetoes contract labor bill in boost for Philippine business

Employers hail last-minute move as a 'wise decision' by self-styled socialist

Philippine President Rodrigo Duterte, speaks at the Nikkei's Future of Asia conference on May 31, in Tokyo. (Photo by Yuki Nakao)

MANILA -- Philippine President Rodrigo Duterte, a self-styled advocate of labor rights who has threatened companies that hire workers on contracts, on Friday vetoed a bill that would have forced businesses to turn temporary staff into regular employees.

Duterte's move is a win for employers who had warned the proposed law would increase costs and hurt competitiveness, but a loss for labor groups that had banked on his pro-worker leanings. Both sides had been on edge in recent days as the bill would have automatically become law this weekend had the president not acted.

"The business community can now breathe a sigh of relief," said Edgardo Lacson, chairman of the Employers Confederation of the Philippines. "We thank President Duterte for looking beyond the interest of a few union leaders and vetoing the bill to protect the Philippine economy."

Duterte spokesman Salvador Panelo did not immediately provide an explanation for the veto, but some of the president's economic officials had expressed reservations. Socioeconomic Planning Secretary Ernesto Pernia said the legislation needed "tweaking" -- a position backed by Financial Secretary Carlos Dominguez.

"It has to be fair between workers and employers because if you want jobs to be available, you need investment," Pernia told reporters on Wednesday.

The proposed bill would have ended an arrangement called "Endo" under which workers can be hired for up to six months to avoid making them full-time employees entitled to paid leave and other benefits.

Business chambers early this month asked the president to block the bill, which they said was "counterproductive" and a "return of the Dark Ages" at a time when the rest of the world was moving toward more flexible working arrangements.

"The president made a wise decision," Francis Chua, chairman emeritus at the Philippine Chamber of Commerce and Industry, said of the veto.

Friday's move was an about-turn for the president. Shortly after assuming office in 2016, Duterte publicly taunted businesses, saying: "Stop contractualization or I will kill you."

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