The Philippines is expected to pave the way for more liberal employment laws later this month. Philippine President Benigno Aquino is coming under growing pressure to reform labour laws when he gives his state of the nation address on 22 July.

Too complex

The complexity of the rules governing the termination of employment contracts is being cited as one of the main blocks hampering the development of the Philippine economy. Although the Philippines is growing faster than any other East Asian nation - with Q1 growth of 7.8 per cent this year - many employers are taking a 'wait and see' approach to hiring, according to the industry association, the Filipino-Cebu Business Club. 

Working longer hours

Rey Calooy, chairman of the association, told the Financial Times: 'It’s not easy to fire workers when you face a downturn because of the complex legal requirements.' Although demand is currently high, he says, employers are waiting to ensure that it is sustainable before they take on more staff. As a result, many companies are asking existing employees to work longer hours rather than taking on new staff. The Institute for Political and Electoral Reforms believes that the government, having proved its credentials to stimulate business through anti-corruption and good governance measures, is now under intense voter pressure to help job creation and reduce poverty.

Legal Process Outsourcing

The Philippines has long provided back-office services to law firms, particularly US firms such as White & Case. Many have set up Legal Process Outsourcing offices in the area, in a move to cut legal bills.  Paralegals or legal employees earn in the region of £5,000-£8,000 annually, a fraction of the costs involved in employing similar legal personnel in the US or Europe.