Next week President Rodrigo Duterte will deliver, within the premises of the House of Representatives, his second report to the Filipino people on his first year of stewardship of their affairs. Because it was one of his principal promises to the electorate during the 2016 electoral campaign, Mr. Duterte will have to tell his countrymen how his administration’s drive against “endo”—the hiring of workers through successive contracts of less than six months’ duration—has been faring.
That part of Mr. Duterte’s second State of the Nation Address will be filled in by data from DoLE (Department of Labor and Employment), within whose domain the endo issue falls. I am not in a position to say if the Secretary of Labor and Employment ever was fully committed to the policy of ending the endo system, but Secretary Silvestre Belo III’s recent statements and body language have not been suggestive of enthusiasm or great optimism. One gets the feeling that Secretary Bello has not embraced the policy and has just been going through the motions.
Why should the Secretary of Labor and Employment be enthusiastic and pessimistic about the impact and future of the end-endo drive? Because, although he is a lawyer and not an economist, Silvestre Bello III appreciates that, while considerations of fairness and generosity demand that all workers receive all the worker benefits prescribed by law, businessmen act in accordance with sound economic logic when they avoid committing themselves to an employer-employee relationship with their workers. Having been an adviser to businessmen in his past law practice, Secretary Bello knows that businessmen may be divided into two groups—those who are law-abiding and those who are inclined toward violating laws—and that law-abiding businessmen will have responded to the government’s end-endo drive either by placing on regular status the workers that they can afford to regularize or try terminating the workers that they cannot.
What has Secretary Bello reported to Malacañang regarding the end-endo policy?
Judging from the gradual disappearance of news about endo from the newspaper headlines and the evening television news, it is very likely that DoLE will have reported limited success in getting this country’s business establishments to move from endo to regularization. Whatever success the end-endo drive has achieved has very likely come from the low-lying fruit. It is no secret that the principal target of the end-endo policy has been the very large establishments, especially those in the fast-food business. There has, very likely, been little success with the medium-size and small establishments, which are beyond the reach of DoLE’s limited inspection staff and would be unable to bear the cost of complete regularization of their small workforces.
Like all such exercises, the Duterte administration’s end-endo drive has very probably been a win-some-lose-some game. Regularization has been won for some workers but other workers have lost their jobs. Perfectly good jobs have been lost in order that some workers may gain the SSS and other benefits that their endo status prevented them from enjoying. That is the tragic element of the whole exercise.
In his second SONA Mr. Duterte must inform the nation exactly how many regularizations have been achieved and how many collateral job losses have taken place in order that the Filipino people will be placed in a position to judge whether end-endo has on balance been a good thing.
I think not. Defying economic logic is never good policy.
E-mail: romero.business.class@gmail.com