With labor organizations pressing the administration of President Rodrigo Duterte on his campaign promise to end contractualization, the president earlier this week admitted to difficulties in ending the practice, citing both the limited number of businesses operating in the country and recognizing the rights of business owners.

Duterte said the government cannot “make it hard” for businesses to operate freely, noting, “That’s their money.”

He added, “There are few businesses to absorb the human resource.”

Contractualization requires employers to acquire employees through an agency, who are contracted to work for a period time, often times, six months. At the end of the contract period, they are then replaced by a new batch of contracted workers.

Many urging the administration to end the practice are concerned with job security, with some wishing to use that tenure of employment to organize as labor unions.

Cherrylin M. Javier, assurance partner for PricewaterhouseCoopers Philippines, penned an article on the issue, where she expressed concern over the possibility of increased unemployment if contracted employees are made into regular employees, pointing out the limited resources some companies have.

“Ending [contractualization] may eat up company resources,” she wrote. “A regular employee may have to contend with the company’s reallocation of resources among its larger number of regular employees.”

However, she added, if the addition of “regularized” contracted employees ushers in better productivity, the company may have additional resources to accommodate for more workers./PLL, WDJ