Due mainly to its steady labor supply, the Philippines is seen as an investment destination in growth industries like information technology and higher-value added manufacturing especially electronics, Labor and Employment Secretary Patricia A. Sto. Tomas said.

Speaking before members of the Australian and New-Zealand Chamber of Commerce in the Philippines early this week, Sto. Tomas expressed confidence that the country will be competing vigorously as a growth destination for private sector and foreign investments.

Sto. Tomas underscored the role of the private sector investments in job creation. Even public infrastructure development is also seen to be a major job generator, she said adding substantial private sector participation is expected under various build-operate-transfer, build-operate-own, and other turnkey arrangements.

The labor and employment secretary remarked, however, that meaningful private sector investments and participation is possible only if appropriate governance systems have been set in place stressing that “the government is determined to make this happen with the help of the private sector.”

According to her, the country has taken critical steps to improve further the institutions and legal infrastructure for both corporate and public governance even as the Calpers gave the Philippines a favorable rating as an investment destination and acknowledged the reforms President Arroyo has been pushing toward improving governance and strengthening the country’s economic and political foundations.

She said the reforms underscored the President’s blueprint of development for the next six years, the Medium Term Philippine Development Plan (MTPDP) for 2004-2010, adding the plan has specified reforms at improving the governance system for employment and industrial relations to help achieve its overall target of six million to 10 million jobs in the next six years.

Part of the strategy, she said, is to make our labor market institutions more adaptive to market-driven challenges and to promote harmonious and cooperative labor management relations. Towards this end, she said the labor policy is geared at preventing labor disputes by promoting plant level communication, productivity, and mutual respect for labor standards.

The role of the government, according to her, is to conciliate and mediate, and as a last resort to arbitrate on employment disputes. In this regard, the country’s dispute settlement machinery is inclined toward social partnership, collective bargaining and shared responsibility through grievance resolution, conciliation, and mediation.

Sto. Tomas noted that social partnership such as labor management cooperation and alternative dispute resolution such as conciliation, mediation, and voluntary arbitration are less costly and more expeditious. Compulsory arbitration, on the other hand, has proven to be adversarial, expensive, and susceptible to delays, she said.

Alternative dispute resolution enables economic reasons to prevail in labor decisions linking industrial relations and employment creation, she said indicating that a peaceful industrial climate is essential in business growth and subsequently job generation.

As of now, Sto. Tomas said the country is enjoying a stable labor relations climate with the continuous decline in the incidence of strikes and lockouts. “Last year, we only had 25 strikes, 34% lower than the 38 cases declared in 2003. This year, we have been so far strike-free,” she said.

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