The American Chamber of Commerce of the Philippines (AmCham) warned that proposed legislation aimed at ending short-term labor contracts could inadvertently stifle foreign investment and weaken the country’s competitive standing in Southeast Asia.

In a statement following a Senate Committee on Labor, Employment and Human Resources Development hearing, the business group urged lawmakers to adopt a “balanced and pragmatic approach” to the proposed Anti-Endo and Magna Carta for Workers in the Informal Economy bills. While the chamber expressed support for protecting workers’ rights and ensuring dignified livelihoods, it cautioned that the current versions of the bills risk creating unintended economic friction.

The Philippines already possesses a comprehensive legal framework governing labor contracting and subcontracting, AmCham said. Rather than introducing new layers of regulation that might lead to “duplication and confusion,” the group suggested that the government focus on strengthening the enforcement of existing laws.

The push to end “endo”—a term derived from “end of contract”—seeks to stop the practice of repeatedly hiring workers on five-month contracts to avoid the legal requirement of granting permanent status and benefits after six months.

However, AmCham argued that legitimate contracting remains a vital tool for companies managing seasonal demand, specialized projects, and service-based work. Overly broad restrictions could discourage business expansion and reduce overall operational efficiency, the group said.

“Workforce flexibility remains essential for businesses to stay competitive and responsive in a rapidly evolving global economy,” the chamber said.

AmCham also raised concerns regarding the Philippines’ position relative to its neighbors in the Association of Southeast Asian Nations. As regional peers compete for the same pool of global capital, regulatory predictability and labor flexibility are among the primary metrics used by investors to decide where to deploy funds. Introducing more rigid labor structures could signal a less competitive environment and place the Philippines at a comparative disadvantage.

The chamber noted that while it remains committed to inclusive growth and the creation of high-quality jobs, any new policy must ensure it does not compromise the very economic development it seeks to support.

The group called for continued tripartite dialogue between the government, labor unions, and the private sector to refine the measures before they are codified into law.