Philippines: Latest socio-economic and regulatory developments

published on May 24, 2018

The Philippines continue to perform an outstanding economic growth, ranking among the fastest growing economies in Asia. In an effort to keep this positive economic momentum up, the Philippine government is constantly working on a contemporary and investor-friendly regulatory environment. As a remarkable side effect, social security, tax and labor-law regulations are currently also being revised. 
 

 
German-Philippines agreement on social security

On 17. January 2018 the Senate of the Philippines ratified the social security agreement with Germany. The Agreement will become effective starting from 1. June 2018. The bi-lateral agreement follows mainly the standards set by the International Labour Organization and reflects the steady growth of economic, cultural and diplomatic cooperation between the 2 countries. It provides for equal treatment of individuals covered under the convention with nationals of the other contracting state and facilitates in particular the portability of employees and benefits between the two countries. For example, Art. 7 provides that if an individual employed in one contracting state is temporarily seconded to the other contracting state, generally the social security legislation of the first state shall apply to such individual within the first 48 month of such assignment.
 

Divorce bill

The Philippines is the 4th largest Christian county on earth where about 80 percent of its population is Roman Catholic. It is also one of the last remaining countries where the state denies formal divorce proceeding to its citizens – leading to a large number of annulment proceedings, illegitimate child issues and other pain and stress resulting from irreparable marriage problems.
 
On 19. March 2018 the House of Representatives approved the House Bill 7303 (also the Absolute Divorce Bill) which may establish a process for “irremediably failed marriages” comparable to the majority of countries. However, the Bill needs to pass also the Senate where it faces a strong opposition and also the President of the Philippines addressed his concerns.
 

Expanded maternity leave bill

The number of days of maternity leave were last increased by the Philippine Congress in 1992. Currently women who have undergone a normal childbirth qualify for a 60 days paid maternity leave (78 days if the delivery was by Caesarian section), one of the lowest in ASEAN. The Expanded Maternity Leave Bill, which is meant to increases the general eligibility to 100 days paid maternity leave and an additional 30 days optional unpaid leave, was already approved by the Senate in on 6 March 2017. However, the response of the House of Representative before the law may be enacted is still pending. Some of the House representatives have generally shown their support and a decision may be expected within the next quarter.