Duty-Free retrenchment postponed for 2 months

MANILA, Philippines — The government has decided to delay for two months the planned restructuring of the Duty Free Philippines Corp., which would result in the loss of jobs for hundreds of workers.

The Governance Commission for GOCCs (GCG) has approved the request of Duty-Free, an attached agency of the Department of Tourism, to temporarily put off the implementation of the restructuring plan for 60 days.

It was in November last year when the government announced the move to rightsize and restructure Duty-Free after the heavy losses it incurred during the pandemic.

The restructuring plan would mean the displacement of workers estimated to reach over 700 out of the nearly 1,000 employees deployed in its corporate office and airport terminal stores nationwide.

Two weeks ago, some 500 employees received their notices of separation.

GCG explained that the decision to postpone the restructuring was made for Duty-Free to prepare for the transition to the new organizational structure and staffing pattern.

While it approved the deferral, GCG chairperson Alex Quiroz said the decision could still have a negative effect on the ongoing status of Duty-Free given its limited fiscal space.

Treasury data showed that the government provided some P34 million in subsidies to Duty-Free last year.

“We understand that Duty-Free may need more time given that the restructuring plan may have certain repercussions in policies and core operations,” Quiroz said.

“We take into consideration the inputs of the employees union and other government agencies concerned. The deferment will be granted to give way to a streamlined transition that will be beneficial to all concerned,” he said.

Under the Government Owned and Controlled Corporation Governance Act of 2011, the GCG is mandated to ascertain whether a GOCC should be reorganized, merged, streamlined, abolished, or privatized, in consultation with the department or agency to which the GOCC is attached.

As a government corporation, Duty Free is tasked to operate the duty-and tax-free merchandising system in the Philippines to augment the service facilities for tourists and to generate foreign exchange and revenue for the government.