Labor group Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) will demand an across-the-board wage increase nationwide if prices of basic commodities and services skyrocket due to the implementation of the new tax law.
In a statement on Wednesday, the ALU-TUCP announced it would file a petition for a substantial increase in the minimum wage nationwide to allow workers to cope with the price hikes triggered by the Tax Reform for Acceleration and Inclusion (TRAIN). The TRAIN is the first package of the Duterte administration’s comprehensive tax-reform program (CTRP) that took effect on January 1.
“We will indeed file a petition for wage increase if there are extraordinary increases in prices of basic commodities, such as rice, fish and vegetables, and if there is excessive surge in cost of services, such as transport fare, tuition fees, electricity and water rates,” ALU-TUCP Spokesman Alan A. Tanjusay said. “If the situation warrants, we will file the petition for workers to cope with rising cost of living, even if the one year prescribed for no-wage-increase period set by the wage board is still in effect.”
Under Section 3, Rule 4 of the National Wages and Productivity Commission Revised Rules of Procedure on Minimum Wage Fixing, a wage order may not be disturbed within 12 months from effectivity. On top of this, the wage board is not allowed to entertain petitions for wage increase within the same period.
The last time the wage board approved a wage increase was last September, when Metro Manila workers were granted additional P21 that elevated minimum wage in the Philippine capital to P512 for nonagricultural workers and P475 for agricultural workers. However, the rule may be sidelined should there be a supervening condition—particularly an increase in prices of petroleum products and basic goods and services—that warrants the review of minimum-wage rates.
Under the TRAIN, workers with a gross annual income of P250,000 and below are relieved from paying personal-income tax (PIT). Minimum-wage earners, on the other hand, will continue to enjoy exemption from paying PIT.
In exchange, the government will slap excise tax on oil of up to P6 over the next three years: P1 this year, P2 next year and P3 in 2020. The TRAIN will also impose a P6 per liter tax on drinks containing caloric and noncaloric sweetener and a P12 per liter tax on beverages with high-fructose corn syrup, though essential sugar-sweetened beverges, such as 3-in-1 coffee and milk, are exempt from these taxes.
The new tax law also increased excise tax on coal from P10 per metric ton to P50 per MT this year, P100 per MT next year and P150 per MT in 2020. This will lead to an increase in prices of electricity, though Malacañang claimed it would be a manageable hike. “All we can do for now is put our ears close to the ground and monitor the impact of the TRAIN Act to the inflation,” Tanjusay said. If proven hurtful to the poor, he said their group could all at once file the wage-increase petitions through the 17 regional wage boards, or through an emergency legislation through the House of Representatives.
Tanjusay vowed that the ALU-TUCP will study the actual impact of the TRAIN to the poor and will submit a recommendation to Malacañang, whether to improve or modify the law, postpone it or nullify it altogether. The last across-the-board wage increase nationwide was in 1989.
The labor leader also took a swipe at the P200 monthly cash transfer distributed to the poorest 10 million households intended to offset the impact of the new tax law. “Where is the money sourced from, what government agency is in charge of doling out? Where are the doleout implementing rules and regulation? Where are the terms of reference? Who are the qualified beneficiaries? And when, if ever there is, the dole out would be disbursed?” he said.
“If not addressed, the brewing social storm would create bigger and wider poverty among our people. Workers are already burdened with preexisting bad conditions and encumbered with traffic congestion and high cost of living. The unclear, if not inadequate social safety net, will offer no hope for workers in coping with rising inflation,” Tanjusay added.
In a news briefing, Presidential Spokesman Harry L. Roque Jr. said the government is still in the process of creating a technical working group tasked to distribute the P200 monthly cash transfer. “Now the cash grant will be distributed between January to July and a technical working group is now being held in preparation for the timely release of this cash transfer,” he said.
He also reminded oil companies to not impose the additional excise tax on old inventories of fuel products. “They are to be imposed on new deliveries still to be made; meaning that inventories that already exist should not be subjected to the additional excise tax.”
Duterte last December signed into law the first package of his administration’s CTRP. A hefty chunk of the TRAIN’s revenue will be allocated to the government’s infrastructure program, while a portion of it is to be spent on social services.