By Samuel P. Medenilla & Cai U. Ordinario
THREE regional wage boards, including the Regional Tripartite Productivity and Wages Board-National Capital Region (RTPWB-NCR), have issued new wage orders ranging from P10 to P25 across different sectors in the regions, the Department of Labor and Employment (DOLE) said on Monday.
Both labor groups and employers quickly assailed the orders: the first, calling the amount too small, and the second, saying it will crimp business and erode the country’s competitiveness.
As of the end of October, the DOLE said 16 of the 17 Regional Boards have already issued new wage orders, granting increases in the current minimum-wage rates ranging from P9 to P56.
Only the Regional Board of Caraga (Region 13) has yet to issue but is expected to come out with one once its current wage order reaches its anniversary date on December 8, 2018.
In a press briefing, Labor Secretary Silvestre H. Bello III said minimum-wage earners in Metro Manila will receive an additional P25, making the minimum salary from P512 to P537 in the nonagriculture sector.
“Last October 30, the NCR Regional Board approved a P25 basic wage increase and integration of its existing P10 cost of living allowance [Cola]. Upon effectivity of Wage Order NCR-22, the new minimum-wage rates in Metro Manila shall be P500 to P537 across different sectors,” he said.
Economists weigh in
LOCAL economists believe the P25 wage hike was too small to affect the competitiveness of the country’s labor force against other workers in the Asean but would be enough to increase commodity prices anew.
Unionbank Chief economist Ruben Carlo Asuncion said despite the P25 increase in wages, the Philippine labor force remains competitive in the Asean, especially now with the China-US trade war.
Asuncion said some China-based firms are already studying the possibility of moving to the Philippines, especially in light of the US-China trade war. These firms, he said would rather not deal with additional tariffs imposed by the US.
“I’m sure they are looking at competitive advantages and our labor is definitely more competitive than others in the region. These are some of the probable positive results of the said trade war,” Asuncion said. “[The] P25 [increase] is minimal. This may not be at all inflationary at all. The increase is comparable to other previous increases in the past.”
However, Emilio S. Neri Jr., lead economist of the Bank of the Philippine Islands (BPI) and Cid Terosa, dean of the University of Asia and the Pacific School of Economics, agreed that the wage increase will be inflationary.
Nonetheless, Terosa said, that the wage increase will not be enough to raise the purchasing power of minimum-wage workers. This increase in purchasing power will require the government to “create a stable price environment by implementing measures to curb further price increases.”
“It means it will take a bit more time before inflation returns to target. Our latest estimate is it will happen in the middle of 2019,” Neri said.
Terosa and Action for Economic Reform (AER) Coordinator Filomeno S. Sta. Ana III agreed that competitiveness means more than labor costs. Terosa said it was linked to skill level while Sta. Ana said it was linked to productivity.
Terosa said skilled Filipino workers are competitive against their Asean counterparts, while unskilled Filipino workers are not competitive in the region.
Sta. Ana said high productivity is needed to increase competitiveness. However, while productivity of the local labor force is increasing, wage increases are too small to compensate for this increase.
He said the recent P25 increase in wages was merely an inflation adjustment rather than a real increase. “[The] rise in productivity outstrips rise in wage. So attention should be given to productivity-based wage increases as well,” Sta. Ana said.
Militant labor
REACTING to the wage order, militant labor leader Leody de Guzman lashed out at Bello and the Regional Tripartite Wages and Productivity Board (RTWPB). De Guzman, Bukluran ng Manggagawang Pilipino (BMP) chairman, called it “contemptibly unreasonable” considering that productivity was at record breaking levels in 2017, as reported by Forbes Magazine.
“The order of the NCR wage board, which was openly supported by DOLE Secretary Bello, did not lift minimum wages from starvation levels. Hence, it is a death warrant for 4 million working class families, who would have to wait for another year for the next round of wage orders. Their order condemned us to another year of misery amid forecasts of continuing price hikes and economic slowdown in the coming year,”
He argued that Bello and other labor officials deliberately did not consider the capacity to pay of employers as productivity increased. Forbes Magazine recently reported that the per-capita gross domestic product (GDP) reached $2,891.36 in 2017, which he claimed is remarkably exceptional given that our average for the period 1960-2017 is only $1,627.98.
“Such wage order only fortifies our belief that employers and government officials are in cahoots to cheapen the price of labor, as they both squeeze taxes and profits out of the value-added created by the working class,” added de Guzman, who is seeking a Senate seat in the 2019 polls.
The BMP supported the petition of the group Trade Union Congress of the Philippines for a P334 wage hike during the consultations held by the RTWPB, but insisted that wage hikes should be coupled with policy reforms, particularly price control, so that pay hikes would not be used as an excuse for further increasing in the prices of basic commodities, which are expected to spike during the yuletide season.
NCR board order
BASED on the NCR wage board order, the P25 salary adjustment also covered those in the retail/service establishments employing 15 workers or less and manufacturing establishments regularly employing less than 10 workers, the new minimum-wage rate would be P500 from the current P475 (+P25).
Records showed that so far, the highest wage hike given to workers in Metro Manila was P30 in 2012.
Meanwhile, wage boards in Region 2 (Cagayan Valley) and 4B (Mimaropa) also issued new wage orders raising daily minimum wage from P10 to P20.
In Region 2, the board approved a P10 per basic wage increase and P10 per day Cola on October 22. Upon the effectivity of wage order RTWPB 02-19, the new daily minimum-wage rates will range from P320 to P360, across different sectors.
For workers in Region 4B, a P12 to P20 per day basic wage increase was approved by the board, bringing the new daily minimum wage to P283 to P320 across different sectors upon effectivity of wage order RB-Mimaropa-09.
The wage adjustments will be effective 15 days from its publication in a newspaper of general circulation.
Palace backs order
MALACAÑANG said it supports the decision by the Metro Manila wage board to hike the minimum wage in the area by P25 to aid workers to cope with the rising prices.
In a press briefing on Monday, Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo said the additional wage for Metro Manila workers could be enough to help them cope with the rising prices.
“Well, there’s been a deliberation on the wage board; and apparently, that’s the decision. So let’s see,” Panelo said.
“Perhaps as of—presently, that is what they found out, that’s enough. But I guess it’s always subject to change, depending on the economic conditions,” Panelo added.
With reports by Jasper Emmanuel Y. Arcalas and PNA
Image credits: Roy Domingo