Business groups are urging the government to think twice about giving in to workers’ demand to raise the minimum wage rate, as granting this might make the country’s investment climate unattractive.
The Philippine Chamber of Commerce and Industry (PCCI) said it will be ill-advised to approve petitions to hike salaries after the Philippines performed poorly in a global survey on competitiveness.
PCCI Chairman George T. Barcelon said increasing pay will only pull the country down and widen the gap between the Philippines and its rival economies in Southeast Asia.
“The proposed minimum salary increase to P800 would be counterproductive for our country, as competitiveness and foreign investments would be negatively affected. Every year we add almost a million young people—from K to 12 and college graduates—to the work force, and both business and government sectors have difficulty absorbing them,” he told the BusinessMirror.
Barcelon’s sentiment comes in the face of left and right calls—from labor groups to legislators—to increase the nationwide minimum wage, as prices of goods and services continue to surge due to the inflationary effects of the Tax Reform for Acceleration and Inclusion (TRAIN) law and the rising international price of oil. President Duterte has already ordered the wage boards to convene and discuss if it is necessary to give minimum- wage earners an increase.
The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) is pushing for a standard national minimum wage of P800. Also, lawmakers belonging to the Makabayan bloc in the House of Representatives filed a measure that will peg the wages across regions at P750.
For Barcelon, this is unnecessary and will only burden employers, which, he said, might result in the unemployment of future graduates. “The unemployed, both young and middle-aged, have no choice but to seek work as OFWs [overseas Filipino workers].”
“It’s imperative that the wage matter be done through the set process of tripartite discussion and not arbitrary. Otherwise, it results in entitlement only for a limited number, while the majority is greatly affected due to the lack of job opportunities,” he added.
The PCCI chairman said the government must “take note that our unemployment rate and double-digit unemployment rate are still the highest in Southeast Asia.” He added the “bigger picture” must be considered by the tripartite mechanism—government, capital and labor—and that is to have a favorable investment climate.
Sergio R. Ortiz-Luis, president of the Philippine Exporters Confederation Inc., said it is “illogical” for the government to standardize all minimum wages nationwide. He noted this will worsen the poverty incidence in the regions, as investors will pull out their operations there and move it to Metro Manila and other major urban centers, where infrastructure is better.
Ortiz-Luis reminded the government that the lower wage rates in the provinces are “an advantage” for workers and make the areas more attractive to businesses. He added that standardizing wages might make rural areas less enticing to investors.
Labor groups’ appeal
Labor groups on Tuesday called on Duterte to certify as urgent House Bill (HB) 7787, which mandates a national minimum wage of P750.
“We urge the President to certify to Congress HB 7787 filed by the Makabayan bloc as an urgent measure, which will pave the way for the realization of his commitment to labor groups in their dialogues to abolish what he termed as ‘provincial rates’ of wages,” Partido Manggagawa National Chairman Renato Magtubo said in a statement.
Once enacted, HB 7787, or the national minimum wage law, will institute a national minimum wage of P750 and lead to the abolition of the National Wages and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivity Boards (RTWPB).
The bill will then transfer the minimum wage-setting function of the NWPC and RTWPBs to the Office of the President.
Magtubo said they support the measure, citing the failure of regional wage boards—comprised by representatives from the government, employers and labor groups—to grant “decent” wage hikes.
“The most that regional wages board can provide as increase in the minimum wage is less than P1,000 per month,” he said.
Magtubo also appealed to employers to support HB 7787. “A wage increase raises the capacity of workers to uplift their well-being and, at the same time, raises the demand for the production of goods and services.”
“Simply put, increasing wages affects profit in the short term, but sustains the economy that employers profit from in the long term,” he added.
In a separate statement, ALU-TUCP also threw its support behind HB 7787.
ALU-TUCP Spokesman Alan Tanjusay said the initiative will allow workers to cope with the increase in the prices of basic goods and services.
‘Suspend fuel excise tax hike’
The Senate Public Services Committee is poised to endorse the suspension of the imposition of higher excise tax on fuel provided under the TRAIN.
This was disclosed by Sen. Grace Poe, committee chairman, as she confirmed that she has set another public hearing on the effects of the TRAIN law on public service and utilities on Friday.
In a statement issued in advance of Friday’s Senate hearing at the Albay Provincial Capitol in Legazpi City, Poe cited what she deemed to be the “urgency of suspending the collection of additional excise tax on fuel so as to help the public cope with the rising prices of goods and services.”
The senator initially suggested that the Department of Finance consider the option to “suspend the excise tax on fuel contained in the TRAIN law” after conducting a public hearing on the tax imposition in Iloilo on May 25.
Poe aired the appeal after inflation rate hit 4 percent, followed by projections that this will rise to “6 percent in early-July.”
She noted estimates that this would mean “almost P3,000” in additional expenses for workers every month due to the effects of the TRAIN law impositions and the oil- price hike.”
With Butch Fernandez
Image credits: nonie Reyes