MANILA, Philippines ? If the global economic crisis was the key factor in the wage talks in the past year, the El Niño phenomenon this time could make or break the negotiations for a salary increase, a senior official of the Department of Labor and Employment (DOLE) said.

The prospect of a wage hike this year has become uncertain with the drought brought about by the El Niño weather phenomenon dragging down the productivity and income of companies, NWPC chairman Ciriaco Lagunzad III said.

El Niño usually means lack of rainfall and lesser tropical cyclones for the Philippines. Farmers and agricultural producers all over the country have reported of cracked and dry lands and lack of water for irrigation. Dams generating power and major rivers have reached critically low levels, the government has reported.

The NWPC has been reviewing petitions for wage hike filed in six regions, including Metro Manila, Lagunzad said.

He added that El Niño would affect both workers and employers as it could cut down agricultural yields, power, and water ? all vital ingredients in industry.

As such, it has been putting pressure in the prices of food products and other commodities and utilities, which could lead to the erosion of the workers? income, he said.

?Every time there is an El Niño, the food production declines. It puts pressure in the prices. In the end, it will affect the purchasing power of the workers,? Lagunzad explained.

He noted shortages in sugar and rice production, which forced the government to import these commodities.

There were also reports of drought-damaged crops in Northern Luzon and lack of water for irrigation in the provinces.

In 2009, because of the global economic crisis, which forced many companies to close or cut down production, workers did not file wage hike petitions.

Under the law, there could only be one salary adjustment per year. The last time the daily minimum wage was raised was in 2008.

Even though the United States, the Philippines? largest trading partner, has been recovering from the recession, the country is still ?not fully out of the woods,? according to Lagunzad.

He cited the economic troubles in Europe, where Greece is on the verge of bankruptcy, saying it could drag down the global economy. Europe, Lagunzad noted, is one of the major markets for Philippine exports.

The regions that filed for wage hikes were National Capital Region, Western Visayas (VI), Central Visayas (VII), Zamboanga Peninsula (IX) and Davao Region (XI), and Northern Mindanao (X).

?There will always be the possibility of a decision within the administration for the simple reason that experience tells us that the boards are able to make a decision within 30 to 60 days from petition,? Lagunzad said.

He noted that there might be a decision in some regions by May 1, Labor Day.

Lagunzad also noted that the NWPC could order wage hikes even without petitions if the economic circumstances allowed it.

?Historically, about half of the wage orders were issued what you call motu propio. On the initiative of the boards, they conduct consultations, studies, hearings to find out whether there are already enough grounds to increase wages? so you can expect that (now),? Lagunzad told reporters.

?The (wage) boards are not sleeping? You don?t have to wait and even with the filing of petition in certain areas, the other boards are already activated,? he added.