MANILA, Philippines—The granting of wage increases to cope with the rising prices of commodities is not on Malacañang’s priority list, in the midst of fears the US financial crisis that could hit the Philippines.

President Gloria Macapagal-Arroyo on Monday veered away from the idea, saying the government was doing everything to prevent a wage spiral.

“We’ve been working hard on all fronts to manage inflationary pressures, to provide a safety net to those hit harder by these global developments,” she said in a speech before members of the Semiconductors and Electronic Industries in the Philippines (SEIPI).

Ms Arroyo said the government was working on making the prices of food, oil and transportation affordable “to avoid demands for a wage spiral,” a cycle involving increases in salary to cover price hikes.

But a wage increase essentially triggers a rise in production costs, eventually leading to more price increases.

Sought for comment, Trade Secretary Peter Favila said the pronouncement was not necessarily a “signal” that Ms Arroyo was shooting down demands for a wage increase in light of the global financial storm.

“The President does not direct the DOLE (Department of Labor and Employment) or the labor sector to determine the wage level,” he told reporters on the sidelines of the 10th SEIPI anniversary in Malacañang.

Favila said Ms Arroyo’s position against a wage spiral was in the context of the cost of goods presented in the gathering by members of the semiconductor and electronics industry.

“The President has no statement to the effect on whether there’s a wage adjustment or not,” he said. “Let us not put any undue interpretation on what the President has said.”

“Our economy is strong enough to weather the international financial turmoil,” Ms Arroyo told SEIPI members. “Against the gale-force winds of the global economy, we remain bullish about our country and your industry.”

At the gathering, industry leaders admitted they saw zero-growth rate this year because of the US financial crisis, America being a leading market for Philippine electronics exports.

“The impact of the US economic crisis will work its way through all facets of global economies in the coming months,” Arthur Young, SEIPI chair, said in his presentation.

Still, Ms Arroyo was confident the electronics industry would eventually pick up, as it did in 2001 when it registered a negative 21-percent growth rate.

Favila said he was set to meet with five top electronics manufacturing companies in Taiwan to convince them to set up plants in the Philippines.

In January next year, industry giant Texas Instruments will open its local plant.