MANILA, Philippines — Business groups on Wednesday cautioned the government against giving public school teachers an immediate salary increase, recommending instead that the P10,000-a-month raise demanded by a teachers’ group be phased over a period of time.
In a joint statement, six major business and professional groups appealed to the government to delay the salary relief promised, but repeatedly set aside, by President Rodrigo Duterte to the teachers.
The statement was signed by the Makati Business Club, Management Association of the Philippines, Action for Economic Reforms, Financial Executives Institute of the Philippines, Foundation for Economic Freedom, and Philippine Business for Education.
In their appeal, the groups said they appreciated and valued public teachers who “deserve to be compensated better and given better training opportunities and tools.”
But the groups said they did not think that an immediate salary increase was a good idea at this time. They pointed outthat an entry-level public school teacher (salary grade 11) actually received 58 percent more in pay than a private-school teacher.
‘Debunked’ notions
“Education Secretary Leonor Briones acknowledges [that] salaries of public school teachers have ‘overtaken’ those of private schools and debunks characterizations that they are ‘the most pitiful and lowest paid profession,’” the groups said.
“Raising the disparity in pay between public and private school teachers would further fuel the migration of private school teachers to public schools and exert financial pressures on private schools whose tuition fees are regulated by government,” they added.
The groups urged the government to consider the “fairness and equity of public school teachers’ pay compared to other civil servants,” “fiscal affordability and sustainability,” and the “heavy economic and social effects” that go with spending beyond its means.
In a speech in Cagayan de Oro last week, the President assured teachers that after the military and the police, public school teachers were next in line for a wage increase.
The Teachers’ Dignity Coalition earlier called for a P10,000 across-the-board salary raise. The government, however, said that if it were to raise teachers’ salaries by that much, it would be forced to shell out about P150 billion, money it claims not to have.
Bigger than TRAIN revenue
The business groups noted that the P150 billion was already equivalent to about 1 percent of the country’s gross domestic product (GDP). The amount, they said, is also much larger than the P68.4 billion in revenue generated by the government in the first year of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the Duterte administration’s first tax reform package.
“To appreciate the magnitude of this, we note that the entire annual budget for the CCT (Conditional Cash Transfer) program, which benefits 4.3 million households and promises to break intergenerational poverty, will cost less than half of this. The difficult-to-pass TRAIN 1 raised less than half of [the amount],” the groups said.
The government’s annual budget deficit will rise to 4 percent, from 3 percent, if teachers’ wages are increased by at least P10,000 — a prospect that does not augur well for the country’s credit rating, they added.
The groups recalled that in 2002 and 2003, the government’s 4 percent fiscal deficit pulled down the country’s credit rating. In May, the Philippines earned an upgrade to “BBB+”—its highest credit rating in history—from global debt watcher Standard & Poor’s due to the country’s “strong growth trajectory, healthy external position and sustainable public finances.”
Phased adjustment
The business groups said the prospect of increasing teachers’ salaries immediately could hurt the economy in a scenario that even “our public school teachers will also suffer.”
“We fully endorse the proposal of fiscal and education authorities for moderated adjustments in pay which are phased, reflect recent salary adjustments made, benchmarked to the market and other civil service employee comparators, count the benefits of TRAIN 1 on their take-home pay, and are matched by new revenue,” the groups said.