PH economic team: P150 pay hike means inflation spike, more job losses
MANILA, Philippines — President Ferdinand Marcos Jr.’s administration’s economic managers are firm on their stand against the P150 daily wage increase being pushed in Congress.
As the Senate resumed its discussions on the 2024 national budget on Wednesday, Senate President Juan Miguel Zubiri pressed the economic team to consider his wage hike proposal.
But this was met with opposition from Finance Secretary Benjamin Diokno and National Economic Development Authority (Neda) Secretary Arsenio Balisacan.
“The proposed P150 wage increase could bring the country’s inflation rate further away,” Diokno said during the hearing of the Senate committee on finance.
“And also, that kind of increase will have a second round effect which would mean that wages could be passed on by businesses, industries, and other institutions to consumers. ‘Yun lang po ang concern namin (That’s all we are concerned about),” he said.
Diokno further warned that more people would be affected if the country’s inflation increased because of the wage hike proposal.
Zubiri argued that the wage hike would still return to the economy since workers would spend their money anyway.
“I agree with you. It may increase inflation, but in the long run, if we bring down electricity costs, if we bring down other costs on manufacturing. I think we can temper it. We can manage it,” the Senate leader said.
Aside from the inflationary impact, Balisacan said a P150 increase in workers’ daily pay would slow down the country’s gross domestic product in the first semester of the year.
“And then the unemployment rate would also increase from .3 to 1 percent,” the Neda chief added.
“And worse, the number of unemployed will also increase,” he continued.
Zubiri countered this, saying the country is already losing many skilled workers due to low salaries.
“The diaspora that we’re seeing now is because of the low wages,” he pointed out.
The Senate leader believes there is a need to make a “political stand” on this issue.
“I think the President has a big heart. May puso ‘yung Pangulo natin (Our President has a heart),” Zubiri said. “If he understands that around the region, they’re increasing already their minimum wages, I think he’ll understand there might be the need to make these sacrifices for the people.”
While the effect of the P40 wage hike is “tolerable,” Diokno said the proposed P150 increase would not be “acceptable.”
“Hindi na siya acceptable kasi malayong masyado (It’s no longer acceptable because it is too far off),” he said on the sideline of the Senate hearing.