Gov’t economic managers reject legislated wage hike

Workers rally in Quezon City seeking a wage hike due to increased prices.

PRESSURE ON PRICES | Workers rally in Quezon City seeking a wage hike due to increased prices.  (Photo by NIÑO JESUS ORBETA / Philippine Daily Inquirer)

MANILA, Philippines — Job losses, higher food prices, and slow economic growth.

These are among the potential negative effects of requiring employers to increase by P150 the daily wage of workers in the private sector, the government’s economic managers told the Senate on Wednesday.

At the Development Budget Coordination Committee budget briefing, National Economic and Development Authority (Neda) Secretary Arsenio Balisacan and Finance Secretary Benjamin Diokno both spurned the proposed legislated salary increase nationwide.

“The proposed P150 [daily wage] increase could bring the country’s inflation rate further away,” Diokno said in response to a question by Senate President Juan Miguel Zubiri.

In addition, the finance secretary said the planned salary adjustment would have a “second round effect,” as it might prompt businesses to pass on their higher operations costs to consumers by raising the price of their products and services.

“That’s our concern,” he said. “We might solve this wage problem, but it would have a bigger impact on the inflation rate. More people would be affected.

Majority not earning enough

Balisacan said increasing the take-home pay of workers would cause the country’s gross domestic product to slow down by .2 to .9 percent while increasing the unemployment rate by .3 to 1 percent.

“These are real data. These are based on the economy-wide information that we have,” the Neda chief said.

However, Zubiri said the government’s economic planners should open their eyes to the reality that the majority of Filipino workers were not earning enough to provide for their families and inadequate income was one of the main reasons skilled workers were leaving the country to work abroad.

“The diaspora [of Filipino workers] that we’re seeing now is because of the low wages,” Zubiri said. “We have to give them a chance. With these [salary] rates now, if we continue with these, you will not find workers for [the government] projects because they will not come back to the Philippines.”

‘More productivity’

According to Zubiri, he was able to speak with several executives of big companies, among them Frederick Go of Robinsons Land Corp. and Kevin Tan of Megaworld Corp., who were supportive of his proposal for a wage hike.

He said even micro, small, and medium enterprises (MSMEs) were also open to giving more to their personnel.

“A P100 additional minimum daily wage will be a welcome respite for our people, [but] not enough to break our MSMEs’ banks,” said the Senate leader.

“I hope that you can sympathize with us,” he said. “I truly believe that if you put in the effort to help our workers, we will have more productivity and maybe we can entice more of them to come home.”

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