P350 wage hike to hit biz sector hard–employers

APPEAL FROMTHE POOR Members of urban poor groups, in this January 2023 photo, stage a protest in front of Commonwealth Market in Quezon City to air their appeal for an increase in daily wage amid the soaring food prices. —NIÑO JESUS ORBETA

Employers on Monday assailed the latest wage hike push brewing at the House of Representatives, warning that any proposal pushing for an even higher increase than the P100 approved by the Senate would lead to more disastrous consequences.

Sergio Ortiz-Luis Jr., president of the Employers Confederation of the Philippines (Ecop), told the Inquirer that the impact of the proposal at the House, particularly a bill seeking a P350 increase in the minimum daily wage for all private sector workers, would cause a steeper increase in the country’s inflation rate.

“For the P100 wage increase from the Senate, we’ve already estimated that it will actually lead to a 2 [percentage point increase in] inflation,” Ortiz-Luis said in a phone interview, warning that the House measure would raise this by 7 percentage points or more.

“This P350 wage hike, this means goodbye to the Philippines for investors,” he added, citing that many investors who they have talked to have postponed expansion plans or ventures pending the resolution of this matter.

The Ecop official said that a P350 wage hike undoubtedly would lead to the closure of many micro, small and medium enterprises (MSMEs) since many would be unable to cope with the additional expenses that an increase of such magnitude would cause.

“When these lawmakers downplay the impact of a wage hike and say that it will only lead to less profits for businesses, that is only true for large and, maybe, some of the medium companies,” Ortiz-Luis noted.

“For the micro enterprises, which are 90 percent [of the total economy], a wage hike this high is too much,” he said.

Ortiz-Luis also reiterated that any wage increase in the formal sector would benefit only about 16 percent of the country’s 50-million strong workforce, leaving the remaining 84 percent or 42 million workers in the informal sector struggling with the resulting consequence of higher consumer prices.

“They would be favoring the minority at the expense of the 84 percent. The collateral damage here will be the whole economy,” he pointed out.

Labor Code revision

Earlier on Sunday, House Majority Leader Manuel Jose Dalipe said in a statement that lawmakers in the lower chamber had arrived at a consensus that the Senate-approved P100 wage adjustment was insufficient to meet the needs of workers.

At a press conference on Monday, House committee on labor and employment chair and Rizal Rep. Juan Fidel Felipe Nograles said his panel would be tackling measures involving two approaches to make the country’s minimum wage earners get higher take-home pay—a legislated across-the-board wage increase and the establishment of a national minimum wage rate, doing away with regional wage boards by amending a provision of the Labor Code of the Philippines.

“When it comes to labor [issues], it should be tripartite. We have to listen not only to the workers, although it’s beneficial to them; we need to listen to its effect on the economy, to investors, employers and the Department of Labor and Employment,” he pointed out.

According to the lawmaker, there were three pending bills for a legislated across-the-board wage increase in his committee: P150 wage recovery under House Bill (HB) No. 7871 filed by Deputy Speaker Raymond Democrito Mendoza; P150 across-the-board wage hike under HB 514 by Cavite Rep. Ramon Revilla III; and P750 adjustment under HB 7568 filed by the Makabayan bloc.

Thorough study

Meanwhile, there are at least six bills for the establishment of a national minimum wage rate, amending Articles 121 to 127 of Republic Act No. 6727, or the Wage Rationalization Act, to do away with the power of the regional wage boards to set the minimum pay for each region.

House Bill Nos. 525, 111, 3308, 4898, 4471 and 1579 seek to set up a national wage board to deliberate on possible pay increases.

Nograles assured the public that the committee would not unduly hasten the process and would listen to all sectors.

He pointed out that Speaker Martin Romualdez’s instruction was to thoroughly study the proposed measures because any minimum wage hike might be inflationary and create wage distortion among companies.

The lawmaker added that without a complete scrutiny of the wage hike measures, it was possible that employers would pass on to consumers the cost of raising the minimum wage, make retrenchments, or even close shop.

Some senators appeared lukewarm to the House’s move for a bigger wage hike.

“If you ask me, P100 is really low. My proposal was originally P150, but of course, we also have to think of the employers as they might go bankrupt,” said Sen. Ramon Revilla Jr.

READ: House eyes bigger wage hike of up to P350 a day

Sen. Francis Tolentino said employers and companies should be consulted regarding the proposals in Congress.

Still, Sen. Francis Escudero welcomed the move of the House, saying “it is nice to see that things are moving forward not only for the Filipino workers but also for both houses of Congress.”

The Senate committee on labor chair, Sen. Jinggoy Estrada, said: “I will adopt their bill if it’s more than P100.” —WITH A REPORT FROM TINA G. SANTOS INQ