Labor Secretary Silvestre Bello III. (File photo from GRIG C. MONTEGRANDE / Philippine Daily Inquirer)
An increase in the minimum wage to be set by regional wage boards may be expected “within the month” but it won’t push the floor pay to the P750 per day that labor groups are demanding, Labor Secretary Silvestre Bello III said on Tuesday.
“[There will be an adjustment] within the month because the President’s instruction is very clear, which is to address the issue of rising prices,” Bello told reporters in the Senate.
The secretary made the statement a day after the Makabayan bloc of lawmakers filed House Bill No. 7787, which would set a uniform daily minimum wage rate of P750 that would apply to all enterprises regardless of location, size or industry classification.
The lawmakers said the measure was needed given the “exploding impact” of the administration’s Tax Reform for Acceleration and Inclusion (TRAIN) law on the price of basic goods and services. The law slaps an excise on fuel and other goods.
‘Disaster’
The Employers Confederation of the Philippines (Ecop) said the wage increase sought by labor groups “will be a disaster.”
“Rural areas [will] not [be able to] get investments because of [the] high cost of logistics plus a lack of infrastructure. [Meanwhile], urban areas will not be competitive,” Ecop president Donald Dee said in a text message.
Acting Ecop president Sergio Ortiz-Luis Jr. warned that the operations of more than 900,000 micro, small and medium enterprises (MSMEs) in the country would be put at risk.
He said the viability of the MSMEs would be affected by any “dramatic increase” in wages, especially in regions where the minimum pay is lower than that in Metro Manila.
Currently, the minimum wage varies among regions, with that in Metro Manila pegged at up to P512 and that in Autonomous Region in Muslim Mindanao at P255.
Uniform increase
Bello said wage increases would likely vary from region to region, though a uniform raise was also possible.
But the increases would not push the daily minimum pay to the P750 being sought by opposition lawmakers in the House and labor groups, he added.
“That can’t be done … If we do that, instead of getting 12 employees, a company won’t hire anymore,” Bello said.
Bello will meet with officials of the Department of Finance, Department of Trade and Industry, and the National Economic and Development Authority to discuss the proposed wage hike.
“We are going to meet them to find out how we can address their demand for P750 per day. But that has to be passed by Congress,” he said.
The secretary said it was Congress that could fix the national minimum wage. “What we can do to address the spiraling of prices is through the regional tripartite wage board.”
Bello acknowledged that the regional wage boards could only make an adjustment once a year. “But in case of a supervening event that may require immediate action, you can activate our regional wage boards,” he said.
Ortiz-Luis said the “pain of inflation triggered by a wage hike will worsen the plight of the rest of the wage and salary workers.”
As of 2016, 911,768 MSMEs were registered in the country, employing more than 4.8 million workers.
Partido Manggagawa chair Rene Magtubo said a wage increase would cut employers’ profits but would neither put them out of business nor make them poor.
Long-term impact
In fact, he said, the employers themselves would eventually benefit from the wage adjustment.
“A wage increase raises the capacity of workers to uplift their well-being and at the same time raise the demand for goods and services, hence sustaining economic activity and growth,” Magtubo said.
In the short term, increasing wages may reduce profits “but sustains the economy that employers profit in the long term,” he said.
For the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP), employers should see the wisdom behind HB 7787.
For too long, millions of Filipinos have not felt the impact of the economic growth that the country is supposedly enjoying, the group said.
“We urge employers and business owners to listen to the poor’s appeal for equality and not disrespect their struggle for better lives,” ALU-TUCP spokesperson Alan Tanjusay said.
‘Supervening condition’
Ortiz-Luis maintained though that until a “supervening condition” was declared by the wage boards, no new wage order may come out within a year of the last issuance.
In Metro Manila, the last wage increase was implemented in October.
Maria Criselda Sy, executive director of the National Wages and Productivity Commission (NWPC), said the regional wage boards were determining the existence of a supervening condition to allow the issuance of a new wage order.
Among the factors the wage boards were looking to determine a supervening condition were the breaching of the inflation rate target and the “extraordinary increase” in the price of basic commodities in at least three months.
Once these conditions are determined, the NWPC will decide in 30 days if there is basis to adjust wages.