Wage review OK, but small firms may find hike high – ECOP

Workers rush to finish thousands of disposable face masks at the EMS Components assembly in Binan, Laguna. (FILE PHOTO BY MARIANNE BERMUDEZ / PHILIPPINE DAILY INQUIRER)

MANILA, Philippines — The Employers Confederation of the Philippines (ECOP) said it had no problem with reviewing the minimum wage, amid the continuing rise in fuel prices and their anticipated impact on the economy, but it warned that smaller enterprises may not be able to afford a pay increase for workers.

Ecop president Sergio Ortiz-Luis Jr. said about 90 percent of businesses in the country are micro enterprises, with 65 percent of employers coming from that sector.

He noted that these enterprises have been facing difficulties since the COVID-19 pandemic, and pointed out further that half of them have shut down and their workers have yet to be rehired.

‘No way that they can pay’

He said he hoped that some of these establishments would reopen now that restrictions have been eased, but added that there was no sign of this happening soon as the pandemic situation remained unstable.

Ortiz-Luis said if these businesses could not afford a wage increase, the government should step in and provide assistance.

“So now the problem is, you know the micro [enterprises] have already been in dire straits, and they could not provide the 13th month pay,” he said at the government’s Laging Handa briefing.

“The micro — there is no way that they can pay it. Some of the bigger ones might, some of them are even paying more than minimum wage and giving many bonuses. That is the problem,” he added.

‘Everybody is affected’

He said the Wage Board, the National Economic and Development Authority, the Department of Labor and Employment, the Department of Trade and Industry, and the Department of Finance “should turn around and ask the government to provide.”

Ortiz-Luis acknowledged that the government has offered loans through its Small Business Corp., the government financial institution that extends assistance to micro, small and medium enterprises.

But many have not availed themselves of that relief option as they did not want to incur debt that they may not be able to repay, he said.

The business leader said the smaller establishments would be hard put to accommodate a higher minimum wage.

He added that raising the minimum wage might cause some companies to increase the prices of their goods and services.

He warned that “if prices increase, everybody is affected, even the informal sector which has no other source of funds to cope with the increase.”

‘Victims of minimum wage’

Ortiz-Luis said only an estimated 16 percent of workers, who are mostly from the formal sector of private and government companies, would stand to benefit from a pay hike, whereas the rest would become “victims of the minimum wage increase.”

The daily minimum wage ranges from P500 to P537 in Metro Manila and from P282 to P420 in other regions. These wages took effect over a span of three years, from 2018 to 2020.

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