By Louine Hope U. Conserva
and Carmelito Q. Francisco
PRIVATE SECTOR groups in Western Visayas and Davao are urging their respective Regional Tripartite Wages and Productivity Boards (RTWPB) to reconsider minimum wage hike increases, warning that higher manpower costs could make their industries uncompetitive.
The Iloilo Business Club (IBC), in a manifestation sent to the RTWPB-6 on July 9, expressed “strong opposition” to the P13.50 to P41.50 minimum daily pay increase in Western Visayas.
The IBC, composed of business leaders in Iloilo City and Iloilo province representing about 350 establishments from various sectors, said the implementation of the wage hike will compromise the region’s growing competitiveness against more mature regions, lead to instability of prices in Iloilo City, and compel businesses to downsize to prevent losses.
New rates for minimum wage earners in Western Visayas took effect Thursday, July 12.
Wage Order No. 24 calls for daily pay of P295 and 365, including a cost of living allowance (COLA).
Workers in non-agricultural, industrial, and commercial firms with more than 10 employees will receive P365 daily, up from P323.50. Those in companies with up to 10 workers will get P295 from P271.50.
For the agricultural sector, the minimum salary for plantation workers will increase from P281.50 to P295, while non-plantation workers will get P295 from P271.50.
About 3,000 private firms are expected to comply with the order, according to Department of Labor and Employment (DoLE) Western Visayas Regional Director Johnson G. Cañete, also the RTWPB-6 chairperson
Mr. Cañete said there are two considerations in approving the rate adjustments — the poverty threshold and average wage in the region.
Poverty threshold means that workers should not earn below P289 while the average wage, based on the data from the Philippine Statistics Authority, stands at P400.
“If you look at our new wage order, none of the salaries is below P289. And they are also below the average wage which is P400. We have more or less given justification and fairness to our workers and employers at the same time,” Mr. Cañete said.
He added that firms have 10 days upon the affectivity of the wage order to file for exemption.
In last year’s wage hike, two firms applied for exemptions, but both were denied by the board.
Mr. Cañete said the regional board has inspectors who will monitor compliance and violators could face criminal sanctions.
The IBC, in its position paper previously submitted to the board, appealed for a moratorium on minimum wage hikes in Western Visayas, noting that the last increase amounting to P15 to P25 was imposed in March 2017.
The group said the region’s rates are now at par with more developed regions like Davao, Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon), and Central Visayas.
“In terms of affordability and cost of doing business, we can no longer compete with regions who are also bullish over attracting investments in manufacturing,” IBC said.
“Western Visayas is also the region with the highest number of wage increases over the years and most are granted by virtue of petitions. If this annual increase persists, we are projecting an image of instability of prices in the region,” it added.
The club also said the wage board should consider the temporary closure of Boracay Island in Malay, Aklan as a supervening event that has a region-wide impact, with suppliers from Iloilo and tourism-related products and services having been affected.
The IBC gave a counter-proposal of a P7.50 to P10 increase in minimum wage.
“We need a regional economy that has a diversified income stream, skilled and productive workers and a business climate that retains investment,” the IBC said.
In Davao, the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) has asked the government to allow exemptions from wage increases for “ailing industries.”
“To cushion the impact of TRAIN (Tax Reform for Acceleration and Inclusion and production woes), the Government should have established mechanisms for ailing industries to apply for exemption during wage increase,” PBGEA Executive Director Stephen A. Antig said in a press statement on Wednesday.
Mr. Antig said the group has received information that the RTWPB-11 is preparing to issue an order for a daily minimum wage increase of P56.43 next week.
Asked for confirmation, the DoLE Davao office said the RTWPB has yet to release a new wage order.
Mr. Antig said any plan to impose a pay hike is unreasonable as “the move is not well thought of considering that the banana industry itself has also been affected by TRAIN.”
He added that consultations were not thorough as he urged the RTWPB to hold more of these meetings.
The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) filed on March 26 a petition for a P104 daily wage increase across all industries and region-wide.
“The banana industry has been experiencing market and production problems, which makes the adoption of a new wage order anti-productive and threatening,” said Mr. Antig, citing that among the new challenges faced by the industry is the sanctions imposed by the US on Iran, a main market for Philippine bananas in the Middle East.
Another challenge such as a wage hike, he added, may result in retrenchment of workers.
“Specifically the Cavendish banana industry, based on figures from the Philippine Statistical Authority, employs the highest number of workers in the agricultural sector,” he said.
Mr. Antig said the RTWPB-11 must find a “middle ground” through more comprehensive consultations to avoid wage increases that are “untenable and inconsistent with the policy of creating permanent jobs.”