AN ASSOCIATION of employers said the economy is not yet in crisis due to high inflation but added that its main concern is the potential for wages to rise to an “excessive” degree.
In a statement on Monday, the Employers Confederation of the Philippines (ECoP) said the difficulties experienced by the Philippines are nowhere near Venezuelan levels, but “an abnormal and unfettered rise in prices could also hurt employment and economic development.”
The Philippine Statistics Authority (PSA) said inflation in August was 6.4%, up from 5.7% in July. The Philippines currently has the highest inflation rate in Southeast Asia.
ECoP added: “There is anxiety on the part of business that wage boards might even grant an excessive salary hike to show compassion to labor and shift the burden to employers.”
It said, “Business too is equally affected by the inflation arising from the high cost of production, and the wage boards must be cautioned in granting such a non-correctible salary hike.”
ECoP expects labor groups to file for large wage increases, and added: “Granting such a petition will hurt the very engine that fuels economic growth in this country and will not help the more than 2 million jobless, the self-employed and the under-employed.”
The Associated Labor Unions — Trade Union Congress of the Philippines (ALU-TUCP) said earlier this month that the average daily minimum wage in the Philippines is P338, though buying power has been much eroded.
In June, TUCP party-list Representative Raymond C. Mendoza filed House Bill 7805 or “The Living Wage Act of 2018” which sought an across-the-board wage increase of P320 for all minimum wage earners in the private sector nationwide.
TUCP also filed a petition for a wage increase with the National Capital Region’s (NCR) Regional Tripartite Wage and Productivity Board (RTWPB), which ECoP asked the wage board to dismiss.
The daily minimum wage for NCR is between P475 and P512. The region will mark the anniversary of its last wage action this month, paving the way for another order to be issued.
ECoP said interest rate hikes represent monetary policy levers resorted to by the Bangko Sentral ng Pilipinas (BSP) but dismissed interest rates as a driver of prices of key commodities.
“While BSP is implementing monetary measures to address inflation, the surging price of rice is a purely supply and logistics issue,” ECoP added.
ECoP asked the National Food Authority (NFA) to address rice supply issues, and called for the speedy passage of the rice tariffication bill to liberalize the importation process and increase supply.
ECoP added that the government needs to consider suspending automatic tax increases on petroleum products, a move which “will temper further increases in the cost of transport and power and most importantly, rein in inflation expectations.”— Gillian M. Cortez