EXPORTERS said high wages in the National Capital Region (NCR) will pose an “additional burden” on top of the possible loss of incentives under tax reform, noting that worker pay is already uncompetitive relative to the region.
“If there is an increase in minimum wage, that would be an additional burden on the part of exporters considering that we are already struggling with the TRAIN law and our competitors,” said Confederation of Garment Exporters of the Philippines Inc. (CONGEP) Legal Counsel Jesus Gabriel C. Domingo on Wednesday.
He was referring to the tax reform program known as Tax Reform for Acceleration and Inclusion (TRAIN), the second iteration of which proposes to rationalize investment incentives while reducing corporate income taxes with a view to getting all companies — those enjoying incentives and those that rely on them less — to eventually pay as uniform a tax rate as possible.
Mr. Domingo said the Philippines’ average minimum wage is already among the highest in Asia, eroding the Philippines’ competitive advantage.
“We are not just competing with fellow Filipinos but also with other countries. Our minimum wage is way higher than that of other countries,” he said.
According to the National Wages and Productivity Commission’s (NWPC) comparative data of wages in selected countries as of Sept. 12, Metro Manila minimum wage earners in the private sector earn P475.00-P512 or $8.88-$9.57 a day.
In the regions, Philippine minimum wages start at P303 or $5.67, according to NWPC data.
On Wednesday, Joint Foreign Chambers of Commerce of the Philippines representative Ernie O. Cecilia told the NCR wage board that investors would rather invest in the cheaper labor on offer in Bangladesh and Vietnam.
According to the NWPC, Bangladesh has the lowest minimum wage in the region at $2.13 while Vietnam pays $4.77-5.39.
Amid demand for a wage increase due to high inflation and eroded purchasing power, Mr. Domingo said “Maybe the timing is not right or appropriate” for an NCR wage hike.
“We have around 62,800 workers,” he added, noting that many of these are at risk of possible job losses if employment costs rise significantly due to a wage increase.
The NCR wage board will mount its public hearing today after it consulted with the labor sector on Oct. 22 and the employers on Oct. 24. The board can act on wage levels after the first anniversary of its last wage order, which fell on Oct. 5. — Gillian M. Cortez

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