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Employers warn of wage increase repercussions

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Metro Manila’s wage board could come up with a decision as early as next week. -- BW FILE PHOTO

EMPLOYERS’ GROUPS argued before Metro Manila’s wage board in consultations on Wednesday that the hefty increase in daily minimum pay for private sector workers sought by labor groups would hit businesses — especially micro, small- and medium-scale enterprises — hard and will likely cause inflation to spike further.

The National Capital Region Regional Tripartite Wages and Productivity Board held its consultation with the management sector on Wednesday, following the one with labor groups on Monday and ahead of tomorrow’s public hearing for all affected sectors.

Representatives of almost 50 business groups and companies participated in the consultation.

In the face of consecutive overall inflation rates that have lately been hitting multiyear peaks, the Associated Labor Unions- Trade Union Congress of the Philippines (ALU-TUCP) is seeking a P335 hike in Metro Manila’s P475-512 daily minimum wage for private sector workers, while another group, the Association of Minimum Wage Earners and Advocates, is seeking an even bigger P688 increase.

Employers Confederation of the Philippines (ECoP) Governor Antonio H. Abad, Jr. said during Wednesday’s consultation that inflation cannot be the sole reason to increase wages.

“If we are going to increase wages mainly because there is an increase in inflation rate then the inflation rate will go down, will the wages go down? Because as far as wages are concerned if it is given, it cannot be retracted,” Mr. Abad said.

Reynaldo B. Destura, consultant of the People’s Management Association of the Philippines’ Human Resources Management Development Center, said that “[a]ny minimum wage adjustment is a driver of inflation and that has to be considered as well by the board,” since businesses will have to pass on the wage hike to customers by raising prices..

Ernie O. Cecilia, chairman of the American Chamber of Commerce of the Philippines Human Capital and Resources & Communications Committee, agreed that increasing wages has an “inflationary effect” because “hindi lang wages umaakyat but cost of doing business umaakyat (it’s not only wages that go up but also cost of doing business).”

Mr. Cecilia, who also represented the Joint Foreign Chambers of the Philippines, added that drastically increasing wages could also scare investors away.

Kumpara sa ibang bansa, napaka taas ng minimum wage natin (Compared to other countries, our minimum wages are really high),” he said, adding that foreign investors would rather invest in places like Bangladesh and Vietnam because of cheaper labor there.

“It’s like you’re telling the investors, it’s more costly in the Philippines to operate, not it’s more fun in the Philippines.”

ECoP’s Mr. Abad that “[k]ung magi-increase ka ng (If you increase the) wage, the expense of business will go up. So they will throw that back to us consumers so that they will be able to recover what they have paid for the increase in their business endeavor.”

Philippine Exporters Confederation Inc. Assistant Vice-President and Advocacy and Communications Manager Ma. Flordeliza C. Leong said: “We have to strike a balance and look at the plight of enterprises who are employing 55% of the country’s work force”.

ALU-TUCP spokesman Alan A. Tanjusay told reporters after the consultations on Wednesday that employers should stop comparing the Philippines’ daily minimum wage with those of other Association of Southeast Asian Nations (ASEAN) members.

Hindi dapat ilagay sa ganung equation ang ating sahod compared doon sa ASEAN countries kasi hindi namin alam ang condition doon sa ibang bansa (Employers shouldn’t compare our wages to those of other ASEAN countries since our conditions may be different).”

He said other Southeast Asian countries may have lower minimum wages but enjoy subsidies and benefits from the government — for instance to cushion against rising world oil prices — so costs are not passed on directly to the public as much as they are here. — Gillian M. Cortez

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