PCCI considers regional boards the right venue for setting wages

By Alyssa Nicole O. Tan

THE Philippine Chamber of Commerce and Industry (PCCI) said regional wage boards are the appropriate venue for setting the minimum wage compared to plans in Congress to legislate wage hikes.

“As to wage increases, it is better to have the tripartite of labor, government and management to discuss the matter and decide the amount of wage adjustment,” President George T. Barcelon said in a Viber message.

“They will tackle issues such as inflation, cost of living, reasonable adjustment of different sectors and regions,” he added, “considering job creation and possible retrenchment.”

Senate President Juan Miguel F. Zubiri filed a bill seeking an increase of P150 nationwide, while the three-person Makabayan Bloc at the House of Representatives filed a bill seeking a hike of P750.

Antonio A. Ligon, a law and business professor at De La Salle University, in a text message to BusinessWorld called the legislated proposals “laudable” but added that “the concerns and feasibility on the side of the business sector the entrepreneurs must be carefully weighed.”

“Labor and capital (should seek) a ‘win-win’ situation,” he added.

He concurred with National Economic and Development Authority Secretary Arsenio M. Balisacan that “forcing” wage increase via legislation would damage the Philippines’ competitiveness.

“Legislating or compelling businesses to raise wages will not be good if no corresponding productivity and reasonable investment return to business or entrepreneurs,” he said.

“To balance or avoid the harmful effect of legislated wages, there must be sufficient support mechanisms to the private business sector,” he added. “If we force businesses to increase wages, they might complain, and say it’s akin to confiscation — contrary to democratic free enterprise context.”

On the other hand, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld via Viber that legislated wage increases affect all businesses, industries and institutions, regardless of their situation.

He noted the need to take into consideration “challenging business environments for some businesses and industries, especially those hit hard during the pandemic, competitiveness issues compared to other ASEAN (Association of Southeast Asian Nations) countries on operating costs, among others.”

According to the think tank Ibon Foundation, the gap between workers’ wages and the estimated family living wage continues to widen. As of January, the living wage for a family in the capital region was estimated at P1,161, more than double the region’s minimum wage.

Headline inflation slowed to 8.6% in February from 8.7% in January. This marked the 11th consecutive month inflation was above the central bank’s 2-4% target.

Other than wage increases, Mr. Ligon proposed that the government make farm produce cheaper, provide more incentives and support businesses to help workers deal with the rising cost of goods and services.

He also noted the importance of making Philippine products and services available to the world market, as well as improving and developing the tourism industry.

“These may help reduce the economic hardships brought about by inflation,” Mr. Ligon said.