P150 nationwide minimum wage hike will not cause extensive economic disruption — IBON head

THE PROPOSED P150 across-the-board minimum wage increase would not be extensively disruptive to the Philippine economy as it would mean less than a 15% cut in profits for businesses overall and cover just 17% or about 8.4 million workers in formal employment, an economist said on Sunday.  

IBON Foundation Executive Director Jose Enrique A. Africa said these initial impact estimates of the legislated nationwide wage hike are based on their computations using 2020 data by the Philippine Statistics Authority.  

“A meaningful wage hike that not only keeps up with inflation but also improves the welfare of workers and their families doesn’t have to be inflationary if only employers were more open to accept a cut in their profits and don’t pass this on to consumers as higher prices,” Mr. Africa told BusinessWorld via Viber.   

Senate Bill No. 2002, which calls for a P150 minimum wage hike nationwide for all sectors, was “approved in principle” last week and is currently being fine-tuned by a technical working group, Senate President Juan Miguel F. Zubiri said.  

Mr. Zubiri previously said that a legislated wage hike is necessary due to the slow and insignificant increases set by regional wage boards.  

The Employers Confederation of the Philippines (ECoP) said last week that a legislated wage hike must also consider workers in less formal employment, noting that workers in private companies only make up 16% of the labor force.  

Mr. Africa, however, said increasing wages in the private sector “will actually have second order effects and redound to many self-employed and informals in communities that workers will spend their additional earnings on.”  

Rogelio Alicor L. Panao, a political science professor at the University of the Philippines, said in a video interview that the government should also focus on “guaranteeing that costs which workers will spend their salaries on will be lessened” by curbing prices of basic goods and services.  

LONG-TERM SOLUTION
Mr. Africa added that “persistent agricultural and industrial backwardness” keeps wage rates low.  

“The long-term solution is for the government to more actively intervene to protect and support local farms and Filipino firms — exactly as all the developed countries have done in the past to develop,” he said, citing examples of advanced economies like the United States, China, European Union member states, and Japan.  

Mr. Africa emphasized Congress’ role in mandating wages to ensure equitable distribution of income within the context of the country’s level of economic development.  

“Wage-setting today is overly determined by employer preferences and new legislation is needed for the government to perform its responsibility to uphold worker welfare,” he said.  

A “system that institutionalizes a national minimum wage according to the Constitutional exhortation for a living wage” is also needed, he said.   

“This is also the way to reorient thinking towards treating employees as co-producers of economic wealth with employers rather than mere inputs to production whose costs should be minimized.”  

NURSES
Meanwhile, the Federation of Free Workers (FFW) on Sunday urged Congress to pass measures that would increase the salaries of nurses as well as address the country’s deployment cap.  

“If we don’t address these issues on wages, deployment cap, etcetera now, we risk losing our nurses to countries where they can earn in one month what they would earn in ten years in the Philippines,” Manuel Payao, union president of the University of the East Ramon Magsaysay Memorial Medical Center Employees Union-FFW, said in a statement.  

It added that the 7,500 limit on those who can leave the country is “neither sustainable nor constitutional.”  

A measure in the lower chamber, House Bill No. 5276, seeks to increase the minimum base pay of nurses to salary grade 21 under the Salary Standardization Law, which is equivalent to 63,997. — Beatriz Marie D. Cruz