House looking at wage hike of as much as P400

House looking at wage hike of as much as P400

By Beatriz Marie D. Cruz and John Victor D. Ordoñez, Reporters

THE HOUSE of Representatives is seeking to pass an across-the-board wage increase for workers in the private sector that is higher than the Senate’s P100 proposal, according to a lawmaker.

Congressmen are studying a proposed P350 to P400 wage hike, House Deputy Majority Leader and Iloilo Rep. Janette L. Garin told a news briefing on Thursday, citing instructions from Speaker Ferdinand Martin G. Romualdez.

“The intention is good, but P100 may be too low,” she said, referring to the wage hike bill passed by the Senate on second reading on Wednesday.

“With the high cost of goods, it may not be enough. It’s better if it was higher, similar to what Congress is carefully studying now,” she added in Filipino.

Last year, congressmen filed separate measures seeking a P750 and P150 across-the-board wage increases for private sector workers. These have yet to be heard by the Labor Committee.

Nagkaisa, the country’s largest labor coalition, urged the House to pass its own version of the legislated wage hike.

“The Senate’s P100 wage hike proposal falls short of the P150 originally promised and a far cry from what was needed to save minimum wage earners from the poverty wages imposed upon them by all the regional wage boards,” it said in a statement. “The measure is also for minimum wage earners only.”

The Employers Confederation of the Philippines (ECoP) said raising wages would make it costlier for foreigners seeking to invest in the Philippines.

“We are now the second-most expensive in the region in terms of minimum wage,” ECoP President Sergio R. Ortiz-Luis, Jr. said by telephone. “It might be small, but it surpassed all the original wages to the point that we became one of the most expensive in the region.”

He said microenterprises that closed during the coronavirus pandemic might choose not to reopen if Congress approves the wage increase.

“Let’s rely on the wage boards,” Mr. Ortiz-Luis said. “It’s the most objective way to do it — not politicized and emotional.”

Ms. Garin said the wage increase should be balanced by the capacity of companies to pay since some might be forced to lay off workers or even shut down.

About 99.58% of Philippine businesses are micro, small and medium enterprises (MSME), according to a 2021 study by the Trade department.

Marikina City Rep. Stella Luz A. Quimbo on Monday urged her peers to focus on growth and productivity, noting that a legislative wage increase could fan inflation.

“Companies will pass on their wage increase to prices… A cost-push inflation will happen,” the lawmaker, who co-heads the Committee on Appropriations, told a news briefing. “You will temporarily satisfy our workers who are also consumers.”

Economists said Congress should weigh the effects of a legislated wage increase on small businesses and inflation.

“It really is a balancing act in terms of timing,” Robert Dan J. Roces, chief economist at Security Bank Corp., said in a Viber message, even as he noted that it could boost worker productivity.

“It may be unwise to implement it if the inflationary environment remains precarious, but it may be viable once economic growth is firm and price growth is tamed,” he added.

Mr. Roces said small businesses with limited profit margins would find it difficult to pay higher salaries.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said lawmakers should balance the need to maintain a conducive work environment for growth and ensure a decent standard of living.

“Incentivizing workers to be more productive and increasing efficiency and competitiveness in industries depend on factors such as worker skills, management practices and technological advancements,” he said in a Viber message.

“A higher minimum wage might result in businesses passing on the increased costs to consumers through higher prices, potentially contributing to inflationary pressures,” he added.

Mr. Roces said higher wages would boost worker morale and talent retention but also cause businesses to hire fewer workers.

Inflation eased to 2.8% last month from 3.9% in December and 8.7% a year ago, the slowest in three years.

Federation of Free Workers President Jose “Sonny” G. Matula said the Senate’s P100 wage hike measure could pave the way reforms in the regional wage-setting system.

“It is time to prioritize wage hikes that truly reflect the cost of living and move closer to realizing this constitutional promise,” he said in a Viber message.

A Filipino family of five needs at least P13,797 a month or P460 a day to meet their basic needs, according to the Philippine Statistics Authority.

Metro Manila’s daily minimum wage rose by P40 to P610 in June, much lower than the P570 increase sought by some labor groups.

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