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The country’s umbrella group of employers has renewed its strong opposition to the proposed ₱200 wage increase, warning of its potential consequences to informal workers and micro, small, and medium enterprises (MSMEs).
Employers Confederation of the Philippines (ECOP) President Sergio Ortiz-Luis Jr. said the legislated hike in the daily minimum wage of private sector workers would only benefit a minority, while leaving the rest at a “serious disadvantage.”
“Nakikinabang ang konti, the minority as against the whole of the majority (Only the minority benefits as against the majority),” Ortiz-Luis said in a recent interview.
On Labor Day, May 1, various labor federations, trade unions, and workers’ organizations urged President Ferdinand “Bongbong” Marcos Jr. to certify the proposed ₱200 wage hike bill as urgent.
Tagging the bill as urgent could ensure the House of Representatives approves the bill on third and final reading.
In response to these demands, ECOP said a big pay adjustment is “inconsiderate” since only 10 to 16 percent of the country’s total workforce stands to benefit from it.
Latest data from the Philippine Statistics Authority (PSA) showed that the country has 49.15 million workers.
Of this amount, Ortiz-Luiz said around 84 percent belongs to the informal sector, which has “no increase to look forward to.”
Further, he said that higher wages would lead MSMEs to incur higher operating costs, which could result in price increases, worker layoffs, or even closures if they can no longer meet the minimum wage requirement.
“In the end, these disenfranchised sectors will have to turn to the government for support to cope with the higher cost of living,” he added.
The ECOP president explained that instead of a hefty wage hike, the government could focus on attracting investments that will create jobs and keep the economy growing.
However, with the Philippines already having the highest wages in Southeast Asia, he said investors are now avoiding the country in favor of its neighbors.
Ortiz-Luiz said it is best to leave the decision on wages to regional wage boards, since they can balance the needs of key sectors.
“Ang wage board pinag-uusapan nila anong kaya ng ekonomiya, anong kaya ng merkado at binabalanse ‘yan. Kaya nga from pinakamababa tayo, unti-unti, taon-taon ay pinakamataas na tayo ngayon dito sa ASEAN (Association of Southeast Asian Nations),” he explained.
(The wage board assesses and balances what the economy and market can take. From having the lowest wages in ASEAN, through small increases annually, we now have the highest salary rates in the region.)
Established under Republic Act (RA) No. 6727, also known as the Wage Rationalization Act, the regional wage boards are tasked with determining the minimum wage in their respective localities to reflect the cost of living.
Since June of last year, 16 regions in the country have implemented wage increases, with 28 wage orders issued so far.
