MANILA, Philippines - President Benigno Aquino III on Friday urged Filipino-Chinese business leaders to increase the salaries of their employees to help spur economic growth.
At the 30th Biennial Convention of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., Aquino said limiting workers' wages could reduce the economy.
"Not too long ago, the idea of maximizing profits was all about cutting down costs. And since a lot of the products we manufacture have labor as a primary value added component, cutting down costs meant keeping wages as low as possible," Aquino said.
"I submit, however, that this has the net effect of keeping the economy very small. After all, workers in large part are also consumers and by limiting their wages, one also limits the purchasing power of the market," he added.
Aquino said the true path to sustained profit and growth lies in empowering workers.
"Increasing their disposable income increases demand and therefore increases competition. It logically follows that this pushes companies to strive for greater productivity and efficiencies," he said.
The president believes that this approach will lead to a win-win situation for both management and employees.
Aquino recalled that during his time in Congress, he proposed a measure that called for businesses to share part of their net new profits with their employees.
Aquino said he does not expect such measure to be passed soon but he hopes that companies would take the initiative.
"Make the effort to give your employees a little more and it will serve to drive them to be even more productive," he said.