CCCI says: P18 wage hike to hurt MSMEs

CEBU, Philippines — While the business sector has anticipated another increase in wage, the Cebu Chamber of Commerce and Industry (CCCI) believes that the P18 across-the-board raise the Regional Tripartite Wages and Productivity Board (RTWPB) approved Tuesday will affect the micro-small and medium enterprise (MSMEs)

“It will be more challenging for businesses, as it raises the hurdle of hiring more, or maybe expanding their business,” CCCI President Virgilio Espeleta told The Freeman yesterday.

Espeleta said the business sector did not expect the P18 hike, saying some companies, especially those who are still struggling to grow and compete may find this too expensive. He said a P10 increase across the board may have been more reasonable.

Any wage increase, Espeleta explained, affects not the bigger corporations but the smaller ones that are still trying to grow their business.

He said established companies, which comprise only less than 10 percent of the country’s businesses, are already giving beyond what the law requires because the competition in keeping competent employees is too tight.

“You don’t even have to tell big corporations to implement wage increase,” Espeleta said.

The Philippines ranks fifth in countries in Asia that have the most expensive labor cost. This double-digit wage hike may affect the attractiveness of the country to draw investors, Espeleta noted.

What is also disappointing for the business sector, he said, is that it only has one representation in RTWPB, which reportedly does not create a stronger voice in the board.

Meanwhile, Mandaue Chamber of Commerce and Industry (MCCI) past president Philip Tan said any wage adjustment would affect companies that are struggling but the business sector in general has to live with it.

“The board [RTWPB] has always been in a tight spot, both to balance the needs of labor and survival of business that pays the labor sector. We wish to agree that the amount may not meet each side’s expectations. Employers simply have to make the necessary innovations and productivity to augment the yearly wage adjustments,” Tan explained.

The current minimum wage in Metro Cebu is at P386 per day.

In May this year, CCCI released a formal statement expressing its opposition to another round of wage increase.

“In as much as business owners want to give their employees higher take-home pays, it is important to understand that business has never been more challenged than today,” CCCI said.

According to the Chamber, businesses are presently trying to survive, grow and compete in this time of “volatile, uncertain, complex and ambiguous business environment.

CCCI underscored the Philippines’ weak position in competitiveness ranking as it lags behind its other ASEAN counterparts in the ease and cost of doing business.

“We are ranking lower in terms of competitiveness,” the Chamber said, adding, “competitiveness is vital to survive against fierce global competition.”

RTWPB DECISION

RTWPB-7 Chairman Salome Siaton said the new minimum wage in non-agricultural establishments employing more than 10 employees will now be P404.

Meanwhile, the new minimum wage for agricultural establishments employing less than ten employees will be P396.

RTWPB also approved to increase to P5,000 from the current P3,000 monthly salary of house helps in cities and first class municipalities in Central Visayas. House helps in other municipalities in the region will be getting P4,000 per month, or an increase of P1,500 from the current monthly rate of P2,500.

Siaton said the wage order will have to be forwarded to the National Wages and Productivity Commission for review and approval.

From NWPC, it will be forwarded back to RTWPB-7 for publication in a newspaper of general circulation.

"The new wage order will take effect 15 days after its publication. As of now, hindi pa natin alam kung kailan ang effectivity kasi nga i-forward pa ang order sa NWPC (The new wage order will take effect 15 days after publication. As of now, we don’t know when it will take effect exactly because it will have to be forwarded to NWPC first)," Siation said. /JMO (FREEMAN)