House not keen on backing Senate’s wage hike

MANILA, Philippines — Officials of the House of Representatives are not keen on supporting the Senate-approved P100 legislated wage hike, citing reasons such as the capacity of employers to implement the measure.

“It’s a good and a popular bill. But if we increase the salaries, the employers should be able to bear and be able to implement this,” Deputy Majority Leader Rep. Janette Garin pointed out at a news briefing yesterday.

“The problem in our country is that 98 to 99 percent of our business sectors are MSMEs (micro, small and medium enterprises). So, the question begs to be asked: how many businesses are going to shut down because of this?” Garin asked.

She then posed the possibility of streamlining personnel if only to comply.She explained that salaries of all workers are sourced from private funds, not from government coffers, noting that state workers only account for 1.6 million of the country’s total workforce.

Economist Reps. Joey Salceda and Stella Luz Quimbo, along with Deputy Speaker David Suarez, are not also keen on approving the bill, citing the same reasons put forth by their colleague Garin.

“We already have a workable arrangement with the regional wage boards. We cannot say that this is not responsive. There is no unintended consequence. If only we are to divide the giant firms, that may work. But this will affect the MSMEs, they won’t be able to afford that,” Salceda said.

Quimbo, for her part, declared, “Companies would just pass on the additional cost to the prices of goods and services, so we will have an inflationary problem.

“We will have cost-push inflation. Yes, you will temporarily satisfy our workers, who are also end-consumers. But eventually, the raise in their salaries will be eaten up by high prices,” she said.

Suarez said the issue of having a bigger economy has to be addressed first to have more money, more industry players, and more maneuverability in terms of labor laws and practices.

Labor Secretary Bienvenido Laguesma noted that DOLE is not against any effort to increase the purchasing power of workers employed in private companies but stressed the need for a thorough and careful study of the proposed legislated salary hike.

Aside from 4.2 million minimum wage earners, Laguesma said another eight million workers receiving higher pay may also benefit from the legislated salary hike due to wage distortion.

“This needs careful analysis because this will have an effect on our employment level, inflation rate and our target GDP growth,” he pointed out.

The recent wage hikes granted by the different Regional Tripartite Wages and Productivity Boards (RTWPBs) nationwide, he said, were a product of consensus and only had minimal impact.

Even without a law, he said, workers may still enjoy an across-the-board increase by way of collective bargaining agreements.

Employers buck legislated wage hike

The Philippine Chamber of Commerce and Industry, meanwhile, sees the proposed measure hurtful for MSMEs as it may lead to the reduction of their workforce or even closure.

“Not to mention that 84 percent (of workers are) not covered by minimum wage because they have no employers. These are the farmers, fisherfolk, tricycle drivers, jeep/bus drivers, vendors, etc,” PCCI president Enunina Mangio told The STAR.

Employers expressed opposition against the proposed measure, noting that wage hikes should be an objective judgment of the RTWPBs.

“At the very least, the wage boards where government, labor and employers are represented are guided in their decision to adjust minimum wages by objective parameters following consultations and public hearings,” several business groups said in a letter addressed to Senate President Juan Miguel Zubiri.

The business groups said informal workers will not benefit whatsoever from any legislated wage increase, noting that they will be even more hurt by the higher inflation rate resulting from the proposed legislated minimum wage increase.

They added that the sudden imposition of a significant national wage hike would place an unprecedented burden on businesses, particularly on MSMEs, many of which are still reeling from the aftermath of the COVID-19 pandemic.

Instead of focusing on wage increases, the groups urged policymakers to adopt a more comprehensive approach to addressing economic inequality.

“This includes investing more in education, skills development, and infrastructure, as well as creating an enabling environment for business growth and job creation,” the business groups said.

The letter was signed by PCCI, Employers Confederation of the Philippines, Philippine Exporters Confederation Inc., Federation of Filipino Chinese Chambers of Commerce and Industry, IT & Business Process Association of the Philippines, Management Association of the Philippines, the Philippine Retailers Association, Philippine Franchise Association and Semiconductor and Electronics Industries in the Philippines Inc.

Other signatories include Philippine Association of Legitimate Service Contracts Inc., Philippine Constructors Association Inc., Philippine Food Processors and Exporters Organization Inc., Philippine Hotel Owners Association, American Chamber of Commerce of the Philippines, People Management Association of the Philippines and the European Chamber of Commerce of the Philippines. –  Mayen Jaymalin, Catherine Talavera