Business groups oppose ‘untimely, unreasonable’ wage hike in MM

Trade groups have appealed to the NCR wage board against any “untimely” and “unreasonable” minimum wage increase in Metro Manila, saying companies have yet to recover from the pandemic fallout and cannot cope with a huge salary hike amid the spiraling cost of operations.

The business organizations made their petition before the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR) during a June 21 public hearing in Pasay City.

The appeal came even as labor groups also presented during the afternoon hearing their reasons for a substantial wage increment.

The RTWPB-NCR heard out various stakeholder opinions and insights as it prepares for an upcoming review of the existing minimum wage in the capital region.

Some of the labor groups sought a P100 daily increase to recover the purchasing power of workers’ wages, while others petitioned for a new P1,161 minimum wage in the metropolis.

The trade associations opposed the requests for a substantial increase, noting it was untimely and detrimental to the recovery of the economy and the survival of most businesses.

Vice president Ma. Flordeliza Leong of the Philippine Exporters Confederation, Inc. (PHILEXPORT) told the gathering that employers, especially those running micro, small and medium enterprises (MSMEs), have not yet recovered from their pandemic-induced losses, and that many MSMEs have already closed down due to the effects of the pandemic.

Leong likewise reminded the RTWPB-NCR that inflation does not only affect consumers but producers as well, as it raises both the prices of consumer goods and the cost of raw materials used in manufacturing. Therefore, inflation hurts consumers and manufacturers alike, she argued.

While stressing that employers understand the plight of workers, Leong also underscored that it is becoming a “vicious cycle” that sees labor asking for a wage hike to cope with rising inflation, followed by commodity price increases as firms adjust to the higher wages, which then leads to another demand for a salary adjustment, and so on.

“Any petition will never be enough kasi saan po kukunin yung pang-increase ng sweldo? Itataas yung presyo. And then mag-pe-petition na naman kasi tumaas yung presyo. I don’t think it will ever be enough. It’s a vicious cycle,” Leong said.

At the same time, she noted how a salary movement would be bad for the Philippines, which is already ranked second highest in the 10-member ASEAN region in terms of wages but is near the bottom of the list in economic performance.

“The Philippines is… the second highest in ASEAN in terms of minimum wage but… in terms of ranking economic-wise in ASEAN, we are at the bottom third,” Leong noted to refute the labor sector’s claim that economies with high wages end up progressive.

Marites Jocson-Agoncillo, executive director of the Confederation of Wearables Exporters of the Philippines (CONWEP), said their group sympathizes with the workers, but she also cautioned that a big salary adjustment would be a setback for the country’s exports.

She attributed the steep decline in the exports of garments, textiles, shoes and bags to a double-digit drop in overseas orders owing to recession and strong competition from ASEAN countries like Cambodia, Thailand, Vietnam, and Laos that she said have the advantages of lower wages and higher productivity.

She appealed to the NCR wage board: “We are not ready now. [If] NCR moves, the rest will follow. We just had an increase last year….”

Meanwhile, a representative from the People Management Association of the Philippines (PMAP) said employers understand the calls for a new round of increase but added that any hike should be reasonable and equitable.

He added: “Wala kaming problema sa minimum wage adjustment pero ang hinihiling lang ng employer sector ay maging equitable at reasonable ang magiging adjustment, hindi very abrupt yung increase na hindi kakayanin ng employer sector….”

The PMAP officer further stated that employers were worried about the fines that await them should they fail to meet the adjusted minimum wage requirement. To avoid this scenario, they would likely resort to layoffs, which would mean more underemployed and unemployed people.

“It is useless to implement the minimum wage hike na so unreasonable and beyond the capacity to pay ng employers kung tatanggalin lang din naman sila [workers] at the end of the day,” he warned.

“Ang hinihiling lang ng management sector is to balance the interests between labor and capital para hindi lang masagad yung mga employers…,” he continued.

The NCR wage board last granted a salary increase to workers in May 2022, the hike taking effect a month later. The current minimum wage in Metro Manila is P570.

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