The head of the Employers Confederation of the Philippines (ECOP) clarified that employers are not against calls for minimum wage increase, but he stressed that proposals should be based on reality, not politics, and undergo the proper process through the tripartite wage board.
In a March 3 interview on Light TV, ECOP president Sergio Ortiz-Luis, Jr. denied that the umbrella organization of Philippine employers is opposed to a minimum wage hike, but cautioned that the issue should not be made a political one in light of the upcoming May elections.
“During this election period, people become emotional and political pronouncement sometimes creates false expectation,” he said in a mix of Filipino and English, noting that many politicians are using wage issues as part of their election campaign.
Ortiz-Luis agreed that the current minimum wage is not enough to cope with the high inflation rate, especially as the prices of fuel and commodities continue to surge.
But he said people should be made aware of the fallout from wage hikes without proper review by the Regional Tripartite Wages and Productivity Boards.
He explained that raising the minimum wage would only affect 10% of the total 44 million workers in the country, leaving behind the rest to bear the consequences.
The minimum daily wage in the Philippines varies from region to region; it is set at P537 in the National Capital Region.
“Napakadaling sabihin na kulang yan. Totoo, pero marami namang repercussion pagka yun lang 10% ang in-address mo at di mo in-address yung 90%,” Ortiz-Luis said. (Translation: “It’s easy to say it’s not enough but there are many repercussions if you address only the 10% but not the 90%.”)
“Ibig sabihin tataas yung sweldo ng iba, sumusunod naman ung mga tindahan, yung mga nagbebenta magtataas din sila. Hahabulin din yung tinaas nung minimum wage. Yung 90% naman ng workers, walang paghuhugutan, naiiwanan, lumalayo yung distansiya,” he said.
(“This means that while the salary of others will increase, businesses will also raise their prices to offset the increase in the minimum wage. The other 90% of workers won’t have anything, widening the gap.”)
At the same time, he said that minimum wage and living wage are not the same. Minimum wage refers to the wage that is set to protect new entrants to the labor force, while living wage could go beyond, encompassing benefits such as government assistance and financial input from other sources including other family members.
“Kaya sasabihin mo hindi sapat ang minimum wage para mabuhay ang tao, totoo yun. Mahirap, hindi komportable. Pero hindi yun ang living wage. Maraming pinaghuhugutan para sa living wage, hindi equivalent sa minimum wage yun. Yun ang dapat maliwanagan.”
(“To say that the minimum wage is not enough to support an individual comfortably is true, but it is not equivalent to the living wage, which has more sources. That is what needs to be understood.”)
Ortiz-Luis, who is also president of the Philippine Exporters Confederation, Inc., further pointed to the grim reminder that 90% of enterprises are micro, representing 65% to 70% of the workforce, and that half of these businesses have been shuttered owing to the pandemic and quarantine restrictions, while those still operating continue to struggle for survival.
Ortiz-Luis refused to say what should be the minimum wage or when the wage hike should be implemented.
He said that with the country transitioning to Alert Level 1, what is more urgent is creating more job opportunities.
“Let’s leave it to the tripartite board and let them analyze it and see whether kung magkano itaas depende sa kung anong region. Hindi namin sinasabing huwag,” the ECOP official said.
(“Let’s leave it to the tripartite board and let them analyze and see how much needs to be raised depending on the region. We are not saying don’t do it.”)
“What’s important now is job creation, allowing workers to return to work,” he added.
He said the private sector had set a target to create one million jobs from June to December 2021, but the initiative was delayed by disruptions and restrictions.
So far, more than 600,000 jobs have been created and the sector is aiming for one more quarter to achieve their target, he said.
Ortiz-Luis also underscored the importance of continued cooperation, noting how well management and labor cooperated to overcome pandemic-related challenges, and this helped prevent some companies from going under or laying off their workers.
He said cooperation is even more necessary now as several serious issues, from soaring fuel costs to mass transport shortage, have emerged that are beyond employers’ control and that need to be addressed by the government.
“Talagang kailangan ng gobyerno tumulong. Lalo na yung nagsarang kumpanya na dapat sana mag-ha-hire uli, matulungan yun, mabigyan ng credit, benepisyo (Government needs to help, especially those companies that have closed, they need to be given credit, benefits so they can hire workers again).”