The government assured the business sector that it will not support a P125 across-the-board salary increase as proposed by the labor sector.
Trade Secretary Ramon Lopez said the exporters group, employers’ association and manufacturing companies were “appeased” after learning that the government was not supporting a huge wage increase.
“This is unrealistic. We are trying to be competitive in the world market then all of sudden, we’re increasing wages. Our position at the Trade Department is no to wage hike,” he said.
A study by National Economic and Development Authority said a proposed across-the-board pay increase of P125 would have inflationary effects.
Inflation is estimated to rise 5.5 percent from less than 2 percent in August if the suggested wage hike is imposed.
The same study said the salary increase would result in a one percentage point drop in the country’s gross domestic product and a one percentage point increase in unemployment.
Several exporters this early have threatened to close shop if the the wage proposal was approved.
“It is daunting scenario if investors will be scared away because of wage issues.” Lopez said. He said wage hike issues should be tackled by regional triparite wage councils.
The consultation also discussed workers’ right to security of tenure, following President Rodrigo Duterte’s resolve to end labor contractual and end-of-contract schemes.
Organized by Labor and Trade Departments, the high-level meeting presented views on the issues surrounding the trilateral relationship among the workers, the service providers and the principals or companies.
The Trade Department offered a ‘win-win structure’ for workers, service providers and the companies.
Data show that 5,150 registered contractors and subcontractors deploy over 416,000 workers to not less than 26,000 principals as of 2016.
In the ‘win-win’ set-up, workers can be hired by service providers as regulars, receiving full benefits such as leave credits, 13th month pay, as well as retirement, social security and health insurance plans.
Companies, meanwhile, will have the flexibility to either directly hire workers as regular employees or outsource them through service providers, in view of seasonal job functions.
Lopez encouraged companies to ensure that service providers comply with laws safeguarding rights of the workers.
“What is critical now is the compliance of service providers in giving full benefits to the workers,” said Lopez, adding the win-win structure had a received positive response from the President.