The perception of running sweatshops in the Philippines has been driving away foreign investors scared of being accused of paying low wages, Senate President Juan Miguel Zubiri said.
“They want to move to the Philippines, but they’re looking at our wage, our labor problem… they don’t want to be accused of moving to a country which runs sweatshops due to the low pay they’re giving,” said Zubiri, who recently returned from an official trip to the United States.
The Senate leader was referring to American officials he talked to during his three-week official working visit in Washington D.C.
The Philippine contingent led by Zubiri and Sen. Francis Tolentino met US State Department officials and several congressmen who aired their concerns on foreign companies who would like to invest in our country.
“They want to move to the Philippines, believe it or not, this is their concern,” he said.
According to Zubiri, these companies want to pay the right wages, which is higher than what workers in the Philippine have been getting.
He cited a big disparity of the wages they’re paying in other countries where they’re located and in the Philippines.
Zubiri also mentioned some people, whom he did not identify, who told a foreign investor not to give high salaries to their Filipino workers .
“I brought a company into Clark and then imagine, they want to pay above minimum wage, but was told ‘don’t do that’ because it will look like you can afford it and therefore you will not get the incentives given to ecozones. I could not believe my mind,” disclosed Zubiri who said he was surprised with this.
“They have to keep the wages this low so it will look like they are incapable of paying so they have the so-called economic fiscal incentives,” said Zubiri.
“That is ludicrous. It’s crazy. imagine the frustration we feel.”
He vowed to tackle this issue in the next Senate budget hearing, and pointed out President Ferdinand Marcos Jr. “is doing a great job being the number one salesman of our country.”
“And then when they come here (investors), they will be met with this problem. Why is that being a caveat if you want to bring a company into the Philippines, why are you forcing them not to pay the above minimum wage?”
He refuted the notion that investors won’t get incentives given in economic zones if they give high pay.
Zubiri said the Fiscal Incentives Review Board (FIRB), created by the CREATE law, rationalizes all fiscal incentives “They should be given these incentives to exporters that want to set up a shop here,” he said.
He vowed to work all these things out and expressed hope that in the next few months, this will be clarified.
Zubiri will also call on the Clark Development Corporation (CDC) and the rest of the economic zone teams to discuss about not giving incentives in exchange for high pay to workers.
If the problem is with FIRB, the Senate chief said he will go to Finance Secretary Benjamin Diokno, as the FIRB is headed by the Department of Finance.
According to the Senate leader, they are trying to get about 20 percent of United States and European companies leaving China and moving to Vietnam and Indonesia to invest in the Philippines.
But with these kinds of discussions when they come into the Philippines, he said it’s scaring them away.