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Sunday, May 19, 2024

ECOP, other biz groups frown on wage hike bill

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Business groups led by the Employers Confederation of the Philippines (ECOP), including representatives from the informal sector, expressed deep concern on the proposed P100 national wage hike for the workers in the private sector.

“This is a dangerous precedent considering that the Senate of the Philippines has recently approved on 3rd and final reading Senate Bill No. 2534 or “An Act Providing for 100 Pesos Daily Minimum Wage Increase for Employees and Workers in The Private Sector,” the groups said in a statement.

ECOP took this position together with Philippine Chamber of Commerce and Industry (PCCI), Philippine Confederation of Exporters, Inc. (PhilExport), Alliance of Workers in the Informal Economy/Sector (ALLWIES) and the Financial Executives Institute of the Philippines (FINEX).

The business community said the bill will imperil the livelihood of private and public sector employees and workers in the informal sector, who will not benefit from the proposed adjustment.

If the proposed legislated wage hike is enacted into law, more than eight out of 10 workers in the government and the informal sector will not receive any adjustment.

Data from the groups showed that only 4 million workers receiving minimum wages will receive the P100/day wage increase, while the other employees in the formal sector will likely receive token wage distortion adjustments.

“This means that while a relatively small number of minimum wage earners in the private sector will stand to benefit from the wage hike, a supermajority of our workers will not receive any adjustment in their current wages,” the groups said.

FINEX said a wage increase would be inflationary, as it would force companies to increase prices in order to cover their costs, which would trigger further demands for wage increases.

“The wage hike is intended to benefit the less than 10 percent of the working population who are minimum wage earners, but the resulting inflation will affect everyone, disproportionately impacting those who are self-employed or work in the informal sector,” it said.

The informal sector workers may face retrenchment, reduced work hours, and suffer from a widening income gap between the two sectors.

The group of financial experts alleged that the wage hike is likely to increase unemployment due to the tightening of available funds, and discourage investments due to policy uncertainty with regard to wage-setting.

The group is one with the PCCI in allowing the existing regional wage boards to decide on a more appropriate mechanism for wage-setting as they take multiple factors into account, balancing the interests of both employers and workers.

“We urge our legislators to study other mechanisms for increasing the purchasing power of workers, such as reducing the tariffs on and increasing or removing the quotas on food imports,” FINEX said.


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