Government says budget ‘already stretched’ to allot beyond P200 monthly for poor families
The government does not have enough funds to provide a bigger subsidy for the country’s minimum-wage earners amid skyrocketing prices of oil products and basic commodities, a Department of Finance official said Friday.
The DOF is carefully looking into the Labor Department’s proposed P24 billion-wage subsidy that could last for three months to support workers, Finance Assistant Secretary and spokesperson Paola Alvarez told CNN Philippines’ The Source.
This developed as the Trade Union Congress of the Philippines (TUCP) appealed to President Duterte to instruct the Regional Tripartite and Productivity Wage Boards (RTWPB) to act immediately on their petition to approve the minimum wage hike it filed in Metro Manila.
TUCP said it will also file wage increase petitions in other RTWPB offices apart from the National Capital Region to help minimum wage earners in the provinces.
But the government is already “really stretched,” Alvarez said, when asked about the P200 aid the government is providing for the poorest households hit by the recent oil crisis, exacerbated by oil-producing Russia’s invasion of Ukraine.
“Again, we are really stretched. This is what we can afford. We understand it’s not a huge amount but again it’s what the [national] budget can afford,” she noted.
“If we can’t afford the budget of more than P200 [for low-income households], I guess you know the answer to a P24-billion proposal,” Alvarez hinted.
Aside from the P33 billion earmarked for the P200 monthly relief for select indigent households, the only subsidies available are for the transport and the agricultural sectors, the Finance spokesperson noted.
Duterte previously approved the proposal to distribute unconditional cash transfers to each of the country’s “bottom 50%” households per month, totaling P2,400 over a year.
The government has earlier allocated P5 billion to assist public transport drivers with a P6,500 subsidy for two months, and a separate P1-billion budget for fuel discounts to benefit the agricultural sector bearing the brunt of increased oil prices.
The Finance Department earlier rejected proposals to suspend the collection of excise taxes so the country will not have to resort to more borrowings in the future. The government projects a revenue loss of P105.9 billion for 2022 alone if such suspension happens, it said.
Members of the government’s economic cluster earlier reiterated their opposition to proposals seeking a national minimum wage, saying this would only worsen inequality among the regions.
According to DOF Legislative Liaison Specialist Jeanne Guinto, the department supports maintaining the current system of regional wages, as needs vary among areas.
“On aligning the minimum wage of those in the province with that in the city, we really think that it will not be an effective measure,” Guinto said before the House Committee on Labor and Employment.
“The cost of living in the province is different from that of the city, so they may have different needs in terms of allocating their income for their basic necessities and other expenses,” she added.
Meanwhile, TUCP President Raymond Democrito Mendoza said they sent a letter to President Duterte “to direct the RTWPBs to act swiftly on our demand for a minimum wage increase.”
“The 5 million minimum wage workers are now fast becoming the new poor. It has been years since the last wage increase, and as prices of basic commodities continue to spike, minimum wage earners will soon no longer be able to cope,” he said.
“The lack of a just wage, sufficient to support the daily needs of a Filipino family, is a social powder keg just waiting to explode,” Mendoza added.
Legislating for a national minimum wage increase will take too long and will raise false expectations, he said.
“Workers cannot wait when Congress resumes to tackle our proposed wage measures. The 18th Congress will only have a few weeks of sessions after the May 9 elections until it adjourns in the first week of June to give way for the incoming 19th Congress,” Mendoza said.
“We will not have enough time in Congress to provide urgent relief for our minimum wage earners through legislation. This is the reason that we are asking the President to instruct the RTWPBs to move fast and approve our petition,” the labor leader added.
TUCP also debunked the argument of Presidential Adviser Joey Concepcion against the immediate grant of a minimum wage increase.
Concepcion had said the Russian-Ukrainian war, which has caused a spike in fuel prices, will just be temporary, and that if the conflict ends oil prices will eventually go down.
“In the House committee hearing that we just recently held to know the status of our OFWs in Hong Kong and Ukraine, the sense communicated to the committee was that the Ukraine-Russia war would go on indefinitely and will not be solved anytime soon as both Russia and Ukraine remain diametrically opposed, and as the Ukrainian Government declared itself willing to fight till the end,” Mendoza said.
“This gives us more reason to believe that oil price increases will not subside soon, which will certainly cause inflation rates to soar in the coming days that will badly hit our struggling workers and their families,” he added.
A committee on Thursday deliberated on House Resolution 1676, which looks into the possibility of establishing national minimum wages, as proposed by labor groups amid the COVID-19 pandemic.
Guinto cited the inflationary impact of the measure, with the country now battling higher costs due to the 11 straight increases in the pump prices of both global and domestic petroleum products.
“We post an objection to the proposed measures as these may cause high inflation on top of the ongoing fuel crisis that will impact both in business side and in households,” she explained.
Domestic prices have seen gasoline up by P7.10 per liter and diesel by P13.15 per liter on Tuesday alone.
The Department of Energy has maintained that the ongoing conflict between Russia and Ukraine has hit global prices, which in turn impacted domestic prices.
The National Economic and Development Authority mirrored the DOF’s sentiment, also citing the “significant differences” in the economic conditions across the regions.
“We share the objective of raising living standards for workers and their families, but we are unable to support proposals to have a uniform minimum wage across regions,” NEDA Director Reynaldo Cancio said in the same hearing.
“This will erode the ability of other regions to attract industries and enterprises, and worsen the inequality across regions. There are significant differences in the economic conditions across the regions,” he added.
According to Cancio, the price gap of basic goods vary across regions and could be as high as 40 percent for rice, 35 percent for chicken and pork, 50 percent for electricity, and 70 percent for water.
Labor groups have been pressing the government to increase the daily minimum wage in the NCR to P750, with Labor Secretary Silvestre Bello III himself noting that the prevailing wages may no longer be enough.
Bello has since ordered the Regional Tripartite Wages and Productivity Boards to expedite their review of the minimum wage, with the recommendations expected before the end of April. With Maricel V. Cruz