Wage hike not always inflationary, can boost recovery — labor groups

By John Victor D. Ordoñez, Reporter

PHILIPPINE labor groups on Wednesday said raising the minimum wage in Metro Manila would not automatically lead to spiraling prices or shutter small businesses.

“It is about transitioning our wage policy from a depressed to a living wage, which would continuously boost economic recovery,” Renato B. Magtubo, chairman of Partido Manggagawa, told a wage hike hearing in mixed English and Filipino.

In March, the Unity for Wage Increase Now sought to raise the P570 daily minimum wage in Metro Manila to P1,100. The region’s wage board approved a P33 minimum wage hike in June last year. 

The Kapatiran ng Mga Unyon at Samahang Manggagawa in December filed a petition seeking a P100 increase for the capital region.

Every wage order approved by a Regional Tripartite Wages and Productivity Board must be approved by the Labor secretary. Wage boards can only act on wage petitions a year after a region’s last wage order.

“We are open to reviewing the minimum wage, but we have to consider a lot of factors that will impact the country’s economy,” said Robert F. Maronilla, legal services manager of the Employers Confederation of the Philippines (ECoP).

He said 99% of the country’s businesses are micro, small and medium enterprises. “More often than not, many of the firms will close or go underground if prices increase.”

He added that those working in the informal economy would not be covered by the proposed wage increase.

Inflation eased to 6.1% in May, the lowest in a year, amid easing food and transport prices. This brought the five-month average to 7.5%. The Bangko Sentral Pilipinas (BSP) expects inflation to average 5.5% this year.

Lawmakers have filed bills seeking across-the-board minimum wage hikes for workers in the private sector and agriculture to help them cope with spiraling prices.

In March, Senate President Juan Miguel “Migz” F. Zubiri filed a bill that seeks to increase the minimum wage for these workers by P150.

ECoP earlier said a legislated wage hike should also consider workers in less formal employment, noting that private sector workers only make up 16% of the labor force.

“These increased wages would benefit informal workers as they would serve as a benchmark for what informal workers can ask for,” Carlos Miguel S. Oñate, legislative staff officer of the Trade Union Congress of the Philippines (TUCP), told the same hearing.

The petitions would likely be decided by July, Sarah Buena S. Mirasol, regional director of the Labor department and head of the capital region’s wage board, told BusinessWorld. “We will have a deliberation next week to consider the things discussed in today’s hearing and hopefully we can decide on the petitions by July.”

The minimum living wage of a family of five in Metro Manila should be at least P1,008, according to think tank IBON Foundation.

Job quality worsened in April, as the underemployment rate, which measures workers seeking further employment or longer hours, increased to 12.9% from 11.2% a month earlier, the Philippine Statistics Authority reported last week.

The country’s jobless rate fell to a four-month low of 4.5% from 4.7% in March.

“Wages serve as a source of demand, which would lead to better productivity and better purchasing power for our workers,” Mr. Oñate said.