Trade groups asked the National Capital Region wage board not to approve the proposed P100 hike in the daily minimum wage in Metro Manila as companies have yet to recover from the pandemic fallout and spiraling cost of operations.
Philippine Exporters Confederation Inc. vice president Ma. Flordeliza Leong said during the public hearing on June 21 that employers, especially those running micro, small, and medium enterprises, were still recovering from their pandemic-induced losses and that many MSMEs closed down due to the effects of the pandemic.
“Any petition will never be enough when employers and business owners have no means to increase the salaries. Prices will go up, and another wage hike will be proposed because of this. I don’t think it will ever be enough. It’s a vicious cycle,” Leong said
She reminded the Regional Tripartite Wages and Productivity Board-National Capital Region that inflation not only affect consumers but producers as well, as it raises both the prices of consumer goods and the cost of raw materials used in manufacturing.
She said inflation hurts consumers and manufacturers alike.
Labor groups presented their case during the hearing and their reasons for a substantial wage increment.
Some of the labor groups sought a P100 daily increase to recover the purchasing power of workers’ wages, while others petitioned for a new P1,161 minimum wage in the metropolis.
The trade associations opposed the requests for a substantial increase because it is detrimental to the recovery of the economy and the survival of most businesses.
PhilExport said a wage increase would be bad for the Philippines, which is already ranked second highest in the 10-member ASEAN region in terms of wages but is near the bottom of the list in economic performance.
Confederation of Wearables Exporters of the Philippines executive director Marites Jocson-Agoncillo said their group sympathizes with the workers, but she cautioned that a big salary adjustment would be a setback for the country’s exports.
She attributed the steep decline in the exports of garments, textiles, shoes, and bags to a double-digit drop in overseas orders owing to the recession and strong competition from ASEAN countries like Cambodia, Thailand, Vietnam, and Laos which have the advantage of lower wages and higher productivity.
“We are not ready now. [If] NCR moves, the rest will follow. We just had an increase last year,” she said in a similar appeal to the Wage Board.
Meanwhile, a representative from the People Management Association of the Philippines said employers understand calls for a new round of wage increases but said any hike should be reasonable and equitable.
The PMAP representative said that employers were worried about the fines that await them should they fail to meet the adjusted minimum wage requirement.
To avoid this scenario, they would likely resort to layoffs, which would mean more underemployed and unemployed people.
“It is useless to implement the minimum wage hike that is so unreasonable and beyond the capacity of employers to pay ng employers. The scenario may mean leasing a number of workers at the end of the day,” he said.
“What the management sector is asking is to balance the interests between labor and capital to stop employers from bleeding dry,” he said.
The NCR wage board last granted a salary increase to workers in May 2022, which took effect a month later. The current minimum daily wage in Metro Manila is P570.
