Business cautions on wage hike plea

April 15, 2016 at 10:27

A NEW round of petitions nationwide for increases in daily minimum wage has begun as the country’s biggest labor group yesterday formally sought a P154 hike for private sector workers in Metro Manila, leading some business leaders to caution on the move’s impact on Philippine competitiveness in attracting foreign investors.

TUCP-Nagkaisa spokesman Alan A. Tanjusay said the application is for an “across-the-board” increase that “means all workers in all industries, whether they have a union or not…,” even as he noted that there are no farm workers in the national capital.

“All of them should have the increase because everyone is hit by price increases.”

Mr. Tanjusay said his group now plans to file similar petitions in the country’s other regions.

In its invitation for journalists to cover the filing of its petition, TUCP-Nagkaisa had argued that the increase was warranted “with current wage level falling 24% behind rising cost of living…”

But business leaders expressed concern when sought for comment on the latest wage hike petition.

John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, Inc., questioned the merits of such a wage hike in the face of very slow inflation.

He added that such an increase, if granted, would make the country even more expensive than it already is compared with its Asian competitors for investments.

“For exports in labor-intensive manufacturing, the Philippines competes with Vietnam where the minimum monthly wage is half the Philippines’, as is the number of holidays,” Mr. Forbes noted as an example. (see table)

Peter Angelo V. Perfecto, executive director of the Makati Business Club, also called for other options.

“We should also look at non-wage benefits,” Mr. Perfecto said in a telephone interview.

“It is true that focusing merely on increasing salaries could adversely affect the country’s competitiveness and attractiveness to foreign investors,” he explained, warning that small- and medium-scale enterprises that make up bulk of the country’s business community would be particularly vulnerable to such increased cost.

The most recent wage order in the capital that took effect in April 2015 granted a P15 increase even if TUCP-Nagkaisa had asked for a P136 raise in January that year. — Alden M. Monzon