Business opposes plan for new wage increase

BUSINESSMEN yesterday opposed a government agency’s proposal to increase the wages of private-sector employees, saying that would further erode the Philippines’ competitiveness.

“It is wrong,” Donald Dee, chairman emeritus of the Philippine Chamber of Commerce and Industry, said at the launching of the World Investment Report 2009 by the United Nations Conference on Trade and Development in Ortigas.

Dee said he could not understand why a government official like Romulo Virola, head of the National Statistical Coordination Board, could make a statement such as the one he made on Tuesday.

Virola had said that more Filipinos employed in the private sector would become poorer this year if their wages were not adjusted by December.

But Dee said the Philippines was already suffering from a “difficult labor situation” that was turning off investors.

Efren Leaño, executive director of the Management Services Group of the Board of Investments, said the Philippines had lost some of its competitive advantage because its labor was no longer cheap.

“We are not a cheap labor country anymore,” he said.

“Compared to our neighboring countries, we are more expensive.”

Virola had said earlier that the poverty incidence of 32.9 percent of the population in 2006 could further rise this year because consumer prices were rising faster than wages.

“Unless [private workers] receive a wage adjustment before the end of 2009, many of them might join the ranks of the poor [this year],” he said.

Consumer prices rose by 8.71 percent annually between 2006 and 2008, while inflation hit 8.18 percent in the first half of this year.

By comparison, the minimum wage in the private sector in Metro Manila grew by 4.99 percent, and that for agriculture and non-agriculture workers by 4.47 percent.

“From 2008 to July 2009, the minimum wage did not grow at all,” he said.

“Our poverty reduction program has not exactly been an outstanding success because inflation eroded whatever increase there was in the income of vulnerable groups.” –Roderick T. dela Cruz, Manila Standard Today