Wage hikes not needed for now?

WAGE HIKES have been ruled out in the short term by the government, which cited the lack of price pressures and a still-recovering economy.

At least three petitions are being reviewed but the government has yet to see whether the crisis is definitely over, said Esther F. Guirao, deputy executive director of National Wages and Productivity Commission (NWPC).

Republic Act (RA) 6727, which took effect in 1989, transferred the power to fix wages from Congress to regional tripartite boards. Adjustments have been made every year since but none were ordered last year, with stakeholders pointing to the need to keep the economy afloat amid the global downturn.

As 2009 drew to a close, however, labor unions in the Western and Central Visayas regions, and the Zamboanga peninsula respectively filed petitions for P50, P128.60, and P50 across the board salary increases.

While the pleas are being considered, “The situation is still fluid. We don’t see triggers to increase the minimum wage yet as inflationary pressures and oil increases remained tempered,” Ms. Guirao told BusinessWorld at the sidelines of a labor forum in Makati last Tuesday.

“Possible consideration of whether salaries should be increased could come later this year and not in the coming few months,” she added.

The minimum wage in the Western Visayas is currently pegged at P208-250 per day, with the last adjustment made in December 2008. Workers in the Central Visayas, meanwhile, last saw an increase in their daily wages, now at P222-267, in June 2008. Zamboanga Peninsula minimum wages were last adjusted in July 2008, to P195-240.

Minimum wages are the highest in Metro Manila, at P345-382 per day. The last increase took effect in June 2008.

RA 6727 provides for a one-year proscription period between wage adjustments, but the regional wage boards can order changes on the basis of “extraordinary circumstances.” It can also conduct reviews without wage petitions being filed.

Asked to comment, Trade Union Congress of the Philippines (TUCP) Deputy General Secretary Cedric R. Bagtas said his group plans to file a petition for a P75 across the board wage hike on Monday.

“Commodity prices are already rising, leaving workers with low purchasing power,” Mr. Bagtas said.

He detailed the P75 wage hike bid as covering P20 in lost purchasing power between May 2008 and January this year; P34 from rising consumer prices which the TUCP projected would hit a peak of 9% this year, and a P21 share in 1989-2008 economic gains.

The NWPC’s Ms. Guirao, meanwhile, said the government remained inclined towards granting non-wage benefits.

“As a comprehensive review on minimum wage fixing system is still ongoing, our focus is on improving non-wage benefits,” she said.

The review, started late last year is expected to be completed in 2011, Ms. Guirao added.

Gerardo P. Sicat, an economist at the University of the Philippines, said he was not amenable to increasing minimum wages.

“The minimum wage policy is not consultative enough as it hurts domestic firms owned by Filipinos than those owned by foreigners. The latter could vote out of their feet…,” he said. –Businessworld