2010 inflation rate assumes wage hike of less than P75

THE Bangko Sentral has included in its inflation forecast a minimum wage increase of less than P75 a day, Governor Amando Tetangco Jr. said Wednesday.

Workers’ unions want a 75- to 125-peso increase in the minimum wage in Metro Manila, where it is currently P382. One of them—the Partido ng Manggagawa or Workers’ Party—claims that the cost of living there as of April was P1,000 a day for a family of six.

“[The forecast] depends on how much increase [in the minimum wage] is going to be approved, though a certain amount has been incorporated in the inflation forecast,” Tetangco told reporters.

The central bank has forecast that inflation will average 5.1 percent in 2010—with the monthly figure falling within a range of 3.5 to 5.5 percent—and 3.7 percent next year.

Workers want an immediate increase in the minimum wage, but an official said Wednesday any increase could not be guaranteed before President Gloria Arroyo steps down on June 30.

“I hope [the increase happens] before June 30, but I cannot really give guarantees,” said Dennis Arroyo, director-general of the National Economic and Development Authority.

The wage boards were still studying the various petitions for wage increases, he said.

The minimum wage in Metro Manila was last increased in June 2008, and by P20 a day.

The minimum daily wage in the regions is P180 to P320, and in Zamboanga, the Philippine Integrated Industries Labor Union wants a 50-peso increase, while 10 labor unions are seeking P128.60 in Cebu.

The Trade Union of Filipino Workers is petitioning for a 50-peso increase in Eastern Visayas, and the Trade Union Congress of the Philippines-led labor groups in Mindoro, Marinduque, Romblon and Palawan want P65 added to the daily wage.

Any increase in wages is inflationary, so the central bank is keeping an eye on its borrowing (4.0 percent) and lending (6.0 percent) rates to see how much those would have to be adjusted to keep inflation in check.

The Monetary Board, the central bank’s policy-making body, meets today, Thursday, to decide on whether or not it will increase the rates it charges when borrowing from or lending to banks, which are the lowest in a decade.

Still, analysts expect the central bank to keep its borrowing and lending rates ahead of Friday’s release by the National Statistics Office of the inflation rate for May.

May inflation probably ranged between 4.2 and 5.1 percent, Tetangco said, and that would compare with the 4.4-percent inflation rate recorded in April.

Tetangco said the Bangko Sentral had assumed a wage increase below the amounts being sought by the labor unions.

Earlier, Assistant Governor Maria Cyd Tuano Amador said inflation might peak at 6 percent in July or August as a result of the wage increase and the expected rise in transport fares. Roderick T. dela Cruz, Joyce Pangco Pañares, Manila Standard Today