DTI sees need for minimum wage hike

Published by rudy Date posted on April 7, 2011

MANILA, Philippines – The Department of Trade and Industry (DTI) said yesterday there is a need to increase the minimum wage to help workers but said it should not be P125 per day.

In a statement, Trade Secretary Gregory L. Domingo said he understands that there is a need to augment the wages of workers but the P125 per day wage increase is ”too much.”

“The Department recognizes the plight of workers and the need for an increase in their take home pay,” Domingo said. “The increase should be close to the inflation rate and not so high that it will imperil the operations of firms in the country.”

Domingo expressed his support to increase the minimum wage of workers provided that the approved wage increase passes through the regional tripartite productivity wage board.

“Giving a P125 per day wage hike across the board will make our companies uncompetitive compared to its Asian counterparts. It is not wise to give such at a high amount a time when our companies are gaining grounds in competitiveness,” Domingo said.

A high wage increase will dampen the interest of possible investors and peril the viability of firms operating in the country. The government is trying to strike a balance and create a win-win solution for both the labor and business sectors.

Meanwhile, the Employers’ Confederation of the Philippines (ECOP) said the proposed P125 across the board wage hike will result in the mass lay-off of 700,000 employees.

“The employers will have no choice but to lay off at least 700,000 workers,” Edgardo Lacson, ECOP president said in an interview.

According to Lacson, the P125 across the board wage increase will translate in huge losses for firms. He estimated that wage hike will result in annual losses of P298 billion for companies. “This is just because of the P125 wage hike because everyone even the president of the company will get an increase. the increase should be merit based.”

Lacson said that out of the 39 million in the work force, only three million are in the formal sector. The remaining 36 million are in the informal sector who will not benefit from the wage hike. “These are the drivers, the salon workers who are not in the formal sector.” –Ma. Elisa P. Osorio (The Philippine Star)

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