Labor chief: Workers need help

But Palace won’t certify minimum wage hike bill

MANILA, Philippines—While overall inflation apparently settled at 4.3 percent in March, Labor Secretary Rosalinda Baldoz said the country’s workers still needed relief because the crisis in the Middle East would be expected to continue.

Baldoz Tuesday noted that the purchasing power of Metro Manila workers has “eroded” by P7.48 while the inflation rate in some regions has breached the government target of 5 percent for the whole year because of increases in the prices of basic commodities, oil and transportation.

On Monday, Baldoz said regional wage boards were studying whether workers should get a wage increase or an increase in the cost-of-living allowance (COLA) because of the recent price hikes.

According to the National Statistics Office (NSO), the national inflation rate stood at 4.3 percent in March, the same level as that of February and lower than the 4.4 percent registered in March 2010.

In Metro Manila, the inflation rate dropped from 4.6 percent in February to 4.0 percent in March but in areas outside the capital, it rose from 4.2 to 4.5 percent.

Moreover, 11 regions recorded “higher” inflation rates with prices in the Zamboanga Peninsula rising by 5.5 percent and those in Caraga region by 6 percent.

Because of this and the oil price increases as a result of the continuing Middle East crisis, Baldoz said the National Wages and Productivity Commission (NWPC) and regional wage boards should determine if the recent spate of price increases constituted a “supervening event” that would necessitate a wage hike.

The NWPC defines a supervening event as “extraordinary increases in the prices of petroleum products and basic goods and commodities.”

“The extraordinary increase is sudden [and] abrupt such that the (inflation) target is reached and is then prolonged or sustained [for a] period of three to six months,” Baldoz explained.

No resolution in sight

But the criterion of a prolonged and sustained increase may no longer apply as “it is not likely that the Middle East crisis which is fueling the crisis in petroleum will be resolved soon,” she said.

Once the NWPC and the regional wage boards rule that there is a supervening event, they would then hold consultations and public hearings to determine the amount of the increases in wages or allowances.

There have only been three instances when the wage boards intervened because of a supervening event: during 1990 Persian Gulf War; in 2005 when the value-added tax was imposed and there was an oil crisis; and in 2008 when there was a rice and oil crisis.

In all three instances, the wage boards only increased workers’ COLA and “did not touch their wages,” Baldoz said.

Malacañang Tuesday said President Benigno Aquino III would not certify as urgent a militant party-list group’s longstanding proposal for a P125 wage increase.

Communications Secretary Ricky Carandang also denied Mr. Aquino had supported the measure when he was still a congressman.

Carandang said the administration would rather that wage increases be taken up in the regional wage boards rather than in Congress.

“Our concern here is if you legislate a wage increase across the board, regardless of what industry they’re in, regardless of what the employment picture is in that particular region, you might cause distortions in wages,” he told a news briefing.

He said a legislated nationwide wage hike would cause “inflation pressures.”

“When you increase wages without an increase in productivity, the prices of goods eventually go up. We have to be very careful about considering legislated wage increases,” he said.

Carandang explained that what Mr. Aquino supported when he was a member of the House and the Senate was a bill to increase penalties for companies that were not complying with the minimum wage law. –Philip Tubeza, Philippine Daily Inquirer with Norman Bordadora