Central bank warns against wage hike of over P25

Published by rudy Date posted on May 4, 2011

THE central bank on Tuesday warned an increase in the minimum wage beyond P25 a day would result in higher commodity prices.

“In our [inflation] forecast, we used an assumption of P25, which is a 6.2-percent increase,” Bangko Sentral Governor Amando Tetangco Jr. said.

“If the actual wage hike is bigger than that, that will have additional inflation implications.”

Government forecasts the inflation rate to settle at 3 to 5 percent this year.

The wage board in Metro Manila will meet on May 9 to hear petitions for a wage increase from labor groups, which have been saying workers need it to cope with rising prices.

Labor groups are calling for a wage increase of more than P25, with the moderate Trade Union Congress of the Philippines pushing for a legislated wage hike of P75. The left-wing groups want P125 a day.

The central bank raised its overnight borrowing rate by 25 basis points, to 4.25 percent, in March in a bid to avert the second-round effects of rising petroleum and food prices.

The three big oil companies on Tuesday raised pump prices again, citing an increase in world oil prices.

Shell, Petron and Chevron raised the prices of unleaded gasoline, regular gasoline and kerosene by P1.40, P1 and P0.30 a liter, respectively. The other distributors followed suit.

On Monday, Shell announced a three-peso-per-kilogram increase in the price of its cooking gas.

Also on Tuesday, private hospitals said they opposed any increase in the minimum wage in their industry, saying they were already suffering the Cheaper Medicines

Law, the Illegal Detention Law, and the discounts mandated for senior citizens.

“A wage hike at this time … may bring this industry to the intensive-care unit,” the Philippine Hospital Association said in a statement. –Roderick T. dela Cruz with Jeremiah F. de Guzman, Manila Standard Today

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