Gov’t urged to adjust minimum wages

Published by rudy Date posted on May 13, 2011

MANILA, Philippines — The American Chamber of Commerce of the Philippines (Amcham) has urged the government to adjust minimum wages to be more at par with the regional middle-income economies and undertake measures to make business costs competitive.

Amcham senior adviser John Forbes told members of the Employers Confederation of the Philippines (ECoP) that the country should allow relief from minimum wages or piece work for distressed industries or other measures that maintain jobs instead of losing them to other countries including developing new industrial zones with infrastructure that offer much lower wage rates.

He also cited the need to reduce burden of high-holiday payroll expenses by reducing the number of non-working holidays, reduce power costs for firms needing to maintain global competitiveness to survive and accelerate efforts to greatly reduce the red tape burden on citizens and firms.

To improve the general business environment in the country, Forbes likewise proposed measures geared towards addressing key issues in environment and natural disasters, foreign equity and professionals, governance, judicial, labor, legislation, local government, macroeconomic policy, security and social services.

The Joint Foreign Chambers (JFC), in the Arangkada report, said the country needs to modernize the Labor Code in order to help firms do business easier, rationalize holidays, allow overseas serve firm workers compensatory days off and maintain the flexible working arrangements introduced in recent years.

The government should also focus on improving the labor productivity, create several million new direct and indirect jobs and attract manufacturers relocating from China.

The Philippines was asked to narrow the skill-jobs mismatch by revising curricula and training, and re-introduce dual training system and support greater interaction between Technical Education and Skills Development Authority (TESDA) and private sector.

The JFC believed that creating quality jobs is among the challenges facing the country, noting that the labor force of 38 million has increased 50 percent since 1990 and is projected to grow to 54 million in 2030.

“Job creation by the private sector should receive extremely high priority to reduce unemployment and underemployment by 50 percent and to give Filipinos more alternatives to working abroad,” it noted.

Likewise, JFC asked the Aquino administration to consider adopting as a major high priority policy goal the doubling of the gross domestic product growth rate to 9 percent, twice as fast as the 4.6 percent growth generated in 2001 to mid-2010.

In a separate position paper, PHILEXPORT president Sergio Ortiz-Luis Jr. reiterated that any increase in minimum wages would create a cost-push inflation effect that will also adversely impact on consumers.

This will burden micro, small and medium enterprises that are already reeling from a strengthening peso, increasing oil and raw material prices and the lingering effects of the global recession. (EHL, EDU LOPEZ, Manila Bulletin)

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