P13 in daily wage hike is our limit–ECOP

Published by rudy Date posted on May 5, 2011

Metro Manila workers can expect no more than a P13.35 a day wage hike as, with the rising costs of production, this is the best that employers can offer, a president of employers’ union told Radio Inquirer Thursday.

Edgardo Lacson, president of the Employers Confederation of the Philippines (ECOP), said employees were not the only ones suffering from the escalating prices of fuel. Businesses are also starting to feel the pinch.

“It’s not only the wage that will have to increase. We also have to consider the increasing costs of electricity and water. As employers, we also have to look at our costs,” he said.

According to ECOP’s computations, the erosion rate of purchasing power in Metro Manila was only P13.35 a day, as of March, Lacson said.

He said this was the maximum that employers can afford to give, in terms of a daily wage increase. The amount for specific employers could still vary and may even be lower, based on a particular employer’s capacity to pay.

Lacson said the tripartite board of government representatives, and labor and capital sectors, will still meet to discuss the possible salary increase, and will ask the National Economic Development Authority to validate the computation.
Lacson enumerated the dire things that could happen if employers are forced to give more, like the P75 daily wage hike that the Trade Union Congress of the Philippines is seeking.

These include employers being forced to retrench workers, rotate work among existing employees, close shop, or go underground.

Malacañang has the directed regional wage boards to quickly resolve wage hike issues due to a “supervening condition,” meaning the escalating price of oil. The first hearing was held last May 2.

At this rate, a wage hike order could be published by May 15 and take effect by June 1, he said.

Even before any wage hike order is issued, some 400 Japanese companies operating in the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) area have started letting go of employees, said Lacson.

“These are mainly exporters of auto parts and electronic components that get their raw materials from Japan. They’ve cut production and have even shut down, so they had to let people go,” he said.

“Every time we have minimum wage hike order for the country’s 2M workers, we also experience an increase in inflation rate,” Lacson said.

He said 24 percent of the country’s formal sectors used to be covered by the minimum wage law, but has now dropped to 16 percent this year, based on Bureau of Internal statistics.

The decrease in the number of formal sectors means that there are many companies which have drawn back and now prefer to be categorized as handicraft economies. “Because they cannot follow the wage order, they simply hide from the authorities,” Lacson explained.
Lacson added that among the 500 economies in Asia, the Philippines has the highest cost of labor, citing the $1.50 per day rate of Vietnam to the country’s $9 per day rate.

Forty years ago, minimum wage law was created to protect the vulnerable, but over the years it became a political issue which has turned into a prevailing rate that limits both the laborers and capital sectors, Lacson said.

“The suppose benefactors of the minimum wage law are now suffering due to the standards set by the private sectors,” Lacson said, citing that high salaries would mean more competitive companies who will not just hire fresh graduates and undergraduates.

Lacson also said that in the possible P13.35 wage hike, the board should consider the real poor, those who have no jobs at all.

The processing of the wage hike for 2011 was ordered by Pres. Noynoy Aquino after Senator Ramon “Bong” Revilla Jr. passed the Senate Bill No. 1981 in the Congress “which challenges employers and private sectors to grant a P125 increase for employees due to the growing cost of living.”

In pushing for a legislated wage hike, Senator Revilla pointed out that it is the policy of the Senate to alleviate the living conditions of ordinary Filipinos, including the working class, by ensuring the right of labor in the fruits of production. “Prices of basic commodities and services are jacking up. Our government must show that it is living up to it is promises, and not merely saying words that are nice to hear without actually backing them up with action, “ he said. –Carissa Caraig, Correspondent, INQUIRER.net, Radyo Inquirer

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