DTI opposes 2 labor rights bills pending at House

MANILA, Philippines – The Department of Trade and Industry (DTI) is not in favor of the two labor rights bills now pending at the House of Representatives, saying these will make the Philippines uncompetitive in terms of business.

Trade Secretary Gregory Domingo said the department is opposed to the proposed bill banning labor contracting and the proposed P125 across-the-board wage hike.

Two other pending legislation concerning the plight of workers are focused on the security of tenure and the 10 percent profit sharing for employees.

Domingo said members of the Employers Confederation of the Philippines (ECOP) led by its president Edgardo Lacson expressed concerned over the pending bills on labor rights.

The DTI official said it is difficult to implement a ban on contractual employees. “There may be some businesses that have seasonal requirements like the construction industry and the tourism sector. We cannot implement a shotgun approach. The environment should allow contractual,” he explained.

Domingo said there maybe some provisions in the measure that make sense, but as a whole it is not prudent to ban contractual workers because there are times when there are projects that require only short-term employment.

On the P125 across-the-board wage increase, Domingo said the proposal does not make any sense because it will make the Philippines uncompetitive in terms of business environment. He said the current setup of the tripartite wage board is working “fairly well.”

The DTI official noted that this is not the right time to implement such measures, especially now that the Philippines is becoming an attractive business destination as evidenced by the entrance of garments manufacturing and others.

ECOP president Edgardo Lacson, meanwhile, said the proposed P125 salary increase would result in the mass layoff of 700,000 employees.

According to Lacson, the proposed pay increase would translate to huge losses for firms. He estimated that wage hike would result in annual losses of P298 billion for companies.

He said that out of 39 million in the workforce, only three million are in the formal sector. The remaining 36 million are in the informal sector such as drivers, salon workers and others who will not benefit from the wage hike.

ECOP has voiced grave concern to lawmakers during a public hearing on the “disastrous” impact on business and labor of a legislated P125 across-the-board wage increase for private workers.

“With this massive across-the-board daily wage increase which is not productivity-based, cost of production of goods and services would rocket sky-high. Enterprises could not just simply pass on the increased cost of goods to the market primarily because of the competition offered by low-cost imports and smuggled goods,” ECOP warned.

“As a result, companies which are unable to recover the increased cost of production would have no other choice but either to retrench or worse, close shop,” the group added. –Ma. Elisa P. Osorio (The Philippine Star)