Government rejects P125 pay hike, cites P1.43-T tab

Granting a P125 across-the-board minimum wage increase for 40 million workers is going to cost P1.43 trillion for a P9-trillion economy, President Benigno Aquino III said Tuesday.

With this argument, Mr. Aquino ruled out the grant of such an increase in his Labor Day speech, promising instead a P11.2-billion educational assistance and a P1.1-billion skills upgrade of government workers.

“I repeat, we’re taking out P1.43 trillion from an economy that is worth P8 to P9 trillion,” Mr. Aquino told labor leaders and employers at Heroes’ Hall in Malacañang.

He came up with the figure by multiplying P125 by 22 working days in a month, then by 13 months in a year, and by the 40 million Filipino workers.

“How can the businessmen recover this? Isn’t it that they’re going to raise the prices of goods and services? Aren’t they going to cut costs by laying off employees? Has anybody explained that there are 527,000 Filipinos who could lose jobs this year and next year if this is implemented?” Mr. Aquino said.

4 goals

The government has four goals to address unemployment: Keep jobs, create more jobs, upgrade skills of workers to find jobs that will give them a “better future” and implement the laws to better the welfare of workers, he said.

“Let’s be honest with one another. It’s clear that the proposed P125 increase runs counter to the first goal,” he said.

Mr. Aquino said the minimum wage, pegged at between $9 and $10, was far better than Cambodia’s $2, Vietnam’s $2.4 to $3.21 and Indonesia’s $3.05 to $5.27.

“If it gets higher, who would dare invest here in the country? This might even delay the growth of our economy,” he said.

Count blessings

The President indicated that workers should count their blessings, saying that the government has managed to keep prices of basic commodities stable despite spiraling fuel prices.

“In 2011, the wage increased by 5.24 percent, while inflation rose by 4.8 percent. That’s why we need a thorough dialogue and study of the wage increase which we course through the Regional Tripartite Wage and Productivity Boards. I’m now rushing their consultations with unions so we can come up with a new wage order at the soonest possible time,” he said.

The better strategy then, Mr. Aquino said, would be to invest in realistic, long-term programs.

Educational assistance fund

The President cited, for instance, the P11.2-billion educational assistance fund program (EAFP) for 1.4 million members of the Government Service and Insurance System (GSIS), and 200,000 members of the Social Security System (SSS) for a four-year degree or technical and vocational courses.

“Now the qualified members don’t have to hang on to loan sharks (“5-6”) just so their children could study. There’s now a more practical and fair alternative that Filipino workers can turn to invest in their future,” he said.

Of the amount, P5 billion will be provided by the Department of Budget and Management (DBM) out of “excess dividend collections” remitted by government-owned and -controlled corporations (GOCCs), while a counterpart fund of P6.2 billion will come from the GSIS and SSS, Budget Secretary Florencio Abad said.

While all active GSIS members are covered by the program, only SSS members with a monthly salary of P10,000 or less could avail themselves of the assistance, Abad said in a statement.

Work scholarship

Mr. Aquino also cited the P1.1 billion fund for Work Scholarship Program for the youth in IT-business process outsourcing, construction, electronics, tourism and agriculture.

“We have ordered and funded the Tesda (Technical Education Skills and Development Authority) to pinpoint the skills required by industries so that a college education is not wasted.

We’re doing this to end the tragedy of our countrymen enrolling in a good-sounding course only to graduate without a job waiting,” he said.

Advanced release

The DBM is spending an additional P2.7 billion for the advance release of the fourth and last installment of the salary increase for 1.6 million government employees under the Salary Standardization III program.

The advance release of the increase on June 1, instead of July 1, was the “good news” announced by presidential spokespersons ahead of Labor Day.

“June is the resumption of classes. The President thinks that if we advance it to June 1 that will help the parents with their children’s tuition,” Abad told reporters.

The President said he, Vice President Jejomar Binay and the Cabinet secretaries were not availing themselves of the advance release of their salary increase.

The fund will be drawn from the P19.5 billion dividends from GOCCs, according to Abad.

“I hope the private sector doesn’t begrudge us. The salaries of government employees like us have lagged behind for some time. But I repeat, out of sympathy, we—the Vice President and the Cabinet members, and myself—will get our salary increase on schedule in July,” the President said.

Labor leader’s concerns

The President heard pressing labor concerns straight from the horses’ mouth right inside his turf.

With the country’s top CEO listening, labor leader Jose “Sonny” Matula assailed the growing industry practice of renewing workers’ contracts every five months to avoid regularizing them.

“Your Excellency, we’re bothered by the rampant contractualization,” Matula, president of the Federation of Free Workers (FFF), said in a speech during a brief dialogue between the President and labor organizations at Malacañang’s Heroes Hall.

PAL layoffs

Matula said his group was apprehensive that Philippine Airlines’ decision to outsource its services, which precipitated the layoff of thousands of airline employees, would further promote contractualization.

“We sympathize with thousands of PAL employees who lost their jobs after your office set aside the appeal of Palea (PAL Employees’ Association) to stop outsourcing the services of the PAL,” he said, speaking on behalf of the labor unions.

If the profit-earning PAL is allowed to lay off employees, what would stop other companies from doing the same in the name of “management prerogative?” he wondered.

Worse, union employees and members are the first to take the ax under such schemes, contrary to the spirit of the Philippine Development Plan, Matula said.

Dilemma

Mr. Aquino, who spent 10 minutes to respond to Matula’s concerns before delivering his Labor Day speech, admitted that he was caught in a dilemma over the PAL labor issue, given the conflict in the Middle East and Africa.

“If our countrymen in the Middle East had to be repatriated immediately, we have to have the capability to do that. So the question then was: Should we gamble on the capability of this company to continue their flights, or on the fate of our countrymen?” he said.

Mr. Aquino said the Department of Labor and Employment (DOLE) had issued Department Order 18-A which prohibits the renewal of contracts every five months.

iPads for inspectors

To enforce this, he said the department was tapping 372 inspectors on top of the present 224, to monitor contractualization in industries.

“As far as technology is concerned they can be given iPads so they can immediately translate their findings to the DOLE central office,” he said of the inspectors.

With regards to subcontracting arrangements, the President said the industry could take a look at House Bill No. 4853, a consolidated version of several bills promoting security of tenure.

This, however, might need some fine-tuning because of fears that it could lead to the layoff of 10.3 million workers, he said.

Also present at the dialogue were representatives of the Association of Genuine Labor Organizations, Alliance of Filipino Workers, Alliance of Progressive Labor, Alliance of Independent Hotel and Restaurant Workers Union, Bukluran ng Manggagawang Pilipino, Lakas Manggagawa Labor Center, Manggagawa Para sa Kalayaan ng Bayan, Pambansang Diwa ng Manggagawang Pilipino, Philippine Meatworkers Alliance, Public Services Labor Independent Confederation, Trade Union Congress of the Philippines and Trade Unions of the Philippines and Allied Services.

Edgar Lacson, president of the Employers’ Confederation of the Philippines, appealed for unity with the employees, saying “We’re not your enemies.” –TJ Burgonio, Philippine Daily Inquirer