Wage hike lowest so far for Metro Manila

LABOR AND BUSINESS groups both normally reject mandated minimum wage hikes, with the former complaining the amounts are not enough and the latter decrying the added cost.

P10/day wage hike for Metro Manila

Trade unions are again up in arms over the P10 per day increase granted last week to Metro Manila workers but this time management says the adjustment — while still a challenge — is “fair.”

Minimum wages in the metropolis will rise to P429-466/day, effective 15 days after publication of the requisite order. The P10 adjustment — expected to set the cap for increases in the rest of the country — is the lowest to have been ordered for Metro Manila since minimum wages began being set by region in 1990.

The previous 17 wage orders mandated amounts ranging from P12 to as much as P30, either basic pay hikes or cost of living allowances (COLA). Last year’s increase, for example, was for a P30/day COLA.

‘FAIR’ FOR BUSINESS

“This seems to be a fair decision, staying close to inflation,” said Henry J. Schumacher, vice-president for external affairs of the European Chamber of Commerce of the Philippines (ECCP). Inflation was also cited by John D. Forbes, director of the American Chamber of Commerce of the Philippines (AmCham), who also called the increase “fair.”

Both reactions were a turnaround from last month, when the Joint Foreign Chambers — of which the ECCP and AmCham are members — wrote the Metro Manila wage board to express its objection to any increase.

Inflation fell to a four-year low of 2.1% last month, bringing the year-to-date average to 2.8% — just under the Bangko Sentral ng Pilipinas’ 2013 target of 3-5%.

Asked how the wage hike would affect business operations, the ECCP’s Mr. Schumacher said: “I don’t think it will lead to layoffs but it may well affect the hiring of more people.”

AmCham’s Mr. Forbes, for his part, said the country would remain more expensive in terms of labor costs.

“[M]inimum wage in the Philippines is still not as competitive as that of Vietnam and Cambodia. It is still much higher than Burma’s and about the same as Jakarta’s,” he noted.

For Makati Business Club Chairman Ramon R. del Rosario, Jr., his group would have no objection to the P10 increase if was the result of “adequate tripartite representation.”

“With GDP growth above 7% for the last four quarters, most large companies should be able to cope with the proposed wage increase but some small- and medium-sized businesses may find the increase challenging,” he added.

“We should also be constantly conscious of the need to remain competitive in labor costs against our Asian neighbors.”

Employers Confederation of the Philippines President Edgardo G. Lacson also cited the need to remain competitive. He claimed the “P10 should have been only P7” and noted that non-compliance carried steep penalties for employers.

A ‘JOKE’

The Labor department, in announcing the increase last Friday, said the tripartite wage board had “unanimously” agreed on the P10/day adjustment. But the Trade Union Congress of the Philippines (TUCP), which is represented in the board and had asked for an P83/P85 increase, has branded the decision as a “joke.”

Alan A. Tanjusay, spokesperson of the TUCP faction that filed an P85 petition, said: “The P10/day increase is outrageous! This amount cannot even buy half a kilo of rice or take a worker to work and back home.”

“This amount is a joke, a painful joke to working class who worked so hard to improve our economy. We will definitely appeal the decision,” he said in a text message.

The TUCP group headed by former senator Ernesto F. Herrera, which separately filed for an P83/day increase, was not available for comment. Both groups had cited rising food, fuel and utility costs as necessitating wage increases.

The left-leaning Partido ng Manggagawa (PM) also called the P10 increase a joke given the ongoing “pork barrel” scandal.

“Janet Napoles steals P10 billion from the people’s money and the government offers P10 in coins to workers as a consolation,” PM spokesperson Wilson Fortaleza said, referring to the businesswoman who allegedly masterminded the channelling of legislators’ discretionary funds into spurious nongovernmental organizations.

LEGISLATION PUSHED

The militant Kilusang Mayo Uno (KMU), which has rejected regional wage-setting and wants Congress to again start legislating pay hikes, said it would launch mass protests “in the coming weeks and months to press for a significant wage hike and the abolition of the pork barrel system.”

The KMU said it would push for approval of House Bill 253, refiled in July by Anakpawis partylist representative Fernando Hicap, calling for a P125/day across-the-board increase.

The last legislated wage hike involved P15-25/day increases under Republic Act 6727, also known as the Wage Rationalization Act of 1989, which henceforth turned wage-setting over to regional boards composed of representatives from labor, employers and the government.

Metro Manila minimum wages have since been increased 17 times prior to last week’s wage order. New petitions are not entertained within a year from the last wage increase unless a “supervening condition” exists. –Businessworld