Even highly-skilled employees in the business process outsourcing sector are seen to benefit from the P15-increase in the daily minimum wage for private sector workers in Metro Manila as employers seek to correct the wage distortion caused by the wage hike.
In a statement on Sunday, House committee on higher and technical education chair Pasig City Rep. Roman Romulo said that while several call center employees may not be directly covered by the increased minimum pay, the incremental jump in wages will nonetheless create wage distortions in their favor.
The Labor Code defines wage distortion as “a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.”
It is usually corrected through commensurate pay increases for those employees not initially meant to be covered by the specified increment.
Over half a million minimum wage workers in the private sector in Metro Manila are seen to benefit from the National Capital Region’s Tripartite Wages and Productivity Board’s decision last week to increase the minimum wage by P15.
Upward revisions
The new P481 statutory floor wage for non-agriculture sector workers, as well as the P444 new minimum wage for those in agriculture, will take effect sometime next month after the order has been published in newspapers.
The increase is expected to set off similar upward revisions to the minimum wage in other regions across the country.
Romulo expressed optimism the projected commensurate increase in call center workers’ salaries will not dampen the rapid expansion of the country’s highly labor-intensive, information technology (IT) and BPO sector.
“We do not see the P15-inrcease in the daily minimum wage (for private sector workers in Metro Manila) influencing the decision of BPO players to either step up, or slow down hiring,” he said.
Even with the anticipated wage increase, Romulo said the Philippines remains more competitive than India and other BPO hubs since their wages are rising faster.
Forex fluctuations
He noted that foreign exchange rate fluctuations tend to have greater weight on BPO operations than wage increases since BPO firms spend for their local operations in pesos while they generate revenues in US dollars from transactions with overseas clients.
A weak peso against the dollar is considered beneficial to BPO firms. In contrast, they may be disadvantaged by a rising peso and a declining US currency.
According to Romulo, BPO firms gained more when the peso-dollar rate averaged 44:1 in 2014 versus 42:1 in 2013.
The IT and Business Processing Association of the Philippines sees the sector directly employing up to 1.3 million Filipinos and yielding some $26 billion in annual revenues by 2016.
The sector includes contact centers, back offices, data transcription, animation, software development, engineering design, and digital content. — Xianne Arcangel/LBG, GMA News
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