Economic zone authority eyes ‘special wage package’

by Roy Stephen C. Canivel, Businessworld, November 23, 2016

THE PHILIPPINE Economic Zone Authority (PEZA) hopes to offer cheaper wages to investors in areas under its jurisdiction, offsetting lower pay with housing and education benefits, as well as livelihood projects, PEZA Director-General Charito B. Plaza told reporters last Nov. 17.

Ms. Plaza said she had met with Labor Secretary Silvestre H. Bello III to form a technical working group that will draw up the finer details of a “special wage package.”

“I had a good talk with Secretary Bello and we agreed to come up with a technical working group with PEZA and the Department of Labor and Employment so we could come up with a special wage package for the workers and locators of economic zones. ‘Yun ang isang tinitigan (We looked at) which countries provide cheap cost of wage,” she told reporters last week on the sidelines of the seventh anniversary party of property consultancy firm, KMC Savills, Inc.

“It will be cheaper — the trend in the world now is in special economic zones. We are now competing in terms of benefits and incentives for investors,” she noted.

“Pagaaralan pa namin (We will still study it) because we could include a package of other benefits for workers in the ecozones. For example, we might provide them with housing, scholarships for their children, livelihood for their families. There are actually many ways.”

Comparative data as of Sept. 30 on the Web site of the National Wages and Productivity Commission showed Metro Manila — the Philippines’ benchmark — with a $282.07-305.06 monthly minimum wage range against Bangladesh’s $66.04, Cambodia’s $140, China’s $149.85-328.16, Indonesia’s $88.78-239.32, Laos’ $108.51, Malaysia’s $222.51-241.86, Myanmar’s $84.81, Thailand’s $259.92 and Vietnam’s $136.75-154.40.

Ms. Plaza cited Thailand and Vietnam as some of the Philippines’ closest competitors for foreign investors.

Labor Undersecretary Joel B. Maglunsod, who had been appointed by President Rodrigo R. Duterte from the leadership of the left-wing Kilusang Mayo Uno, said he has yet to see Ms. Plaza’s proposal but maintained that the scheme would not be acceptable.

“Hindi acceptable ‘yun sa mga workers (That’s not acceptable to workers),” he said in a phone interview yesterday.

“Dapat hindi malagay sa disadvantage ‘yung manggagawa natin. Ang minimum protection diyan (Our workers should not be put at a disadvantage. The minimum protection) is strict implementation general labor standards.”

The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) shared this opinion.

“We are not asking for charity. We are asking for a just share of the wealth that is being generated in the firm or cooperation,” ALU-TUCP Vice-President Luis M. Corral said in a phone interview yesterday.

“PEZA DG is badly serving President Duterte if this is her way to address his call for a more inclusive society. A more inclusive society comes with efficient take-home pay and the self respect that goes with it,” Ms. Corral stressed.

“In the first place, those are the best jobs in many communities. By removing the minimum wage which is low enough already, you would only create other social problems,” she explained.

“Why not partner respect for the minimum wage with their offer in schools? That would increase productivity. That would provide more options for parents struggling to find education for their children. It will show that employers and government care, rather than creating a tradeoff.”

John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said his group awaits details of the proposal.

“We look forward to learning the details from PEZA directly. This may be in line with a recommendation in the ‘Arangkada’ manufacturing policy brief which, along with other incentives, could lead to considerable investment and job creation,” he said in a text message, referring to foreign chambers’ annual initiative to recommend reforms and other measures to make the country more business-friendly, and track the government’s progress in acting on them. —