BUSINESS GROUPS are asking the government to reconsider a proposed P150 wage hike, saying their companies need to remain competitive while being allowed time to recover.
“The industry was okay with the P40 approved increase but P150 seems high. That’s a 35% increase in wages, further increasing operating costs and reducing industry competitiveness,” Semiconductor and Electronics Industries in the Philippines Foundation, Inc. President Danilo C. Lachica said in a Viber message.
Senate President Juan Miguel F. Zubiri has been pushing to legislate a P150 wage hike for all daily wage earners.
The National Capital Region Tripartite Wages and Productivity Board approved last month a P40 increase in the minimum wage for workers in Metro Manila, which brought the floor on the daily wage to P610 from P570.
Ebb Hinchliffe, American Chamber of Commerce of the Philippines, Inc. executive director, said in a Viber message that the regional tripartite wage and productivity boards should determine wage level, not legislators.
“We suggest letting the tripartite decide that. Through this existing mechanism — where government, workers, and employers are amply represented — the needs of workers, the capability of enterprises, and varying conditions across industries and regions can be carefully balanced,” Mr. Hinchliffe said.
Rosemarie B. Ong, Philippine Retailers Association chair, said in a Viber message that the proposal is “not in the best interest of the economy … due to the potential inflationary effects it may have. While we understand the concerns about declining purchasing power caused by inflation and the desire to support workers, it is crucial to consider the broader impact of such a measure.”
Ms. Ong warned that such legislation could force some businesses to close.
“Approval of the wage increase could lead to difficult decisions for employers, such as adjusting prices, reducing the workforce, or even closing down. Only a small percentage of large firms have the financial capacity to accommodate the wage increase,” Ms. Ong said.
“Rising inflation has already strained businesses, particularly micro, small, and medium enterprises (MSMEs), which have faced significant challenges due to the pandemic and may still be in the process of recovery,” she added.
Inflation slowed to 5.4% in June from the 6.1% posted in May due to a slowdown in the increase of food, transport, and utility prices.
Philippine Amalgamated Supermarkets Association President Steven T. Cua said in a Viber message that the proposed wage hike would be challenging for supermarkets.
“(Supermarkets) rely on the manpower support of suppliers’ merchandisers, promo- or push-girls and coordinators to help us monitor movement of stock on a daily basis. If wages keep increasing by leaps and bounds, manufacturers and distributors will not hesitate to cut their budget for supplemental manpower,” Mr. Cua said.
“This will result in smaller chains fending for themselves in terms of merchandising these products which normally are market leaders for their categories; thus, basic necessities and prime commodities for shoppers. This will consequentially lead to less organized retailing, (less efficient) distribution and probably the shutdown of the weakest links in the food retail supply chain,” he added.
Mr. Cua proposed staggered increases until 2025 if the measure becomes law.
“Best is to increase wages in agreeable installments over a period of time, so employers go slow on lay-offs and are amply prepared for additional costs given the certainty of the time intervals,” Mr. Cua said. — Revin Mikhael D. Ochave