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THE
government should opt for other stimulus measures to
improve the people’s purchasing power as wage hikes
would not be enough to enable them to cope with
skyrocketing costs of food, fuel and other basic
necessities, senators said Monday.
Ironically, the Executive that is normally conservative
in pushing wage hikes for fear of stoking inflation and
sparking business shutdowns or retrenchments sounded
more gung-ho about prodding local wage boards to give
the pay increases.
In order
to help Filipinos cope with rising oil and food prices,
the Cabinet on Tuesday urged regional tripartite wage
boards to consider increasing wages of Filipino workers,
according to National Economic and Development Authority
(Neda) officials.
Neda
Acting Director General Augusto Santos told reporters
the wage hike may be done by increasing the basic pay or
the Cost of Living Allowance (Cola) of workers.
“We
decided to let the regional tripartite wage board
determine the salary increase. The wage increase needs
to be approved by each regional tripartite wage boards,
since the wage increase varies from one region to
another,” Santos said.
“As you
know, the Trade Union Congress of the Philippines [TUCP]
has proposed an P80 wage increase in Metro Manila, while
sectors in Region 7 proposed an increase of P50,” he
added.
However,
Santos believes a wage hike at this time will not cause
the inflation rate to increase. He explained that the
current inflation rate is driven by short supply rather
than high demand.
Santos
thinks the wage hike will be able to cushion the effect
of some dampening on personal-consumption expenditure
due to high commodity prices. He said the government
expects some belt-tightening on the part of consumers.
“There
will be more belt-tightening [in the sense that] some
less important expenditures must be foregone in place of
more important expenditures, such as food,” Santos said.
There
was word of caution from the Senate, though. “The
government must think of other ways to put money in the
pocket of Juan de la Cruz,” Sen. Francis Escudero told
reporters. One such measure, he suggested, is to enact
into law a long-pending bill that would exempt
minimum-wage earners from paying withholding taxes.
The
remedial measure has been approved by the Senate ways
and means committee, which he chairs, but the Senate
cannot take up the bill in plenary because the
Constitution requires that revenue measures must emanate
from the House of Representatives.
Another
pending proposal being endorsed by the ways and means
committee aimed at improving the people’s purchasing
power is a bill removing the 12-percent value-add tax on
oil and electricity. But like the minimum wage
withholding tax exemption bill, he said the Senate could
not approve it on the floor because the House has yet to
pass a counterpart measure.
At the
same time, Escudero backed the release of regional wage
hike orders that he said should be complemented by the
strict implementation of prevailing rates before Labor
Day “so the wage erosion caused by rising rice prices,
which in low-income households account for a third of
food expenses, can be blunted.”
He said
enforcing wage orders should go hand-in-hand with the
move to raise the minimum daily wage, as he noted the
alarming level of noncompliance of salary laws in the
private sector.
Escudero
noted that close to 18 percent of the 19,256 firms
inspected by the Department of Labor and Employment in
2006 were found in violation of the minimum wage law. In
addition, 10 percent and 9 percent of the inspected
firms either underpaid or did not pay their
employees the Cola and 13th month pay, both of which
are mandatory .
Due to the regionalized wage-setting process, the legal
minimum wage varies by region, with the highest at P362
per day for nonagriculture workers in Metro Manila to
as low as P180 a day for nonplantation agriculture
workers in Western Visayas.
Earlier, Neda National Planning and Policy Staff (NPPS)
Officer-in-Charge Myrna Asuncion said that although the
agency expects an increase in wages to cause commodity
prices to rise, the Neda was open to increasing
employees wages.
Asuncion
said a wage increase is feasible as long as it is within
the bounds of sound macroeconomic policies and would not
cause massive layoffs and closure of businesses.
The
Employers’ Confederation of the Philippines (Ecop) said
implementing an P80 salary adjustment would lead to mass
retrenchment or worse, the collapse of companies due to
staggering labor costs.
In Metro
Manila, the minimum wage has been adjusted 15 times
since 1989, with increases ranging from a low of P12 to
a high of P26.50. |
