Philippines: Employers Oppose 75-Peso Wage Hike

Apr. 18, 2007

MANILA, April 18 (PNA) – The Employers Confederation of the Philippines (ECOP) yesterday opposed the move by the Trade Union Congress of the Philippines (TUCP) to press for a P75 across-the-board pay hike for private sector workers in the metropolis via petition before the National Capital Region (NCR) wage board.

ECOP President Sergio Ortiz-Luis, Jr. questioned the basis of the proposed pay hike, saying the P25 wage increase granted by the NCR wage board in July last year took into account the possible erosion in workers purchasing power through an anticipated inflation rate.

For this year, the Bangko Sentral ng Pilipinas (BSP) projects the inflation rate to be pegged at 4.3% to 5.0%.

Ortiz-Luis bewailed that since the enactment of Republic Act 6727, otherwise known as the Wage Rationalization Act, minimum wages have outpaced the consumer price index (CPI) and labor productivity while unemployment continues to rise.

He warned anew that setting minimum wage rates over and beyond the safety net level would lead to fewer employment opportunities for new entrants in the labor market, the unskilled and those with low levels of educational attainment; discourage business from the use of labor-intensive operations or technology against a more cost-efficient capital-intensive technology, complemented by a highly-skilled workforce; and aggravates dualism in the labor market, characterized by a narrow and shrinking formal sector and expanding informal sector.

Ortiz-Luis said employers are vigorously pushing for the promotion of market-driven wage setting and not across-the-board wage increases which are geared toward continuously increasing the benefits of the employed wage and salary workers in the formal sector and further exacerbating the inequity between those employed in the formal sector and the rest of the labor force who will not enjoy the increase.(PNA)

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