Wage hikes inflationary, prioritize growth — congressmen

Wage hikes inflationary, prioritize growth — congressmen

By Beatriz Marie D. Cruz, Reporter

TOP economists in the House of Representatives brushed off proposals for a legislated minimum wage increase on Monday, citing its inflationary effects and, instead, raised the need to push for growth and productivity across all sectors.

In a news briefing, House appropriations panel senior vice chairperson, Marikina City Rep. Stella Luz A. Quimbo, said the government should focus on easing inflation and increasing productivity to lessen sectoral risks as a result of possible wage hikes in the future.

“Let us think about the timing — we must first directly address inflation, push for economic growth, and then we can talk about increases in minimum wage,” Ms. Quimbo said in a mix of English and Filipino.

“Companies will pass their wage increase to its prices… a cost-push inflation will happen,” she explained. “You will temporarily satisfy our workers who are also consumers.”

The Senate is set to debate on a proposed P100 across-the-board wage increase for all private sector workers, with Senate President Juan Miguel F. Zubiri saying last week: “Our workers are the foundation of our society, and it is their right to earn a decent pay to have a decent life.”

But Ms. Quimbo maintains: “We can increase our minimum wage once we have productivity increases.”

Echoing her sentiments, Albay Rep. Jose. Ma. Clemente S. Salceda acknowledged the need for productivity enhancements before considering minimum wage adjustments, noting that smaller enterprises would not bear the cost of mandated wage hikes.

About 99.58% of Philippines’ business establishments are micro, small, and medium enterprises (MSMEs), according to a 2021 report by the Department of Trade and Industry (DTI).

Most MSMEs are in the industries of wholesale and retail trade, motor vehicle repair, accommodation and food services, and manufacturing, DTI data showed.

Wage proposals are currently reviewed and approved by regional wage boards. The Department of Labor and Employment (DoLE) noted that 15 out of the 16 Regional Tripartite Wages and Productivity Boards (RTWPBs) issued new wage orders last year.

However, labor groups argued that the wage hikes have been insufficient amid rising prices.

Last year, Federation of Free Workers (FFW) president Jose G. Matula said that regional wage boards have failed to boost productivity and attract investment in the provinces as workers move to Metro Manila for higher pay.

Trade Union Congress of the Philippines (TUCP) legislative officer Carlos Miguel S. Oñate said a legislated wage increase would lead to better productivity and strengthen workers’ purchasing power.

Meanwhile, Mr. Salceda reiterated Congress’ push to amend the 1987 Constitution, opening the Philippine economy to foreign investors, which would result in higher wages.

Foreign investors in the Philippines give 74% more wages than local enterprises, said Mr. Salceda, who heads the House Committee on Ways and Means panel.