The Employers Confederation of the Philippines (ECOP) warned of the potential repercussions of the legislated wage hike proposal which it said could lead to layoffs and business closures.
Since the wage hike is not profit-based, companies will try to offset the higher payout by either raising prices or shedding workers, according to Sergio Ortiz-Luis, ECOP president.
In a radio interview over the weekend, Ortiz-Luis called for a more balanced and inclusive representation of all the sectors to be affected by the proposed P150 across-the-board minimum wage hike.
“Companies will be forced to raise their prices, reduce their workforce to be able to pay for the higher wages. Worse, they could close shop if they cannot afford to give those wages,” Ortiz-Luis said.
He added micro, small and medium enterprises (MSMEs) as well as informal workers also be allowed to have their say in these talks on wage hikes.
ECOP has opposed the legislated big wage hike proposed by Senate President Juan Miguel Zubiri saying this will hurt MSMEs, which barely make a profit, and will not benefit informal workers, who have no employer to increase their salaries.
Ortiz-Luis said the large firms capable of paying the wage increase only make up less than 2 percent of all Philippine companies, as more than 98 percent are MSMEs, which are the biggest providers of jobs in the formal sector.
Ortiz-Luis said, only 10 percent of the 50 million in the labor market are formal minimum wage earners, while the remaining 90 percent have no employer. These 90 percent are comprised of informal workers such as fisherfolk, farmers, public transport drivers, and the underemployed, all of whom are not going to benefit from the legislated wage hike.
ECOP prefers to have wage increase proposals tackled by the tripartite wage board where issues are carefully reviewed and all affected sectors and relevant government agencies are represented.
In March 2023, Zubiri filed Senate Bill No. 2002 or the Across-the-Board Wage Increase Act of 2023, which seeks to raise wages in the private sector across all regions by P150.
At present, the National Capital Region has the highest daily nominal wage rate at P570 (non-agriculture), while the lowest is at P316 (non-agriculture) for the Bangsamoro Autonomous Region in Muslim Mindanao.
The prescription of minimum wages in the private sector falls under the ambit of the Regional Wages and Productivity Boards, but they are constrained to issue only one wage order per year, unless they declare supervening conditions.
