At this time when company survival and job preservation are their priority, employers doubt the success of any petition of a wage increase.
Sergio Ortiz-Luis, president of the Employers Confederation of the Philippines (ECOP), said talks of wage increase of any form could only dampen interest of foreign investors scouting for sites to put in their money.
This call, Ortiz-Luis said, comes at a time when the Philippines is competing fiercely with Thailand and Vietnam which are recovering much faster from the economic downturn brought by the new coronavirus 2019 pandemic.
Labor groups have sounded off calls for a wage hike but have yet to petition for it formally.
“While we sympathize with the situation of the labor sector and we understand their predicament in the light of rising prices of food, the chances of any wage increase at this time is slim,” he said.
Ortiz-Luis said even prior to the pandemic, a pending wage hike petition did not prosper, “what more now?”
Any wage increase, he said, would only exacerbate the condition of companies, most especially what remains of micro enterprises struggling to survive.
Ortiz-Luis said half of micro enterprises which make up 90 percent of all enterprises have closed.
He said even the Department of Labor and Employment has allowed employers to adopt flexible schemes to ensure enterprises stay afloat.
“Companies that are having a hard time were allowed to reduce the salaries of their workers as long as these are not below minimum wage. Others put some of their staff on furlough or on rotation just so they can keep their jobs. If these companies are to incur additional payroll costs, they might be forced to close down or lay off workers at the very least,” he added.
Ortiz-Luis estimates there are five million workers in areas under general community quarantine that are unable to work for several reasons.
This also comes at a time of a spate of job cuts in bigger companies and closure of others.
Ortiz-Luis hopes the government would be able to address the price increase issue business confidence is still eroded by insufficient demand due to low sales volume, stiff competition, disruption in the supply chain not to mention the quarantine restrictions still in place??
The ECOP board believes any wage hike this year is untimely and uncalled for.
“The priority right now is to preserve jobs. Unemployment remains high although admittedly it has improved compared to the rates from March to May of last year. The momentum of bringing back the workers to the jobs that were displaced as a result of the pandemic must be sustained,” said Rolando Moya, ECOP director-general.
Moya said the impact of any wage increase especially to micro, small and medium enterprises (MSMEs), at least to those which are back in operation, will particularly be debilitating.
“In the case of MSMES which are not yet operating, we can’t expect them to resume operations if suddenly they will be confronted with a wage hike,” he added.