THE Department of Labor and Employment (DOLE) yesterday warned the Senate of a possible increase in the operational expenses of businesses due to the proposed legislated wage increase of P100 a day for private sector minimum wage earners.
In a press conference, Labor Secretary Bienvenido Laguesma said operational expenses of businesses may increase by at least 15 percent if they were mandated to increase the minimum wage rate by P100 per day.
“We conducted a simulation, where we looked into the impact of the wage hike on employees and businesses. If I remember right, it is around 15 to 20 percent increase,” said Laguesma.
“That could be the possible effect based on our simulation activity. Of course, it will have a corresponding impact on businesses,” he added.
He told senators that an increase in operational expenses would ultimately be passed on to consumers.
“It will have a chain reaction. If I am the producer of sardines, where will I get the additional 15 to 20 percent? It will affect everybody,” said Laguesma.
The labor chief said such an assessment is part of the technical input they have submitted to the Senate with regard to the proposal to increase the minimum wage rate through legislation.
“We were asked to provide technical inputs, which will be helpful in their deliberation,” he said.
He, however, stressed that DOLE is leaving the decision-making to the hands of lawmakers.
“The power to legislate is with the House of Representatives and the Senate. We won’t preempt what they should be doing,” said Laguesma.
Last Wednesday, Sen. Jinggoy Estrada sponsored a proposed law seeking to grant a wage increase of P100 a day across the country.
The move is estimated to benefit some 4.2 million employees and workers in the private sector receiving the minimum daily salary.
For DOLE’s part, Laguesma stressed that all Regional Tripartite Wages and Productivity Boards (RTWPB) have been performing their duties.
Proof of this, he said, is that 15 of the 16 regional wage boards have already had their respective wage orders.
Laguesma said the RTWPB in the Davao Region has already conducted a public consultation.
