Garment firms bat for productivity-based wages

The garments sector wants to move away from legislated wages and is pushing for the implementation of productivity-based wages.

According to Asuncion Kalalo of the Garments Business Association of the Philippines (GBAP), productivity-based wages would make the garments sector more productive as the wages of workers would depend on how much they produce.

Donald Dee, chairman of the Confederation of Garments Exporters of the Philippines (CONGEP), agreed that the legislated minimum wage of between P280 to P300 (depending on the region) or $5 is the highest in ASEAN as compared to the benchmark of only $2.

"The legislated wage system limits the ability of firms to give incentives to long-time and skilled workers," Dee said.

"The system is unfair especially since new, unskilled workers get the same minimum wage as those workers who may have been working for the company for 30 years," he added.

The garments sector is pushing for the implementation of productivity-based wages as a means of making the sector more competitive pending the loss of the garments quota system next year.

Garments and Textile Export Board (GTEB) Executive Director Serafin Juliano confirmed that the garments industry wants to "move away from legislated wages in favor of productivity-based wages."

Such a move, Juliano said, would not necessarily need legislation as there is the existing Barangay Micro Business Enterprise (BAMBE) law which allows exemption from the Minimum Wage Law for small businesses.

The garments sector provides employment for about 400,000 Filipinos, accounting for 14 percent of total employment of some 2.9 million workers in the manufacturing sector.

The garments industry is the country’s second biggest dollar earner next to electronics.

It contributes approximately $3 billion in export receipts or an average of eight percent to the country’s total export earnings for the past five years from 1997 to 2001.