Exporters group thumbs down wage hike plea

MANILA, Philippines - Exporters are opposing calls to implement  wage hikes, arguing such would hinder job creation and economic growth.

The  Philippine Exporters Confederation Inc. (Philexport), citing the letter of its president Sergio Ortiz-Luis Jr. to Regional Tripartite Wages and Productivity Board chairman Alex Avila, said that another round of wage increase would undermine the viability particularly of small and medium enterprises (SMEs).

Ortiz-Luis said SMEs play a vital role in job generation and livelihood opportunities.

The  Trade Union Congress of the Philippines has sought a P136 increase in the daily minimum wage of workers in the National Capital Region (NCR) and the P734 minimum wage hike proposed by the Association of Minimum Wage Earners and Advocates to be implemented in equal tranches of P146.80 over a period of five years. 

The wage hike petitions were filed citing inflationary factors, the recent increases in the fares of the Metro Rail Transit and Light Rail Transit, and impending water and electricity rate increases. 

“We at Philexport remain consistent in our position against barriers to trade competitiveness, especially against our SMEs which will be directly and adversely affected by such increases. We find these petitions ill-timed and irrelevant,” Ortiz-Luis said.

He cited a Philippine Institute for Development Studies report which showed that minimum wages are the biggest binding constraints to job creation and economic growth. 

“Thus, this will again provide a blow on our twin problems of unemployment and poverty,” he said. 

A wage increase, he added, would also jack up inflation, as manufacturers and service providers would pass on extra costs that could no longer be absorbed by consumers or the workers and other suppliers.

At present, the labor wage in NCR is one of the highest in Southeast Asia.

“This clearly makes NCR one of the most expensive regions to do business with,” Ortiz-Luis said.

Further, the Philexport concurred with the position of the Employers Confederation of the Philippines that the P734 increase payable in equal tranches over a period of five years “has absolutely no basis in law and does not conform to the prescribed standards and criteria for wage fixing.”