ECOP warns gov’t against immediate wage hike

The business community cautioned the government yesterday against granting an immediate increase in the salary of workers nationwide.

The Employers Confederation of the Philippines (ECOP) said any new salary adjustments could trigger the closure of commercial establishments and only worsen the country’s unemployment problem.

ECOP president Rene Soriano said small and medium enterprises, which make up 99 percent of firms nationwide, cannot afford to give additional pay to their workers due to the prevailing economic slump.

"Economic figures dictate against salary increase," he said.

Militant workers are demanding an increase in wages to help them cope with possible price increases arising from the imposition of the expanded value-added tax (EVAT).

The government is pushing for the imposition of the EVAT to bring down the country’s budget deficit.

Soriano agreed that the higher VAT could trigger increases in the prices of essential commodities and services.

But he pointed out that any salary increase must be based on productivity and not just on the prices of commodities to avoid inflation.

Soriano said the government should consider the EVAT as an "economic burden not only to workers but to employers as well."

The government must study the situation carefully because a salary increase, he said, "if not given appropriately could also trigger unemployment."