Employers ask Congress to shelve legislated wage hike

After expressing support for a salary hike through regional wage boards, businessmen now want Congress to junk any plans of pursuing a legislated wage increase.

The Employers Confederation of the Philippines (ECOP) instead called on Congress yesterday to abide by the agreement between businessmen and Malacañang.

"The President has expressed her position on the wage issue. Congress should take the cue and shelve plans for a legislated wage hike," ECOP president Rene Soriano said in a statement.

Soriano maintained that adjusting the national minimum pay through legislation is "counterproductive" as it fails to consider the realities and differences of the condition of workers in each region.

He added that the proposed P125 across-the-board legislated wage hike now pending in Congress would scare off prospective investors and bloat unemployment as well as jack up prices of commodities if approved by legislators.

"We should de-politicize the issue of wages and confront it in the broader perspective of its role in the realities of the market and its effectiveness as a tool of wage and income policy in promoting social and economic development," Soriano said.

Other business groups have agreed to sit down with the government and discuss the possibility of a salary hike through regional wage boards even though the boards are only allowed to adjust wages once a year.

Employers earlier strongly objected to the growing clamor from various labor unions for the immediate enactment of a law providing a P125 across-the-board salary hike for workers nationwide.

Workers are demanding the legislated wage hike to help them cope with the effects of the implementation of the expanded value-added tax (EVAT) last Nov. 1

ECOP said wage setting is best left to the tripartite partners, which were empowered to raise wages under the Wage Rationalization Act.

Better deficit?

In another development, President Arroyo said yesterday the government may register a better-than-projected yearend deficit owing to the P37 billion in savings generated through spending cuts and non-tax revenue measures.

In her speech at the 31st Top Level Management Conference of the Kapisanan ng Brodkaster ng Pilipinas (KBP) in Baguio City, the President said her administration would continue to field non-tax revenue measures and to make "palpable cuts in unnecessary government spending."

"Our national government has saved some P37 billion from our budget deficit ceiling," Mrs. Arroyo told television and radio executives. "Mostly because of our skillful treasury operations, better (Philippine) bond prices and our stronger peso, (we) have reduced our debt by that amount."

She said what was good about the savings is that it was not generated through reduction in infrastructure and social spending.

The government aims to achieve a P180-billion deficit for 2005 and seeks to balance the budget by 2009 through a slew of revenue measures, principally the EVAT.

The President repeatedly defended the EVAT saying it would help reduce the country’s debts and allow for increased spending on infrastructure, health, education and other social services.

Mrs. Arroyo earlier asked Finance Secretary Margarito Teves to study the possibility of "pre-paying" a portion of the country’s debts owing to the government’s improving fiscal position.

She also urged the broadcast executives to meet with government economic managers "so that you can hear firsthand the good news about our country."

"The backdrop of the peso and the market as the best performers in Southeast Asia give us now the best opportunity to bring the good news to the people so that we can reap their confidence beside that of the world," the President said.

She called on the media to do their "patriotic task" to convince the people of "the need for full implementation of economic reforms next year" which could include raising the VAT to 12 percent in 2006. — Mayen Jaymalin, Paolo Romero