Palace won’t support legislated wage hike

Malacañang said yesterday it will not support any legislated wage increase, but could not say whether President Arroyo would veto a bill granting an increase in workers’ salaries once it is passed by Congress.

Press Secretary Ignacio Bunye said the Arroyo administration does not want to appear anti-labor but the welfare of both workers and employers must be taken into consideration.

"We appreciate the concerns of the House of Representatives for the welfare of the ordinary wage earner but we maintain that the regional wage boards will be the better medium for determining the actual needs" of workers, he said.

Bunye said they "know for a fact that the situation varies from region to region and the regional wage boards, we believe, will have a better feel of what particular circumstances are obtaining in their particular areas."

The House approved on second reading Wednesday night a bill seeking a P125 across-the-board increase in the daily wage of workers nationwide despite the opposition of business leaders to a legislated wage adjustment.

The increase, as proposed by House Bill 345, would be spread over three years — P45 on Oct. 1 of this year, P40 on Oct. 1, 2007, and another P40 on Oct. 1, 2008.

The President had earlier supported a legislated wage hike but backtracked after a recent meeting with businessmen, who said they could not afford such an increase.

"We would also like to be realistic and we would like to have a balance. We have to balance the interest of the wage earners as well as those who are paying them," Bunye said. "We believe we can reach a win-win situation by going through the regional wage boards."

He said it would be best to wait for the Senate’s move on this issue before speculating on what the President would do in case the legislated wage hike bill is passed by Congress.

"It is difficult to preempt the Senate. Let’s wait for the action in the other chamber. But the President herself has voiced the opinion that considering the regional differences, perhaps the regional wage boards will be the better instrument or mechanism for determining wage hikes," Bunye said.

He added that they don’t know what the final version will be once the bicameral committee hammers out the differences between the House and Senate versions.

The House also passed another bill to complement the wage hike bill. This measure seeks to exempt wage earners from income tax and grants all tax filers additional personal exemptions.

By the congressmen’s calculation, the tax exemption measure would save minimum wage workers about P30 a day.

Speaker Jose de Venecia Jr. said the wage increase and tax exemption bills should help workers cope with the rising cost of living. He said he hoped the staggered formula would be acceptable to employers.

Zamboanga del Norte Rep. Roseller Barinaga, labor and employment committee chairman, said the approval of the measure is a triumph for representatives of militant party-list and labor groups who have been pushing for a legislated wage increase since seven years ago during the 11th Congress.

It is also a victory for his committee and the 125 authors of HB 345, he said.

Another author, Deputy Majority Leader Edcel Lagman, said the unabated increases in the prices of commodities and fuel have eroded workers’ purchasing power and have prompted lawmakers to support a legislated wage adjustment.

Citing studies, Lagman pointed out that as of March 2006, the Filipinos’ purchasing power "had dipped to only 73 centavos per peso, depressing the P325 highest minimum wage to a meager P233.48."

He also said that contrary to businessmen’s claims, labor constitutes only 10 percent of production costs.

The real problems besetting Filipino employers are high interest rates, high power costs, poor infrastructure, smuggling and unfair foreign competition, he added.

Wage hike for overseas workers?

Meanwhile, recruitment agencies warned that passing the legislated wage hike could cost the country its competitive edge in the international labor market if overseas Filipino workers (OFWs) will seek an increase in wages from their foreign employers.

"It follows that if we want to attract applicants for jobs abroad, then we have to raise their salaries, too. The country has competitors in the labor market, like India, Sri Lanka, Thailand, Vietnam and some others whose workers are willing to work for less compared to Filipinos who are governed by salary scales set down by the Philippine Overseas Employment Authority," said Pilipino Manpower Agencies to Taiwan (PILMAT) president Jackson Gan in a letter to Mrs. Arroyo.

Gan, who is also vice president of the Federated Association of Manpower Exporters Inc., said the Philippines will risk losing the competitiveness of OFWs if they ask for higher salaries from their employers since the ordinary worker here will be receiving higher wages.

He said recruiters oppose the proposed wage hike, claiming that the increase in the minimum wage would bring the minimum monthly wage of ordinary workers to P12,000. This would prompt recruitment agencies to ask their foreign principals to raise the salaries of OFWs who work abroad.

Gan said they are asking President Arroyo to study the matter seriously, looking into the potential economic impact of a legislated wage hike at a time when a lot of companies here in the Philippines are still trying to cope with the latest increases in the fuel, salaries and the cost of doing business in the Philippines.

Meanwhile, the Employers Confederation of the Philippines (ECOP) said the approval of HB 345 is an "unconscionable act" that could do more harm than good in the long run.

In a statement, ECOP president Rene Soriano warned of an "economic pandemonium in the offing" once the wage hike bill is passed into law. He said this economic pandemonium would exact a heavy toll on the economy as firms that could not afford the wage hike would be forced to close shop or lay off their workers.

"The (legislated wage hike) will cripple the economy and worsen the wage competitiveness of the Philippines compared to its neighbors in Southeast Asia. As it is, the Philippines already has the highest minimum wage rates or entry level for unskilled workers as adjusted to productivity in the region," Soriano said.

The militant labor group Kilusang Mayo Uno said it will continue to push for the passage of HB 345, claiming that it would provide workers with the much-needed economic relief they need amidst rising fuel costs and higher prices on basic goods and commodities.

On the other hand, Labor Secretary Patricia Sto. Tomas said although the regional wage boards have already started working on wage hike petitions filed by various groups in Metro Manila and some provinces, they would implement a legislated wage increase if passed into law.

"It’s simple. If they pass it, we will implement it," she said.

Sto. Tomas said this is why she wants the public to know how wage petitions are being decided by the wage boards.

"They are trying to find out if it would be fair, looking into the needs of the workers and the capacity of the employers to pay," she said. — With James Mananghaya