House won’t withdraw P125 salary hike bill despite protests from businessmen

The House of Representatives is not withdrawing its final approval of the P125 wage increase bill even in the face of strong opposition from businessmen to a legislated salary adjustment.

The chamber approved the measure before Congress went on its three-week Christmas break on Dec. 16.

Under the bill, minimum wage earners would be given a salary increase of P125 a day spread over three years: P45 in the first year, P40 in the second and another P40 in the third year, minus any amount that the regional wage boards have granted.

"The bill has already been approved on third and final reading. We cannot withdraw that approval. We can no longer do anything about it," Majority Leader Prospero Nograles said yesterday.

He said complaining businessmen should bring their grievances to the Senate, to which the measure would be referred when Congress resumes session on Jan. 22.

"They can lobby with the Senate for its disapproval," he added.

Senators, however, are reportedly in favor of the House-approved bill granting a P125 wage increase.

Opposition Sen. Panfilo Lacson was quoted as saying that he and his colleagues in the minority, including labor committee chairman Sen. Jinggoy Estrada, will vote for approving the measure.

"In fact, we intend to propose to either increase the P125 or spread it over two years, instead of three years — P85 on the first year and P40 on the second year," he said.

But Estrada said the approval by the House of the P125 legislated wage increase is a form of blackmail.

"I think it was blackmail on the part of the House of Representatives. Why? Because if they passed the P125 across-the- board increase, they know fully well that our economy will collapse," Estrada pointed out.

The opposition senator said he will call for a public hearing over the issue on Thursday and draft the Senate’s "counter-bill."

Estrada said the hearing will determine the sentiments of the employers’ sectors and the labor groups.

Estrada claimed even before the House passed the proposed P125 wage increase, there are already problems on its implementation.

"If you have 50,000 workers, it would translate to P671 million a year, (the amount) to be spent by each company and I don’t think that is affordable and a number of companies will shut down their operations," Estrada said.

Estrada echoed the position made by the Philippine Chamber of Commerce and Industry (PCCI), the Philippine Exporters Confederation, Employers Confederation of the Philippines (ECOP), Philippine Bankers Association of the Philippines, Federation of the Filipino-Chinese Chambers of Commerce and Industry, Makati Business Club and several other business groups.

These groups decried the move of the House as to "have created a Trojan horse ticking like a bomb in the passage of HB 345 that mandates the P125 wage hike."

Estrada branded the approval as a form of blackmail to force the Senate to approve the bill.

"If this (P125 legislated wage increase) remains unacted upon, the House of Representatives will point the blame to the Senate, and that we at the Senate are inutile and that we are sitting on this legislation," Estrada said.

House Minority Leader Francis Escudero, on the other hand, said he and other opposition congressmen would block any move by the majority to recall their approval of the wage increase bill.

"We have been pushing for this salary adjustment for about nine years. Finally, we have succeeded. They cannot deprive us and workers of that sweet victory," he said.

Besides, Escudero said the "small increase that is made smaller by giving it in three installments is just enough to prevent wages from being eroded by inflation."

He appealed to businessmen to accept the wage hike since it is they who are benefiting from the economic growth that the administration has been crowing about.

"That growth is not being felt by workers and lowly wage earners because it is making them poorer. It is the higher taxes that they pay that are fueling that growth, which in turn benefits businessmen," he said.

He pointed out that traders are spared from paying the higher value added tax (VAT) as the law entitles them to claim input VAT.

Nograles said businessmen are crying over spilled milk in complaining about the House approval of the P125 wage bill.

He said he delayed scheduling the measure for third and final-reading approval to give employers enough time to communicate to House leaders their stand on the measure.

"We approved this on second reading in June or July. But Zamboanga del Norte Rep. Roseller Barinaga, labor committee chairman, informed me that management representatives boycotted all hearings conducted by his committee. So we decided to wait for them to communicate with us," he said.

He said no employer or management representative "has written us or talked to us during the five-month or six-month waiting period.

"We took that to mean that they accept the P125 increase in the daily wage spread over three years," he added.

Employers had warned that a legislated wage adjustment could drive small and medium-scale businesses to close shop, resulting in more joblessness.

‘Negative externalities’

The National Wages and Productivity Commission (NWPC) said the proposed wage increase would bring more economic hardship to workers.

In a study made by NWPC, the proposed measure, if implemented, would bring about "negative externalities."

"Such a policy has a high economic and social cost," the NWPC said.

The agency noted that only a small percentage of workers would benefit from the measure.

There are about 5.7 million wage and salary workers in the private sector who are supposed to receive the P125 legislated wage increase as compared to 16.7 million workers in the government.

Although government workers would not be covered by the legislated wage increase, they are likely to get affected by the consequent higher prices of goods and services as the result of implementation of the wage measure.

The NWPC warned the implementation of P125 legislated wage increase would drive away foreign investors.

Labor officials earlier warned Congress against enacting another legislated wage increase, which had earlier contributed to the dramatic growth of unemployment in 1989 when it was last enacted.

The Department of Labor and Employment (DOLE) said the existing mechanism of the regional wage boards should be allowed to determine the wage increase.

But if the measure is enacted, DOLE said they have to abide by the law and implement it. —With Christina Mendez, Mayen Jaymalin