MANILA, Philippines — While minimum wage earners in Metro Manila will enjoy higher pay and a more substantial 13th month pay, labor groups are unhappy with the new hike, which is way below their demand of an increase of P334 a day.
Labor Secretary Silvestre Bello III yesterday announced that the Regional Tripartite Wages and Productivity Board (RTWPB) granted a P25 pay hike as well as ordered the integration of the existing P10 cost of living allowance (COLA) to the daily basic pay for workers in Metro Manila.
“Upon the effectivity of the new wage order, the daily minimum wage in Metro Manila will be P537 from the current P512 a day,” Bello said.
National Wages and Productivity Commission (NWPC) executive director Criselda Sy noted that the current Metro Manila minimum pay of P512 includes the P10 COLA.
Sy explained that COLA is not part of the basic pay and is not included in the computation of overtime pay as well as 13th month pay.
“Under the new wage order, the P10 is integrated in the basic pay. It is now included in the computation of overtime pay and (so) workers will enjoy bigger take home pay,” she said.
Sy said the NWPC will affirm the new wage order once it verifies that the RTWPB has complied with all the procedures of wage fixing.
After the affirmation, Sy added, the NWPC will return the wage order to the RTWPB for its publication. The order will take effect 15 days after it is published in a national newspaper.
Sy, however, clarified that the amount granted by the RTWPB was a balance between the need of workers and the capacity of enterprises to pay additional labor cost.
Sy warned that a higher wage adjustment could lead to another round of inflation if the economy is unable to absorb the impact of the pay increase.
Since more than 90 percent of commercial establishments in Metro Manila are micro-enterprises, Sy said, they cannot afford a higher amount.
Workers may appeal the RTWPB decision within 10 days of its publication, but no wage order has ever been reversed, Sy noted.
NWPC said compliance with the existing minimum wage rate in Metro Manila is 87 percent.
Malacañang said the wage hike could still be adjusted “depending on the economic conditions.”
“Perhaps… Presently, that is what they found out, that’s enough. But I guess it’s always subject to change, depending on the economic conditions,” presidential spokesman Salvador Panelo said, when asked if he thinks the increase would be enough for workers to cope with rising prices.
For its part, the Bangko Sentral ng Pilipinas (BSP) said the wage hike in the National Capital Region (NCR) has been factored in its latest inflation forecasts.
BSP deputy governor Diwa Guinigundo said monetary authorities already assumed a P25 increase for minimum wage earners instead of only P18.
“It is true that we considered only an P18 daily adjustment in minimum wage but that was in our old set of forecasts. Given the reports we received on the amount of the petitions in many regions, we decided to adjust our assumption from P18 to P25 daily minimum wage adjustment,” he said.
Guinigundo added that the wage hike was reflected in BSP’s September forecasts of 5.2 percent for 2018, 4.3 percent for 2019 and 3.2 percent for 2020.
Inflation is expected to remain elevated, exceeding the BSP’s two to four percent target for 2018 and 2019 due to higher oil and food prices, weak peso and the impact of the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.
The consumer price index leapt to a near-decade high of 6.7 percent in September from 6.4 percent in August, bringing the average to five percent for the first nine months of the year.
This prompted the BSP to raise benchmark rates by 150 basis points this year to curb rising inflationary pressures and boost the weakening peso.
But Guinigundo said the passage of the rice tariffication bill would help tame inflation back to the two to four percent target next year.
“Note that if the rice tariffication bill is approved by Congress and implemented in 2019, we expect this to reduce 2019 inflation by 0.7 percentage point from 4.3 percent to 3.6 percent, within the target range of two to four percent,” he said.
Meanwhile, the Employers Confederation of the Philippines (ECOP) said they respect the decision of the RTWPB.
ECOP acting president Sergio Ortiz-Luis assured the public that employers can comply with the new wage hike.
Not enough
Senators, labor groups and church leaders insisted that the wage hike is unlikely to offer any relief to financially suffering workers.
Senators found the P25 wage hike for the NCR insufficient and pressed the government to also cut taxes, including the value-added tax (VAT) and excise tax on fuel.
Sen. Joel Villanueva, chairman of the Senate committee on labor, said the wage hike was “inadequate considering the continuous increase in the prices of goods.”
Villanueva lauded the suspension of excise taxes on gasoline and diesel, but he added that “even if we suspend the tax on fuel this January, prices will continue to increase because of other factors contributing to inflation.”
“The most sensible solution for this is to lower the VAT rate from 12 percent to 10 percent. This will have a better effect than a wage increase of P25,” Villanueva said.
Sen. Paolo Benigno Aquino IV, who was one of the senators who voted against the TRAIN law, made the same call, noting the hardest hit are the poor and minimum wage earners.
“I hope Congress prioritizes the passage of the Bawas Presyo bill to fix the TRAIN law and ease the burden of Filipinos,” Aquino said.
Aquino filed Senate Bill 1798 or the Bawas Presyo sa Petrolyo bill in May to add a safeguard to the TRAIN law that allows for the suspension in the collection of excise tax on fuel should the inflation rate surpass the country’s predicted target for three consecutive months.
Aquino added that reducing the cost of petroleum products would not only affect fare prices but also have an indirect effect on prices of food and other goods in the market.
“(A P25 increase) is alms (and) not relief to (the) overworked yet underpaid NCR workers,” Partido ng Manggagawa said in a statement.
Two Catholic bishops yesterday agreed with the labor groups, insisting that wage workers of Metro Manila should get more than a P25 increase in their salaries.
Manila Auxiliary Bishop Broderick Pabillo, chairman of the Catholic Bishops’ Conference of the Philippines-Episcopal Commission on the Laity, said “P25 is really a measly amount” that cannot cover the rising cost of commodities and services.
“I believe our ordinary workers deserve to receive more. I hope and pray that our government agencies and officials will reconsider the possibility of a bigger increase,” Cubao Bishop Honesto Ongtioco said. – With Lawrence Agcaoili, Alexis Romero, Paolo Romero, Evelyn Macairan