ECOP: Proposed P100 minimum wage a ‘catastrophe’

The Employers Confederation of the Philippines (ECOP) on Thursday raised an alarm over the proposal to increase the daily minimum wage of private sector workers by P100.

“Iyong P100 [minimum wage hike], ay naku catastrophe iyan!” ECOP president Sergio Ortiz-Luis Jr. said in an interview on PTV’s Bagong Pilipinas Ngayon.

(The P100 minimum wage hike, that would be a catastrophe!)

Ortiz-Luis made the remark after the Senate approved on second reading Senate Bill 2534  or “An Act Providing for a 100 Pesos Daily Minimum Wage Increase for Employees and Workers in the Private Sector.”

The ECOP president said that raising the minimum wage would compel companies to increase the cost of their products or reduce manpower.

“Alam mo naman ang ginagawa ng mga kumpanya, kapag nagtaas iyan ng suweldo… dalawa lang ang pwede mong gawin, idagdag mo sa presyo mo kung kaya ng merkado. Kung hindi magbawas ka ng tao. Iyon ba ang gusto nating mangyari?” Ortiz-Luis emphasized.

(You know what companies do when wages are increased… there can only be two outcomes, you increase prices if the market can absorb it. If not, you reduce the number of workers. Is that what we want to happen?)

Citing economists’ estimates, the ECOP chief said hiking the minimum wage by P100 would result in a two percentage-point increase in inflation rate.

SB 2534 is the product of several bills seeking the hike on minimum wage hike, including Senate President Juan Miguel Zubiri's version which sought a P150 across the board increase in the minimum wage of workers in the private sector.

The current version of the bill was adjusted from P150 to P100 following the regional wage boards’ hiking of the minimum daily wage rate from P30 to P89.

Last year, Regional Tripartite Wages and Productivity Boards issued wage orders for increases in the minimum wage of employees in Northern Mindanao, Zamboanga Peninsula, Cagayan Valley, Central Luzon, SOCCSKSARGEN, and Central Visayas, among others.

Ortiz-Luis also pointed out that only few workers in the labor force can benefit from increasing the minimum wage.

“Out of 52 million people in the labor market, only five million would benefit from that,” he said.

“The 84% to 90%, will not benefit since their wages are already above the minimum wage,” he added.

Interviewed on Super Radyo dzBB, Labor Secretary Bienvenido Laguesma said his department is ready to implement any wage increase should the proposed minimum wage hike be enacted into law.

“‘Yung karapatan o kapangyarihan na magpasa ng batas, ‘yan ay nasa Lehislatura. Kung may naipasang batas, ang aming magiging reaction paano naming mai-implement. Implementation aspect kami,” Laguesma said.

(The power to pass laws lies with the Legislature. If a law is passed, our reaction would be how do we implement it. We are the implementation aspect.)

The Labor chief, however, said that raising wages should be balanced and carefully studied as it would have an impact on employment, inflation, and the economy as a whole.

“Kailangan talaga ng maingat na pagsusuri (A thorough study is imperative),” Laguesma said.

Representative Stella Quimbo, vice chairperson of the appropriations committee, and Representative Joey Salceda, head of the ways and means panel raised doubts about bills seeking a legislated wage hike.

Both solons said this will result in higher prices of goods and services, and the shutdown of small and medium enterprises (SMEs).

But this position was refuted by Senator Francis Escudero, who said wage increases will not bust the economy.—Ted Cordero/RF, GMA Integrated News