Presidential adviser says wage hikes should be planned out, done gradually

Presidential adviser Jose Ma. “Joey” Concepcion III on Wednesday said wage hikes in the country should be planned out and done on a gradual basis so as not to disrupt the economy, as small businesses cannot afford a one-time increase of P100.

Concepcion, Private Sector Advisory Council (PSAC) head for jobs, expressed his reservations about the proposed P100 minimum wage hike, saying not all businesses have the means for it, and some would be forced to lay off workers to be able to comply with the measure.

“I’m not saying there should not be a wage increase, but let us moderate it. Let us plan and scale it, and not do it one go because it will affect a lot of businesses, especially right now that we can see, nakikita natin ‘yung momentum eh, you can feel it, you can see consumers spending,” he said in a televised briefing.

“If we want them to continue to spend, of course we want them to earn more money, but we cannot force the employer to okay, you have to pay this much and he can’t afford it, so then eventually he will have to lay off certain people, so we have to do it in a very planned way,” he added.

The PSAC was established to boost synergies between the private and public sectors. It also recommends policy development to the government, and reports regular feedback to the President.

Concepcion’s remarks come as the Senate on Monday approved on third reading Senate Bill 2534 or “An Act Providing for a 100 Pesos Daily Minimum Wage Increase for Employees and Workers in the Private Sector.”

Concepcion said that while large corporations could afford to increase wages by P100, the small and medium-sized companies, which make up most of the businesses in the country, will not be able to do so.

“To some extent, I also sympathize to our senators. We really want a better life for our people and ultimately, that’s our goal, we want to see a better life,” he said.

“As wages do increase, of course consumption will increase as well, and that will help the economy, but what we should do is not implement P100 (increase), you know, at one go and let’s try to spread that over a period (of time),” he added.

In the same interview, Concepcion said the focus should instead be placed on upskilling and reskilling workers for them to move up the corporate ladder and attain higher wages.

A number of parties have already expressed opposition over the proposed wage hike, including the Foundation for Economic Freedom Inc. (FEF) which said this would “turbocharge” inflation.

Inflation clocked in at 2.8% in January, slower than the 8.7% print in January 2023, and the slowest since October 2020’s 2.3%. The BSP expects it to average 6.0% this year, still above the 2.0% to 4.0% target range.

The Employers Confederation of the Philippines (ECOP) last week also sounded the alarm over the proposal, as it said it would be a “catastrophe” and would compel companies to increase the cost of their products or reduce manpower.

For its part, the Regional Tripartite Wages and Productivity Boards issued orders for increases in the minimum wages of employees in Northern Mindanao, the Zamboanga Peninsula, Cagayan Valley, Central Mindanao, and Central Visayas, among others.—AOL, GMA Integrated News