Sunday, June 25, 2006

P75 Wage Hike for West Visayan Workers?

Businessmen and employers are breathing a collective sigh of relief after the P125 Wage Hike bill was deferred in the House of Representatives. The bill, which was authored by Representatives Edcel Lagman, Renato Magtubo and Crispin Beltran, sent shock waves throughout the business community. It was loudly opposed by the Makati Business Club and the Philippine Chamber of Commerce and Industry (PCCI), Malacañang and NEDA.

Although the bill seeks to implement the P125 across-the-board increase in three tranches (P45 in October this year, P40 in 2007, and P40 in 2008), various business groups and government officials claimed that it will lead to massive lay-offs and runaway inflation. NEDA Chief Romulo Neri estimated that even just a P45 across-the-board increase alone would result in the displacement of between 288,000 and 620,000 workers. He added that between 225,000 and 424,000 more could potentially be laid off in 2007, and between 210,000 and 365,000 could lose their jobs in 2008. Guillermo Luz of the Makati Business Club also criticized the congressmen for railroading the bill and Donald Dee of PCCI threatened to withdraw their support of Cha Cha should the bill be enacted into law.

Although the bill may never pass third reading (considering its "powerful" oppositors), the P125 Wage Hike bill has succeeded in focusing attention to the plight of our minimum-wage workers who are finding it harder and harder to meet their basic needs on their current salary levels. Before the wage hike issue broke out in media, majority of business owners and employers were not really focused on granting salary increases for their employees. So in an effort to preempt its enactment, Regional Wage Boards all across the country are now fast-tracking approval of wage hike petitions in their respective regions.

Presently, the daily minimum wage in Western Visayas range from P160 (for agricultural workers) to P205 (for non-agricultural / industrial-commercial workers). Roughly, this translates to a monthly gross salary of P4,000 to P5,000. Exactly one year ago, the Tri-Partite Wage Board for Region 6 granted a P15 increase for selected sectors. It is currently deliberating a petition filed by labor groups in the region for a P75-wage hike. DOLE-Region 6 officials promised to fast-track their deliberation of the said petition, in consideration of the soaring prices of fuel and basic commodities. Roughly computed, a P75 wage hike will translate to a P2,000 increase in the monthly salaries of minimum-wage workers across Western Visayas. The question is, can our local businessmen afford to give such a raise?

Different industries will have different reactions to a wage hike. The sugar industry, agriculture and aquaculture sector, which employs a considerable percentage of Ilonggos in the region, may be adversely affected by a drastic P75 increase. The region’s manufacturing sector might also be forced to lay-off workers to comply with a P75 mandatory wage hike. But on the other hand, the booming commercial and BPO (Business Process Outsourcing) industries could very well afford to pay their employees more. In fact, call centers are already paying above-minimum-wage rates. Likewise, cellular phone companies, shopping malls and tourism-related businesses like beach resorts and spas can likewise afford to raise their employees’ salaries considering the brisk sales that they are currently experiencing.

The long-term solution to this problem of low wages ultimately lies with our people. Filipinos must upgrade their skills and increase their productivity in order to increase their household incomes. In this age of information technology where knowledge is power, we must familiarize ourselves with the latest technologies and harness it to enhance our competitiveness vis-à-vis our competitors. We must also polish our English skills because this our competitive edge from our more prosperous Asian neighbors. In fact, the call center sector in the Philippines would have grown faster if not for the lack of qualified English-speakers here. Lastly, we must not rely totally on foreign investments to generate employment but must also promote entrepreneurship since the more businesses we create locally, the more jobs we generate.

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