Local businessmen said the Philippine economy has just started to recover from the global pandemic, and some business owners may not be able to afford the across-the-board daily minimum wage increase of P150 proposed by Senate President Juan Miguel Zubiri.
Some senators said the wage hike would improve worker productivity and provide long-term economic benefits.
Some business leaders, though, are skeptical about a legislated wage hike at this time.
Cebu Chamber of Commerce and Industry (CCCI) president Charles Kenneth Co told SunStar Cebu on Friday, May 12, 2023, that any wage increase should be discussed and decided by the RTWPB since every region has a unique economic situation.
For his part, Mandaue Chamber of Commerce and Industry (MCCI) president Kelie Ko said any mandatory salary adjustment, from an equitability perspective, posed a much heavier burden on businesses within a city or municipality that has only a few economic activities.
“While we recognize the need for salary adjustments in view of the current inflation, not all businesses in the country will be able to afford this increase across the board,” Ko explained.
He added that granting the P150 wage increase nationwide may result in “pricing the country out of the market in contrast to the Asian neighbors.”
Zubiri pushed for the increase at the Senate Committee on Labor, Employment and Human Resources on Wednesday, May 10, 2023, saying it’s time for the business sector to help back after benefitting from business-oriented measures such as the Create Act or the Corporate Recovery and Tax Incentives for Enterprises Act of 2021.
Both leaders of CCCI and MCCI believe that the Create Act has been beneficial for the business sector as this helped boost investments in the country due to tax incentives and income tax cuts.
“It may be too much to assume that whatever savings from the tax cuts should be plowed back to wage increases,” Ko said.
The law also helped increase revenue collection, according to Co.
“Create Act has increased the compliance of businesses paying their taxes as evidenced by the BIR (Bureau of Internal Revenue) hitting their collection target,” Co added.
In pushing for the wage increase, Zubiri argued that compared to its Southeast Asian neighbors, the Philippines is already behind in terms of wage value.
While the country’s inflation has started to slow down to 6.6 percent last April from 8.6 percent in January 2023, the prices of basic commodities have not gone down, the senator noted.
Last Feb. 28, National Economic and Development Authority Secretary Arsenio Balisacan said at the briefing of the Development Budget Coordination Committee for the House committee on appropriations that a wage hike through legislation will negatively impact the country’s economy.
Balisacan said this may result in the country’s exports becoming more expensive or less competitive in the international market, thus impacting economic activity.
To mitigate the high inflation rate, the government must gamble its resources in investing in the agriculture sector’s productivity, which likely caused the high inflation, Balisacan had said.
For Alyansa sa mga Mamumuo sa Sugbo-Kilusang Mayo Uno (AMA Sugbo-KMU) chairman Jaime Paglinawan, increasing the worker’s wage will spur economic activity and not cause inflation.
Paglinawan said a wage increase is necessary as the cost of basic commodities continues to increase.
Increasing the salary of workers, particularly those earning the minimum wage, will benefit the low-income families as they are likely to spend more for their daily consumption than save it, Paglinawan said.
With a wage increase, the families’ spending capacity also increases and bolsters economic activities in the local communities.
“We call for an increase to the minimum wage because this will spur economic activity. It will benefit the poor and slowly reduce the unequal economic conditions of the people,” Paglinawan said.
Citing the Ibon Foundation computation that a family of five in Central Visayas needs P1,227 in daily wage to meet their basic food and non-food needs, Paglinawan called on the Lower House to push for the same legislation.
While waiting for Senate action on the proposals, he also challenged the RTWPB-7 to reconsider the wage hike petitions filed recently by different labor groups in Central Visayas.
Dennis Derige of the Partido Manggagawa Cebu filed in April 2023 a petition for a P100 increase for minimum wage earners.