{"id":18540,"date":"2024-05-01T03:10:10","date_gmt":"2024-05-01T03:10:10","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/philippine-firms-tackle-wage-hike-conundrum\/"},"modified":"2024-05-01T03:10:10","modified_gmt":"2024-05-01T03:10:10","slug":"philippine-firms-tackle-wage-hike-conundrum","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/philippine-firms-tackle-wage-hike-conundrum\/","title":{"rendered":"Philippine firms tackle wage hike conundrum"},"content":{"rendered":"
\n

By Kyle Aristophere T. Atienza, <\/b><\/span>Reporter <\/i>and <\/i><\/span>Chloe Mari A. Hufana<\/b><\/p>\n

ALEXANDER V. SUYAT, 36, <\/span>trained to become a security guard in 2016 after years of working as a janitor, thinks he could earn more\u00a0 <\/span>to support his wife and two kids.<\/p>\n

He earns P610 ($10.59) for an eight-hour work shift \u2014 the minimum wage in the Philippine capital \u2014 and he has high hopes that the P150 legislated wage increase proposed in Congress would soon become a law.<\/p>\n

\u201cMy salary goes to many things \u2014 food and school for my children,\u201d he told BusinessWorld<\/i> in Filipino while on a break. \u201cMany say P150 is too small, but I\u2019ll take it because it\u2019s better than nothing.\u201d<\/p>\n

Mr. Suyat\u2019s wife works as a saleslady in a nearby mall, and their income, which they try to increase by working overtime, is just enough for the family to get by. \u201cPrices are so high now, it\u2019s so hard to save even if you have a stable job.\u201d<\/p>\n

As the couple\u2019s income lags, the cost of living keeps rising. Philippine inflation quickened for a second straight month in March as rice prices continued to surge. Inflation accelerated to 3.7% from 3.4% in February, according to the local statistics agency.<\/p>\n

\"\"The economy expanded by 5.5% last year and is expected to grow by 6-7% this year, still among the fastest in the region.<\/p>\n

Despite that strong growth, wages have remained flat, and workers are pressing the government of President Ferdinand R. Marcos, Jr. to increase wages nationwide in the face of spiraling prices.<\/p>\n

Daily minimum wages in the Philippines, which vary per region, averaged P354.32 from 1989 until 2024, reaching an all-time high of P610 in Metro Manila last year and a record low of P89 35 years ago, according to Trading Economics, citing Labor department data.<\/p>\n

The minimum wage in the southern Philippine region of Bangsamoro \u2014 the poorest in the country \u2014 ranged from P316 to P361.<\/span><\/p>\n

\u201cA P150 increase is welcome and gives some relief to workers and their families, but it doesn\u2019t even restore wages to their level after the last legislated wage hike in 1989,\u201d Jose Enrique \u201cSonny\u201d A. Africa, executive director at think tank IBON Foundation, said in a Viber message.<\/p>\n

\u201cThe P370-plus wage hikes since 1989 haven\u2019t been enough to keep up with inf<\/span>lation and the real value of the minimum wage in all regions is worth less now than 35 years ago,\u201d he added.<\/p>\n

The country\u2019s largest labor organization said the El Ni\u00f1o weather event and climate change \u201cjustify a wage increase, particularly in sectors most vulnerable to these changes.\u201d\u00a0<\/span><\/p>\n

\u201cWorkers in agriculture, construction and other outdoor industries face increased health risks and disruptions to their work due to extreme weather conditions,\u201d Federation of Free Workers Chairman Jose Sonny G. Matula said in a Viber message.\u00a0<\/span><\/p>\n

The Philippines adjusts salaries through its wage boards, but slow and meager increases against the backdrop of rising costs of living have prompted lawmakers under the Marcos administration to legislate wage increases.<\/p>\n

At the House of Representatives, separate bills that seek to increase wages of private sector workers by P150 to P750 have been f<\/span>iled, as well as another that mandates a P33,000-a-month entry wage for government employees.<\/p>\n

Senators, meanwhile, have approved a bill increasing the daily minimum wage in the private sector by P100 on second reading.<\/p>\n

Government economic managers have warned of the consequences of legislating wage increases. National Economic and Development Authority Secretary Arsenio M. Balisacan last month said the Senate bill could cut economic output by 0.5 percentage point, stoke inf<\/span>lation and worsen joblessness.<\/p>\n

The Philippine Chamber of Commerce and Industry (PCCI), the country\u2019s largest business group, said the legislated wage hike would make it harder for companies to recover from the coronavirus pandemic and reverse business conf<\/span>idence.<\/p>\n

\u201cThere were already positive signs from businesses, and confidence was gradually increasing after the pandemic,\u201d PCCI Chairman George T. Barcelon said by telephone. He added that geopolitical tensions, persistently high in<\/span>f<\/span>lation and the peso\u2019s depreciation have dampened that optimism.<\/span><\/p>\n

\u2018BARELY A DENT\u2019
\n<\/b>Mr. Barcelon said lawmakers should take into account an impending energy crisis in the whole wage hike debate as the country\u2019s sole indigenous source of natural gas gets depleted by 2027.<\/p>\n

\u201cWe suggest that the discussion on wage hikes be left to the Regional Tripartite Wages and Productivity Boards so that all stakeholders are represented to be able to balance the needs of workers, the capability of enterprises and varying conditions across industries and regions,\u201d Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines, Inc. said in a Viber message.<\/p>\n

British Chamber of Commerce Executive Director and Trustee Christopher James Nelson noted that while they understand workers\u2019 predicament, in the end, inf<\/span>lation from wage hikes could bite them.<\/p>\n

\u201cWe understand the concerns workers have, but inflation is a macroeconomic issue,\u201d he said in a phone interview. \u201cA wage hike in itself will have an inf<\/span>lationary impact, which will, again, impact workers.\u201d<\/p>\n

Mr. Nelson said persistently high inf<\/span>lation also keeps the Philippine central bank from cutting its benchmark interest rates, effectively increasing companies\u2019 borrowing costs.<\/p>\n

\u201cWage hikes won\u2019t be inflationary if businesses aren\u2019t so rigid about the profits they insist on making,\u201d Mr. Africa said. \u201cThere are many factors causing inflation like the recent supply chain disruptions, commodity price fluctuations, currency depreciation and other external shocks. Undue alarmism about wage hikes is really just placing the burden of corporate profit-making on workers.\u201d<\/p>\n

A legislated wage hike would barely make a dent on corporate profits since salaries account for only as much as 11% of their expenses, Mr. Africa said, citing IBON\u2019s study of a recent state-led annual survey of 38,000 companies of all sizes in all sectors.<\/p>\n

\u201cA P100 across-the-board wage hike is just 7.1% of profits on average across all firm sizes and 7.5% for micro, small and medium enterprises (MSME), while a P150 increase is just 11% across all firms and 11.3% for MSMEs,\u201d he said.<\/span><\/p>\n

\u201cEven a P690 increase to raise the average wage to the current P1,207 family living wage is equivalent to just 49% of prof<\/span>its across all companies,\u201d he added.<\/p>\n

Economic managers and the business community have warned that a legislated wage hike would mainly af<\/span>fect MSMEs, which account for more than 99% of businesses in the country.<\/p>\n

Mr. Africa and Mr. Matula said significantly increasing workers\u2019 wages would boost their spending power, spurring economic activity and benef<\/span>iting small businesses.<\/p>\n

\u201cWage hikes are an opportunity for economic growth rather than a challenge,\u201d Mr. Matula said. \u201cThey mean enhanced purchasing power for workers, who are also consumers. This is likely to benefit businesses, especially MSMEs.\u201d<\/p>\n

He said a P100 wage hike, representing a 16% raise based on Metro Manila\u2019s minimum wage now, is not only manageable but also crucial to economic growth. \u201cThe P150 wage proposal represents 24.59% of the current P610 daily minimum wage in the National Capital Region, signif<\/span>icantly lower than the 39.1% increase seen in 1989.\u201d<\/p>\n

Jenet I. Dacumos, a single mom of three who works as a janitress in a mall in Manila, is pessimistic about a legislated wage increase.<\/p>\n

\u201cI feel our President doesn\u2019t empathize with the poor, so I don\u2019t expect it to happen,\u201d she told BusinessWorld<\/i> while resting during her shift. \u201cFood prices are driving me crazy. How can they expect us to live on P610 daily? I need another racket.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

ALEXANDER V. SUYAT, 36, trained to become a security guard in 2016 after years of working as a janitor, thinks he could earn more\u00a0 to support his wife and two kids.<\/div>\n","protected":false},"author":1,"featured_media":18541,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[14644,15803,7348,1844,185,5339,3546],"class_list":["post-18540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-bworldonline","tag-conundrum","tag-firms","tag-hike","tag-philippine","tag-tackle","tag-wage"],"yoast_head":"\nPhilippine firms tackle wage hike conundrum - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/philippine-firms-tackle-wage-hike-conundrum\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Philippine firms tackle wage hike conundrum - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"ALEXANDER V. 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