Proposed P125 wage hike a no-go

The proposed P125 across-the-board wage hike would not be seeing the light of day under the Duterte administration, the country’s chief economist said Wednesday.

Socioeconomic Secretary Ernesto M. Pernia told reporters that Labor Secretary Silvestre Bello III already agreed with the economic managers’ opposition to the proposal. They said the P125 legislated wage hike would kill small businesses.

“That’s not going to pass,” said Pernia, who is also the Director-General of state planning agency National Economic and Development Authority.

Pernia earlier said that an across-the-board, nationwide wage increase would not augur well with the varying economic conditions in different regions.

“The regions have different inflation and cost of living conditions so you cannot just enforce a uniform increase across all regions,” Pernia had said.

He also cited a recent study conducted by Neda, which showed a wage hike would result in massive job losses.

“It’s going to affect employment because with higher wages, many firms would not be able to afford to keep their workers or hire workers,” the Neda chief said.

“MSMEs will be hard up with an across-the-board wage increase,” he added, referring to micro, small and medium enterprises.

He added it would “worsen inequality across regions” since “it’s going to dampen investors from investing in the regions, especially those seeking lower minimum wages.”

The Employers Confederation of the Philippines (Ecop) also said the wage hike would be “disastrous” to businesses. “[Cost] of production of goods and services would rocket sky-high. Enterprises could not just simply pass on the increased cost of goods to the market primarily because of the competition offered by low-cost imports and smuggled goods.”