ECOP says tax breaks, job creation, cash aid better than minimum wage hike

Weeks after the announcement of possible wage hikes next year, the Employers Confederation of the Philippines (ECOP) said on Friday the government should focus instead on tax breaks and job creation rather than raising the minimum wage.

“The government should find non-wage measures that will apply to everyone rather than addressing it with measures that will help a few at the expense of others,” ECOP president Sergio Ortiz-Luis Jr. told the Inquirer in an interview.

“Among others, these can be tax breaks, ayuda, job creation,” Ortiz-Luis said when asked what these measures are.

Earlier on Nov. 8, the Department of Labor and Employment (DOLE) ordered the regional wage boards to review whether another round of increase for minimum wage earners could be imposed next year to cushion the impact of soaring prices of goods on consumers.

Previously, the ECOP official said only about 10 percent of the total number of workers in the Philippines are minimum wage earners, indicating that the remaining 90 percent will not receive relief from the wage hike.

Rising prices of goods

The Department of Trade and Industry (DTI) said on Thursday they were studying price increase requests from local manufacturers, citing appeals for upward price adjustments for canned goods, milk, bread, instant noodles, laundry soap, salt, soy sauce and toilet soap, and candles.

The trade department said they will issue a new suggested retail prices (SRP) bulletin by January to reflect price increases deemed necessary. Manufacturers seek price adjustments due to increases in the costs of raw materials, packaging and logistics, among others.

According to the Philippine Statistics Authority (PSA), 47.58 million Filipinos were employed as of September 2022, which meant about 4.8 million were minimum wage earners while the remaining 42.8 million were above the threshold.

MSMEs to feel brunt

Ortiz-Luis also said about 90 percent of micro, small and medium enterprises (MSEMs) are micro -businesses employing less than 10 workers  and are ill-equipped to absorb costs associated with a wage hike.

MSMEs also make up about 99 percent of businesses in the country, serving as the backbone of the Philippine economy,

Go Negosyo founder Joey Concepcion -a known advocate for MSMEs- has expressed a tempered view of salary hikes, suggesting that a mandatory minimum wage increase be given only to employees of micro and small enterprises.

Concepcion reasoned that employees of medium-scale companies can be grouped with large companies, many of which have collective bargaining agreements with their workers.