Biz groups: Wage hike plan to send 42M begging for ‘ayuda’

MANILA  -Four more local business groups have asked the Senate to scrap a bill that grants workers an across-the-board P150 wage hike, warning the move could lead to price increases, job losses and eventual shutdown of small enterprises.

In a joint statement released on Friday, the Federation of Filipino-Chinese Chamber of Commerce and Industry Inc., IT & Business Process Association of the Philippines, Philippine Hotel Owners Association and United Port Users Confederation of the Philippines added their voice to the campaign calling for lawmakers to leave the matter of wage hikes to the regional tripartite wage boards.

The Employers Confederation of the Philippines, the Philippine Exporters Confederation Inc., and the Foreign Buyers Association of the Philippine, three trade associations which have earlier expressed the same position, were also part of the new joint statement.

“Because of the regularity, mechanism and coverage in terms of consultations, the regional tripartite wage board’s mandate in this area becomes even stronger and credible,” the groups said.

“For this reason, the business community feels more comfortable that they (wage boards) continue playing this role backed up by years of relevant and on-the-ground information,” they added.

The business groups also advised senators pushing for the wage hike to include the government’s economic cluster in the discussions to help determine if the planned measure would lead to the common good.

Additional costs

The trade groups said 98 percent of businesses in the country are micro, small and medium enterprises (MSMEs), most of which would have to absorb additional costs anew just years after suffering from the financial impact of the pandemic.

“If the proposal for increased wages is approved, these employers may have to further increase the prices of their products, reduce the number of their workers, or simply close down,” read the joint statement.

They also argued that such a move would only benefit around 16 percent, or about 8 million individuals, in the formal sector.

The majority—or the remaining 84 percent or 42 million individuals in the informal sector, which includes farmers, fishers, market vendors, jeepney drivers, tricycle drivers, and home-based small entrepreneurs—would be at a disadvantage once price increases begin, the groups said.

“These are the people who will then start trooping to government offices to ask for additional ayuda  (aid) when this burden becomes unbearable,” the businessmen added.

Despite their apprehensions, the trade associations welcomed the creation of a technical working group at the Senate, where they expect further dialogues about the matter. The Senate labor committee has approved the bill in principle when it sent deliberations over to a technical working group.

RELATED STORIES:

https://business.inquirer.net/401365/legislated-wage-hike-bucked

Senate panel approves ‘in principle’ P150 private sector wage hike

https://business.inquirer.net/400667/business-groups-bargain-for-terms-in-proposed-p150-wage-hike