‘Wage hike to dampen investment promo efforts’

(MALAYA) A wage increase is a sure threat against efforts to invite more investors, according to business groups.

In a May 17, 2023  letter to Sen. Jinggoy Estrada, heads of the  Philippine Chamber of Commerce and Industry, Federation of Filipino- Chinese Chambers of Commerce and Industry, Employers Confederation of the Philippines,  IT & Business Process Association
of the Philippines, Philippine Exporters Confederation Inc., Philippine Hotel Owners Association, Foreign Buyers Association of the Philippines and United Portusers Confederation of the Philippines Inc. said the Philippines already has the highest minimum wage in Asean.  Ejercito is the chairman of the Senate Committee on Labor, Employment and Human Resources which is hearing various bills  raising  minimum wage in the private sector across all regions by P150.

The groups said prices of goods in the Philippines are higher compared with counterpart economies in Asean, which may be a direct effect of the higher minimum wages in our country.

“This proposal then becomes a sure threat against efforts to invite more investors when the CREATE (Corporate Recovery and Tax Incentives for Enterprises and other investment-related laws were passed,” they said in the letter.

The groups described the proposed increase a short-term relief to a “happy” few saying  only 6 percent or about 8 million in the formal sector out of the 50 million in total number of Filipino workers will  benefit from this proposal.

The groups welcome the creation of the technical working group where the informal sector and agencies in the economic cluster namely the Departments of Trade and Industry and Labor and Employment and the National Economic and Development Authority can  provide inputs on the discussions.

The groups  prefer to have wage increase proposals tackled by the tripartite wage board where issues are carefully reviewed and all affected sectors and relevant government agencies are represented.

At present, the National Capital Region has the highest daily nominal wage rate at P570 (non-agriculture) second to the highest in the region.

Data from the National Wage Productivity Commission as of August 2022 showed in dollar terms, that is about $10.14, next only to $11.16 in Malaysia. Irma Isip