ECOP urges House to carefully study probable impact of P100 wage hike

By Miguel Gil

February 23, 2024, 6:22 pm

<p>(<em>PNA file photo)</em></p>

(PNA file photo)

MANILA – The Employers’ Confederation of the Philippines (ECOP) on Friday appealed to the House of Representatives to be prudent when deliberating on its own version of the legislated wage hike bill.

In an interview, ECOP president Sergio Ortiz-Luis Jr. urged lawmakers to heed economic managers’ warnings on how arbitrary and uncalled for wage increases can trigger another round of spikes in inflation.

He cited a National Economic and Development Authority (NEDA) study that every five-percent increase in salaries causes a corresponding 1.2 percent increase in inflation.

“They (the Senate) approved a PHP100 per day across-the-board salary increase. That is well above 5 percent. I wonder how much that will impact inflation. It’s not just NEDA warning against it (legislated wage hike), even (Finance) Secretary (Ralph) Recto is not in favor of it,” he told the Philippine News Agency.

Ortiz-Luis also called on the Lower House to be more inclusive of the employers’ sector when deliberating upon wage issues, saying they were left out of the most crucial portion of the Senate’s recent wage hearings.

“In any case, wage hikes should not be decided by Congress. It is for that reason that Congress created the wage boards (Regional Tripartite Wages and Productivity Boards) in the first place. The employer, labor and government sectors in each region are represented in the wage boards… putting them in a better position to decide on those things,” he added.

Additionally, Ortiz-Luis said only a small portion of the country’s labor force stand to benefit from the PHP100 per day wage increase.

He is referring to the 16 percent of workers in the “formal sector” or those employed by corporations and other registered businesses.

Ortiz-Luis explained that the estimated 84 percent of workers belonging to the informal sector, such as farmers, fisherfolk, vendors, and jeepney and tricycle drivers, among other jobs, will not receive a pay hike but will contend with its inflationary fallout.

He said it is highly unlikely that the country’s thousands of micro and small-scale enterprises can afford to pay another PHP100 per employee daily, opening the possibility of business closures or employee reduction. (PNA)