'Supervening event' that may lead to wage hike declared

CEBU CITY -- The Regional Tripartite Wages and Productivity Board (RTWPB) in a regular meeting on Thursday declared a supervening event that will pave the way for another round of wage increase in the first week of October this year.

Lawyer Ernesto Carreon, Associated Labor Union (ALU) representative, said he moved for the declaration of a supervening event because the inflation rate increased to 6.1 percent.

The development dismayed the business community, whose leaders pointed out that increasing minimum wage would hurt micro and small enterprises more and cause job losses.

Alliance of Progressive Labor representative Jose Tomungha supported Carreon in the voting while management representative, lawyer Hidelito Pascual, and Director Buenaventura Gosuico of the National Economic and Development Authority (Neda) voted against.

Department of Labor and Employment Central Visayas Director Gloria Tango, who presided over the meeting in concurrent capacity, broke the tie in favor of the labor sector.

Carreon said he based his motion on the inflation data from the National Statistics Office (NSO).

Inflation

The NSO website said the Philippine inflation rate in July was 3.2 percent, higher than the 2.8 percent in June but below January’s 4.0 percent.

The NSO also revealed that the inflation rate in areas outside of the National Capital Region was also 3.2 percent.

“The trending of the inflation rates show increases. When I left for the United States last month, the inflation rate was three percent. I did not push for the declaration of supervening event when the inflation rate then because the board might junk it. But now that the inflation rate is 6.1 percent, it’s now time to declare a supervening event,” Carreon said.

The NSO, however, said the country’s month-on-month inflation “decelerated to 0.3 percent in July from 0.5 percent in June.”

The NSO noted price increases in food items like rice, meat, fish, vegetables and sugar. “However, this was tempered by the downward price adjustments in cooking oil, selected condiments and seasonings, gasoline and diesel,” it said.

Productivity

The July inflation rate is within the Bangko Sentral ng Pilipinas forecast of three to five percent for this year.

Cebu Business Club president Gordon Alan Joseph said productivity has to be improved before any wage increases.

“We can't afford to have high labor and low productivity,” he said.

He said he is worried that Cebu will become less attractive to investors due to high labor costs.

Besides, he said, increasing wages is not the solution to poverty but creating more jobs will feed more people.

Mandaue Chamber of Commerce and Industry (MCCI) president Philip Tan said any wage increase will hurt micro and small enterprises.

He said micro and small-scale enterprises make up 90 percent of businesses and if they close shop because they can no longer afford the wages of their workers, many will lose jobs.

He said, though, that the RTWPB still has to go through a process of deliberation and consider the best options for all parties concerned.

Big firms

This was echoed by Cebu Chamber of Commerce and Industry president Prudencio Gesta.

Gesta said big companies will not be affected by the wage increase because they are paying above the mandated wage standard anyway.

Filipino-Cebuano Business Club Inc. president Rey Calooy said his group hopes the wage board’s decision will be beneficial for both labor and management.

He said his group supports productivity-based salary increase to balance consumption and production, instead of an across-the-board increase on the minimum wage standard.

Carreon said aside from rising inflation, the peso’s diminishing buying is another reason to increase wages.

Director Asteria Caberte of the Department Trade and Industry (DTI) Central Visayas and businessman Charles Streegan, a management representative, were absent during the meeting. Caberte is RTWPB Central Visayas vice chairperson.

Carreon said the result of the voting will be submitted to the National Wages and Productivity Council (NWPC) for confirmation. Once confirmed, the petition for wage increase together with the notice of hearing will be published in a newspaper of general circulation.

Carreon said the labor sector hopes that the NWPC has approved the results of the voting before the RTWPB’s next meeting on August 23. (EOB/MEA/KOC of Sun.Star Cebu)