THE Cebu furniture industry yesterday opposed the proposal for a P128 across-the-board wage increase in Central Visayas.
In a position paper submitted to the Regional Tripartite Wages and Productivity Board (RTWPB), the Cebu Furniture Industries Foundation Inc. (CFIF) said any increase at this time would only cause more job losses and be “tantamount to a death certificate for the export furniture industry.”
CFIF president Angela Paulin said the major markets of Philippine export furniture remained “very weak” amid the global financial crisis and that stiff competition from China, Vietnam and Indonesia presented additional challenges.
CFIF, whose membership includes about 80 percent of the furniture manufacturers and exporters in Cebu and some companies in Negros Island, had already seen its
membership plummet to 118, from 180 members in 2007, due to company closures, Paulin said in the paper presented to the regional wage board during a consultation with the furniture industry to get inputs on the proposed wage hike.
With their finances “at an utimate low,” Paulin said those furniture firms that have continued to operate have had to right-size or reduce work- hours just to survive.
Emphasizing that no one had been exempted, she said: “The crisis has crippled even the top 50 furniture exporters in Cebu. Overall, export furniture shipments from Cebu fell about 70 percent from 2007 to 2009, according to Bureau of Customs data.”
For 2009 alone, the shipment volume of the top 50 furniture exporters in Cebu plunged to 4,500 containers, or 46 percent less than the 8,500 containers in 2008, she said.
According to reports, the Cebu Labor Coalition had last year filed a petition for a P128.60 across-the-board wage increase with the RTWPB, saying the increase was necessary because of insufficient wage increases in the past, increases in the prices of oil and basic commodities, and the reduced purchasing power of the peso. The current minimum daily wage is P267.
Hit hardest
But CFIF said that when total exports in Central Visayas fell 37 percent last year, the furniture sector had been hit the hardest. The sector’s share in the total exports had continued its decline to 1.41 percent in 2009, from 7.50 percent in 2008 and 8.55 percent in 2007, the group said.
The group also opposed the wage hike petition on the ground that while punishing furniture firms that are already suffering, an across-the-board increase would only provide incentives to employees who do not deserve a raise.
“If there has to be an increase in wages, it should be postponed until market recovery is certain,” the position paper said. “Individual companies should be allowed the discretion to decide when they can afford to increase the wages of their workers and, if so, how much.”