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Wednesday, December 28, 2005
Business leader warns against pay hike in ‘06
The year 2006 is not a good year to ask for increases in wages and other employee benefits, according to Cebu’s business community.
In an interview, Cebu Chamber of Commerce and Industry (CCCI) president Robert Go said increasing business costs due to the increasing price of oil in the world market, among others, are already negatively affecting companies.
“If we will increase wages and other employee benefits without increasing our productivity, it’s just like stabbing and killing ourselves because many companies would soon fold up, leaving many people jobless,” he told Sun.Star Cebu.
Earlier, Philippine Chamber of Commerce and Industry Visayas governor Jose Ng said the increase in wages must be well calculated, as this is one of the factors that discourage investors from doing business in the country.
Survival
In a separate interview, regular employee Arnel Abalayan said, though, that employees really need a raise with the increasing prices of goods due to the implementation of the reformed value-added tax (RVAT).
“Unsaon man namo pagkabuhi niini kon ang among sweldo, mao ra, unya ang palaliton, lakip na plite, nagkaanam ug kataas?” he said. (How can we survive with the increasing prices of goods, including jeepney fare, if our wage is just the same.)
Abalayan said most regular employees rely solely on their wages for survival.
Buying power
Meanwhile, Go said the purchasing power of consumers has declined, as manifested by the flat performance in terms of peso value of the food retail sector despite the slight drop in volume.
“Food retail experienced a slight drop this year in volume but value remains because of price increases this year. There is a much lower peso value purchase per person, (indicating) a clear economic slowdown on the purchasing power of consumers,” he said.
While he acknowledged that the RVAT has raised the prices of goods and services, Go said the tax measure will benefit the people in the long run because it has encouraged investors, particularly in the mining sector, to push through with their investment plans in the country and thus provide more jobs.
Optimistic
He said the implementation of the RVAT is one of the reasons the CCCI is optimistic that the country’s economy will recover next year.
In fact, the recovery has started this month with the strengthening of the peso to the dollar due to the dollar remittances of overseas Filipino workers.
Aside from retail, Go said the real-estate sector was also affected by the economic crisis this year.
But he said tourism and the service industries, like information and communications technology sectors, were not badly hit. (JBN)
(December 28, 2005 issue)
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