Friday, January 19, 2007 MEZ firms hurt by wage hike law, costly power
FIRMS at the Mactan Economic Zone (MEZ) are as concerned about the rising value of the peso against the dollar, but the possibility of a legislated wage increase and the high cost of electricity are “more pressing” problems.
Still, Mactan Export Processing Zone Chamber of Exporters and Manufacturers (Mepzcem) secretary and board member Porferio Montesclaros Jr. said a continued appreciation of the peso against the dollar may cause existing multinational companies at MEZ to shift production capacities to other countries, such as China, where production costs are lower.
“Like the exporters outside of MEZ, we are also suffering. But some MEZ companies are multinational companies so they have more resources to absorb the losses,” he told Sun.Star Cebu.
High electricity rates and the possibility of a legislated wage increase, which is pending approval at the Senate, could hurt the companies more.
“Laborers may favor this (legislated wage hike) but there is a limit to what companies can do,” Montesclaros said.
By a vote of 151 to none, the House of Representatives approved last Dec. 20, the two-year-old House Bill 345, which seeks the implementation of a P125 across-the-board wage increase, which will be spread over three years.
SMEs
In a separate interview, Mandaue Chamber of Commerce and Industry (MCCI) president Eric Mendoza said MCCI is against a legislated wage increase as this will “kill” the small and medium enterprises.
Montesclaros said any mandatory wage increase will only end up getting passed on to consumers, through higher prices of basic commodities.
While he has not heard of any MEZ company closing down or retrenching employees following the approval of House Bill 345, Montesclaros said he fears it is a “big possibility.”
“In general, some companies may be tempted to file for bankruptcy, an exemption, or worse pay below the minimum wage,” Montesclaros said.
He said that apart from lobbying with the National Government, the industry sector is also pushing to improve the productivity of workers.
Confederation of Philippine Exporters (Cebu) Inc. president Allan Suarez Jr. earlier said the peso’s appreciation, which has made Philippine products more expensive abroad, is a “disastrous” scenario for exporters. (MMM)
