Friday, August 17, 2007 Employers say P12 pay hike translates to P19 with Cola integration
THE Employers Confederation of the Philippines (Ecop) has called on labor leaders to accept the P12 pay hike saying the new minimum wage of P362 "actually translates to a P19 a day adjustment" with the inclusion of the cost-of-living allowance (Cola) in the basic salary.
Ecop acting president Aniano Bagabaldo made the appeal following the granting of P12 increase to minimum wage earners by the wage board.
"We feel that this wage increase is a happy balance between the needs of the workers and the affordability of the employers in the light of present economic conditions and difficulties being experienced by the employers, especially the MSMEs (micro, small and medium enterprises)," he said.
Bagabaldo said the workers should understand that the integration of the P50 Cola in the previous minimum wage of P350 plus the newly-approved P12 increase could now provide more benefits to them.
"The net effect of the integration of the Cola is, it will now be considered in the computation of benefits like the 13th month pay, overtime pay, night differential pay and other benefits that companies give to their employees," he said.
Giving high wages could trigger more massive job losses and unemployment, Bagabaldo explained, adding that more SMEs would be forced to close or "go underground" to avoid paying the right taxes and the mandated minimum wages, thus increasing the country's unemployment rate.
"We don't want that to happen. We are really for job creation and job preservation," he said.
Wage increase that is not productivity-based will be "inflationary", he added. "In other words, it will be more costly for a manufacturing company to produce products at a higher cost. What will happen is they will only pass on the additional cost to the consumers. At the end of the day, it's the consumers who will suffer."
One of the major factors for the continued decline of Philippine competitiveness is overall low productivity.
Despite low productivity, the previous daily minimum wage of P350 is already the highest entry for unskilled workers among developing countries in Asia, higher than Vietnam, Cambodia, China, Indonesia and Thailand.
Data from the National Wages and Productivity Commission, based on the equivalent U.S. dollar currency, showed that the minimum wage in Vietnam is US$1.26; Cambodia is US$1.42; Indonesia/Jakarta is US$1.85 to US$3.30; China/Beijing is US$1.94 to US$3.36; Thailand/Bangkok is US$4.37 to US$5.84; while the Philippines/Metro Manila is US$2.40 to US$7.29.
The granting of the P12 increase would bring the new minimum wage in the country to US$7.54. (Danielle Venz/Philexport News and Features/Sunnex)
