MANILA -- Wage increase is 'not timely' because of the country's fragile economy, low inflation, and fears of worsening employment, said the government and some noted economists Saturday.
Various groups, including the Trade Union Congress of the Philippines (TUCP), recently filed wage hike petitions before the National Wages and Productivity Commission (NWPC).
But Socio-economic planning Secretary Augusto Santos said Saturday that the country nearly slipped into recession after its economy posted a weak 0.9 percent expansion last year, while consumer prices registered 4.4 percent in March.
"We are still recovering from economic slowdown and inflation is low," Santos said.
He said the latest inflation rate was largely attributed to price increases in fuel, light, water, transportation and communication.
Worsen unemployment
University of the Philippines (UP) economics professor Benjamin Diokno, meanwhile, said increasing salaries could only worsen unemployment as most industries are still reeling from the effects of global economic downturn.
"Given the serious unemployment and underemployment, it is really hard to justify any salary increase, except for jobs in well performing industries. With the economy still weak, workers should be happy with just having a job. Raising wages may only worsen unemployment," Diokno said.
Last March 16, the government reported that unemployment stood at 2.8 million in January this year, while underemployed workers rose to 7.1 million from 6.2 million in January 2009.
Long overdue
A militant think-thank group, however, immediately refuted the government’s concession, saying a wage hike is "long overdue."
"Government granting a meaningful wage hike will send signal that it is concerned about wage earners and also concretely benefit them. Nominal minimum wages are less than half family living wages as it is, even assuming that workers actually even receive these," Ibon Research Head Sonny Africa said.
"A wage hike is long even overdue and partly corrects how workers have borne the burden of adjusting to the economic crisis, disproportionately sparing employers," he added.
But more than wage increases, Africa said the government should provide "economic relief" to people who are not salaried employees.
He said the government should focus on improving the farming sector, giving higher subsidies for health care and emergency jobs program, among others.
For University of Asia and the Pacific (UA&P) professor Cid Terrosa, the wage hike is helpful to tame the effects of "escalating prices" but warned of a higher inflation if implemented.
"The wage hike could mitigate the effects of escalating prices to a certain extent but it could fuel higher inflation in the long-run. Hence the wage hike should be calibrated in a way that won’t trigger higher inflation," he said in a text message.
Tame El Niño effects
As this developed, a militant workers group has pressed the Arroyo administration to grant a "substantial" wage increase in order to mitigate the effects brought by the El Niño phenomenon.
In a statement, Kilusang Mayo Uno (KMU) Chairman Elmer Labog said President Gloria Macapagal-Arroyo failed to rally behind the workers after more than nine years in power.
"Since 2001, Gloria Arroyo has just sat on the persistent call of workers for a P125-legislated nationwide wage hike up to this point wherein the combined effects of El Niño and new rounds of price hikes make survival very difficult for Filipino families," he said.
Labog said the prolonged dry spell jacked up the prices of consumer goods, fuel, and electricity, justifying the much-needed wage adjustment.
The KMU stated that minimum wage levels in all regions remained at 2008 levels and prevailing wages in five regions are actually below the fixed minimum wage.
Labog, however, failed to identify the five regions.
"It has been established that prices far outpace any increase in wages. But with stagnant wages vis-à-vis skyrocketing prices on a nationwide scope, workers are facing worse situation, perhaps near-death hunger," he said. (Virgil Lopez/Sunnex)