BUSINESS groups in the country are reiterating their strong opposition to the proposed legislated wage hike of P100, which the Senate approved on second reading on Wednesday, Feb. 14, 2024.
In a joint position paper addressed to the senators through Senate President Juan Miguel Zubiri on Thursday, Feb. 15, the groups urged policymakers, particularly members of the Senate, to adopt a “more comprehensive approach to addressing economic inequality instead of focusing solely on wage increases.”
This includes investing more in education, skills development and infrastructure, as well as creating an enabling environment for business growth and job creation.
The group also called for passing legislation to once and for all solve low productivity, poor governance, excessive regulations, worsening poverty and serious income inequality which characterize a country with a large informal sector.
“Another wage hike through legislation coming [on] the heels of the recently implemented minimum wage adjustments through the wage boards is not the appropriate solution to address the underlying challenges faced by our Filipino workers,” they said.
The groups noted that 15 of the 16 of these regional boards have just granted another round of increase in minimum wages for the very same people that this proposed P100 legislated minimum wage increase aims to assist.
The Senate passed on second reading Senate Bill 2534, or the proposed Wage Increase Act of 2023. The measure seeks to improve the living conditions of Filipino families, according to Zubiri.
Zubiri expects the bill to be approved on the third and final reading next week.
“Legislated wages, while hurting especially the micro, small and medium enterprises, will worsen the plight of the informal sector and its overwhelming 47 million strong presence in the workforce and contribution to the economy,” the business groups said.
They noted that only the five million minimum wage earners will benefit from any legislated wage hike.
The informal sector consists of agricultural workers with no employers, fisherfolks, unpaid family workers, home-based workers, ambulant vendors and street hawkers, jeepney/tricycle and pedicab drivers, temporary construction workers, small-scale miners and quarry workers, as well as tour guides, “on-call” entertainment workers, and hairdressers, waste pickers and recyclers, barangay health workers, domestic cleaners, and food delivery riders and other gig workers “do not stand to benefit whatsoever from any legislated wage increase in the form as it is being discussed right now.”
“Their pockets will be hurt more by the higher inflation rate resulting from the proposed legislated minimum wage increase as unanimously confirmed by the country’s economic and financial managers,” the group said.
The groups stressed that the sudden imposition of a significant national wage hike would place an unprecedented burden on businesses, particularly on the micro and small-sized enterprises consisting of at least 95 percent of enterprises, many of which are still reeling from the aftermath of the Covid-19 pandemic.
“Its implementation without careful consideration of the consequent economic impact would do more harm than good to both businesses and employees,” it added.
The signatories of the joint position paper include the heads of the Employers Confederation of the Philippines, Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Management Association of the Philippines, Federation of Filipino Chinese Chambers of Commerce and Industry, Philippine Association of Legitimate Service Contractors Inc., IT & Business Process Association of the Philippines, Semiconductor and Electronics Industries in the Philippines Inc., Philippine Retailers Association, Philippine Food Processors and Exporters Organization Inc. and Philippine Constructors Association Inc.