THE Regional Tripartite Wages and Productivity Board (RTWPB) 7 has defended its decision to implement new daily minimum wage rates, saying it cannot implement increases higher than P33-P43 as it needs to balance the needs of workers and employers while mitigating inflationary pressures.
Both labor and management representatives on the wage board expressed dissatisfaction with the increase.
Antonio Cuizon, representing the workers’ sector, described the increase as insufficient to offset the high prices of basic commodities. He also pointed out that the burden of the increase would fall primarily on micro, small and medium enterprises (MSMEs), as larger companies typically pay above minimum wage.
Cuizon called the increase as “sinsilyo” or loose change for ordinary workers. He spoke in a press conference called by the RTWPB 7 at Bai Hotel in Mandaue City on Tuesday, Sept. 17, 2024.
Opposing the wage hike, Dr. Philip Tan, representing the employers’ sector, argued that businesses are still facing challenges. Many of them are still recovering from the effects of the Covid-19 pandemic, typhoon Odette (Rai), the ongoing Ukraine-Russia war and high inflation, he said.
He said the wage hike could lead to layoffs or business closures, particularly for micro, small, and medium enterprises (MSMEs).
Purchasing power
Jennifer Bretaña, director of the National Economic and Development Authority (Neda) 7, said in the same press conference that the wage hike aims to improve the purchasing power of workers.
However, Bretaña, who also sits as director of the RTWPB 7, that without corresponding productivity improvements, it could lead to higher inflationary pressure and price increases for basic commodities.
The new rates will be implemented on Oct. 2, the day after the anniversary date of the prior regional wage order. The RTWPB 7 issued its last wage order on Oct. 1, 2023.
Initial proposal
The labor sector initially proposed a P150 wage hike, while the management sector favored no increase at all.
Bretaña explained that their calculations at the Neda 7 indicated any salary adjustment beyond P33 to P43 could disrupt the local economy.
The wage board considered various socio-economic factors in determining the increase, including the consumer price index, average inflation rate, purchasing power of the peso, poverty threshold, gross regional domestic product’s growth rate and labor productivity growth rate in Central Visayas.
The impact on MSMEs, which comprise 90 percent of businesses in the country, was also taken into account.
Bretaña suggested that to cope with the increased salary, the management sector could adopt technology to boost productivity, accept reduced profits, or slightly increase product prices.
The official emphasized the importance of minimizing any additional cost passed on to consumers.
Wage order details
The approved Wage Order ROVII-25 sets the following new minimum daily wages:
Class A (Cities of Carcar, Cebu, Danao, Lapu-Lapu, Man-daue, Naga, Talisay and municipalities of Compostela, Consolacion, Cordova, Liloan, Minglanilla, San Fernando): Increased to P501 from P458-P468.
Other cities not classified under Class A (Bais, Bayawan, Bogo, Canlaon, Dumaguete, Guihulngan, Tagbilaran, Tanjay, Toledo): Increased to P463 from P425-P430.
Class C (municipalities not covered under Class A and B): Increased to P453 from P415-P420.
Non-compliance, exemptions
RTWPB 7 secretary Evita Mendoza-Balane warned that non-compliance with the new wage order would result in penalties, including double indemnity for delayed or unimposed salary increases.
She encouraged employees to report any violations to the Department of Labor and Employment’s Single Entry Approach, a system designed to facilitate the prompt resolution of employer-employee disputes.
Balane also mentioned that retail or service establishments with no more than 10 employees, or those adversely affected by natural or human-induced calamities, may apply for exemption from the wage hike until Nov. 30.
Both the workers’ and management sectors remain hopeful that the country’s economic recovery will improve labor productivity and overall economic conditions. / EHP