LABOR Secretary Francis Tolentino on Wednesday defended the decision to grant Metro Manila minimum wage earners an P85 daily increase in two tranches, saying the move was carefully designed to cushion the impact on small businesses.
Tolentino said the Regional Tripartite Wage and Productivity Board weighed the concerns of small entrepreneurs before approving the wage order.
“We considered small business owners so they would not be caught off guard,” he said, noting that workers would initially receive a P60 increase, followed by an additional P25.
The Labor chief also dismissed claims that the wage adjustment was prompted by recent protest actions by members of the Iglesia Ni Cristo, saying that the wage petition underwent the proper process and was approved only after consultations with labor groups, employers and government representatives.
“Some say it was sudden, but extensive consultations took place before a decision was reached,” he said, adding that the increase was not a reaction to any rally or public demonstration.
Tolentino acknowledged that some employers may eventually pass higher labor costs on to consumers but argued that restoring workers’ purchasing power was the bigger priority because of soaring electricity costs and increasing prices of basic goods that have significantly eroded workers’ spending capacity.
The business sector has warned that the wage increase could have unintended consequences.
Sergio Ortiz-Luis Jr., president of the Employers Confederation of the Philippines (ECOP), said many small and micro enterprises are already struggling to survive, and higher labor costs will force them to raise prices, reduce their workforce or shut down altogether.
Ortiz-Luis also pointed out that additional labor expenses could further discourage investors and worsen the difficulties already confronting small firms even as he assured that despite their reservations, ECOP said it would comply with the wage order and has no plans to appeal the decision.
The think tank Ibon Foundation executive secretary Sonny Africa said the P85 wage adjustment is still far below what workers need to meet the cost of living in Metro Manila.
He noted that the region’s family living wage remains roughly P500 lower than the prevailing minimum wage even after the increase.
He also rejected arguments that businesses should pass the added labor costs on to consumers, saying that the wage adjustment represents only a small portion of business profits and should not automatically trigger higher prices.
The Federation of Free Workers (FFW) rejected the claim that a wage increase would benefit only a small number of formal-sector workers while leaving behind those in the informal economy.
“Nothing could be farther from the truth,” FFW Vice President for Luzon Manuel Payao said.
“When workers receive higher wages, they do not stash their money in offshore bank accounts or investment portfolios. They spend it immediately on rice, fish, vegetables, transportation, medicines, school supplies, rent and other daily necessities. Every peso goes back to sari-sari stores, public markets, tricycle and jeepney drivers, food vendors, repair shops, barbers, dressmakers and millions of Filipinos in the informal sector,” said Payao, who is also the president of the UERM Employees Union-FFW FFW, that it is precisely the reason they continue to campaign for a P200 nationwide legislated wage increase. WILLIAM DEPASUPIL
“We reject a wage system that pays workers differently simply because they live in different regions, even though they all face the same rising prices of food, electricity, fuel, housing, education and health care,” it said.
