Trade groups buck proposed P100 wage hike amid high costs

By Othel V. Campos

TRADE groups asked the National Capital Region wage board not to approve the proposed P100 hike in the daily minimum wage in Metro Manila as companies have yet to recover from the pandemic fallout and spiraling cost of operations.

Philippine Exporters Confederation Inc. vice president Ma. Flordeliza Leong said during the public hearing on June 21 that employers, especially those running micro, small, and medium enterprises, were still recovering from their pandemic-induced losses and that many MSMEs closed down due to the effects of the pandemic.

“Any petition will never be enough when employers and business owners have no means to increase the salaries. Prices will go up, and another wage hike will be proposed because of this. I don’t think it will ever be enough. It’s a vicious cycle,” Leong said

She reminded the Regional Tripartite Wages and Productivity BoardNational Capital Region that inflation not only affect consumers but producers as well, as it raises both the prices of consumer goods and the cost of raw materials used in manufacturing.

She said inflation hurts consumers and manufacturers alike.

Labor groups presented their case during the hearing and their reasons for a substantial wage increment.

Some of the labor groups sought a P100 daily increase to recover the purchasing power of workers’ wages, while others petitioned for a new P1,161 minimum wage in the metropolis.

The trade associations opposed the requests for a substantial increase because it is detrimental to the recovery of the economy and the survival of most businesses.

PhilExport said a wage increase would be bad for the Philippines, which is already ranked second highest in the 10-member ASEAN region in terms of wages but is near the bottom of the list in economic performance.

FINANCE Secretary Benjamin Diokno is confident the economy will continue to be robust despite the risks mostly emanating from the external front.

“Expectedly, producers and sellers of sugary products subjected to tax will object as it will raise the selling price of their products to the market. But knowing the big difference between the world price and the domestic price of sugar [a major input in the industry], then allowing the industry to import their own sugar requirement would reduce their cost of production,”

Diokno said.

“This is the ‘sweetener’ or incentive for producers of sugary products to accept the broader, simpler tax on sugary products,”Diokno said.

He said the proposal makes good economic sense, as it simplifies the tax system, wherein one uniform rate is better than dual rates.

He said it achieves the proposal to make Filipinos live healthier and longer lives. In the long run, it also reduces the costs to the government for providing health care for its people. Diokno earlier said the Department of Finance and the Department of Health were jointly pursuing a junk food and sweetened beverage tax as a proactive measure to tackle diabetes, obesity, and non-communicable diseases related to poor diet.

Under the proposed tax program, the DOF plans to impose a P10 per 100 grams or P10 per 100 milliliters tax on pre-packaged foods lacking nutritional value, including confectioneries, snacks, desserts, and frozen confectioneries, that exceed the DOH’s specified thresholds for fat, salt, and sugar content.

Julito G. Rada