THE Employers Confederation of the Philippines (ECoP) said large wage hikes are no longer workable now that the Philippines has the highest minimum wages in Southeast Asia.
“We are the highest now in ASEAN because of these yearly increases,” according to ECoP President Sergio Ortiz-Luis, Jr., referring to the practice of annual wage fixing by region, which started with the Wage Rationalization Act of 1989 (Republic Act 6727).
Mr. Ortiz-Luis made the remarks days before the employers are to participate in a May 28 wage consultation organized by the Regional Tripartite Wages and Productivity Board (RTWPB) of the National Capital Region (NCR).
Wage hike bills are pending in Congress, with the Senate approving a bill for a P100 daily wage increase in the private sector and the House of Representatives endorsing a P200 across-the-board daily wage increase.
According to Mr. Ortiz-Luis, a legislated wage hike’s benefits are limited, as minimum wage earners account for only 10% of the workforce.
He said that when a P120 wage hike was proposed years ago, the Philippines still had the lowest minimum wage in the region.
“The situation is different now,” he added, speaking on the sidelines of the Philippine Institute for Development Studies forum on Monday.
ECoP said it supports the current regional wage-setting process, as the boards are best-placed to determine appropriate pay settings for a given region.
“It should be based on the inflation study and the economic situation,” he said, referring to the RTWPBs. “There are formulas that they use, a standard they are using. So they should just follow the tripartite (boards) because they are the ones who know it,” he added.
Asked if the ECoP has come up with a position ahead of the consultation, he said, “We will be there without anything in mind.”
RA 6727 gives the RTWPBs the power to determine minimum wages in their jurisdictions, subject to the guidelines issued by the National Wages and Productivity Commission.
The RTWPBs can only adjust minimum wage rates after the anniversary of their previous wage order.
Last year, the RTWPB-NCR issued Wage Order No. NCR-25, which approved a P35 wage increase. — Justine Irish D. Tabile