NEDA, DOLE ditch proposed P125 wage hike

MANILA, Philippines – The prospect of a uniform P125 wage hike across the board in the private sector will not happen due to the impact it will have on regional inequality and small businesses, according to the National Economic and Development Authority (NEDA).

“That’s not going to pass. We already talked with Labor Secretary Silvestre Bello, and he agrees with our position,” said Socioeconomic Planning Secretary Ernesto Pernia on the sidelines of the 42nd Philippine Business Conference & Expo on Tuesday, October 11.

“Different regions have different conditions, cost of living conditions, so you cannot just enforce a uniform increase across all regions,” he added.

Bello had earlier ordered all the Regional Tripartite Wages and Productivity Boards to conduct nationwide consultations on the legislative measures proposing a P125 across-the-board general wage increase for workers in the private sector.

The labor secretary later clarified that the uniform wage hike was not the stand of the Department of Labor and Employment (DOLE) as a whole, but rather a personal position of one of its undersecretaries.

The proposal has been raised for several years.

Impact on small businesses

Pernia further explained that the uniform wage hike would place constraints on small businesses which are seen as key to driving economic growth.

“NEDA has done some impact analysis and it’s going to affect employment because with higher wages, many firms would not be able to afford to keep their workers or hire workers, especially micro, small, and medium-sized enterprises, will be hard up with that kind of an increase, across the board,” he explained.

Aside from NEDA, Trade Secretary Ramon Lopez also rejected the uniform wage hike proposal. Lopez, however, is working with the DOLE to come up with a “win-win” solution to address the problem of contractualization.

“We are in charge of economic development, we’re in charge of promoting employment, we’re in charge of keeping inflation under control, but this policy or this move will definitely impact adversely on these 3 major economic concerns,” Pernia also said.

“It will probably have political attractiveness to the congressmen. (But) it’s going to dampen investors from investing in the regions especially those seeking lower wages, lower minimum wages in the regions,” he added. – Rappler.com