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ECOP: P150 pay increase could deepen formal-informal sector pay discrepancy

The proposed PHP 150 statutory daily pay rise, according to the Employers Confederation of the Philippines (ECOP), will simply deepen the wage disparity between the formal and informal sectors.

Sergio Ortiz-Luis, president of ECOP, stated during the Laging Handa public briefing on Wednesday that the proposed wage increase, which is currently before the Senate, will only benefit 16 percent of the employed Filipinos.

“Only 16 percent of the 50 million workers would profit from the mandated wage hike. Who are those 84 percent, exactly? Farmers, fishermen, market vendors, people working in small industries, and tricycle and jeepney drivers are among those who are unemployed. Who will raise the 84 percent’s wages if you raise the wages? said Ortiz-Luis in Filipino.

The informal sector will not be able to afford increasing commodity prices as a result of wage increases, he continued.

Are there any other government initiatives available to the 84 percent of workers who won’t get salary increases? Our budget couldn’t support that if the government agreed to pay PHP150 per employee for the 42 million workers, he said.

According to Ortiz-Luis, firms, particularly big businesses, have been generous in providing benefits to their employees even in the absence of the legally mandated salary increase.

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