Business Technology, Finance Technology & Information Technology
ECOP echoes Diokno’s warning on the inflationary impact of salary increases.
On Monday, the Employers’ Confederation of the Philippines (ECOP) maintained that any legislated wage increase would only benefit the roughly 8 million workers in the formal sector, leaving the rest to deal with greater inflation.
According to ECOP President Sergio Ortiz-Luis, the labor sector’s demand for a PHP150 per day salary hike will not apply to workers in the informal sector, who make up the great majority of workers.
He emphasized that even though the estimated 42 million workers in the informal sector do not stand to get a salary rise imposed by Congress, they will still be subject to price pressures.
The business leader claimed that the wage increase would not benefit farmers, fishermen, merchants, tricycle drivers, or those operating small family businesses and would be very inflationary.
Given that many microbusinesses “can’t even afford to pay their employees’ 13th-month pay,” Ortiz-Luis claimed that it is unlikely that the majority of them could afford to pay a significant wage increase.
The leadership of ECOP reacted to Finance Secretary Benjamin Diokno’s recent caution that a PHP150 per day wage increase might likely increase inflation expectations for this year by 1.4 percentage points.
According to Diokno, the proposed salary rise could raise the inflation rate from the 5.5 percent now anticipated to 6.9 percent in 2023.
To make up for recent increases in inflation, the Trade Union Congress of the Philippines filed House Bill 7871, the Wage Recovery Act of 2023, on April 19 through House Deputy Speaker Raymond Democrito Mendoza.
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