NextGen Day

On Thursday, the Employers’ Confederation of the Philippines (ECOP) made it clear that it is against salary changes that have not been approved by regional tripartite wages and productivity boards (RTWPBs), not the principle of giving wage raises.

In an interview, Sergio Ortiz-Luis Jr., president of ECOP, stated that RTWPBs, which have equal representation from the labor, employer, and government sectors, were established by Congress to assess the timing and magnitude of compensation increases.

He emphasized that the Trade Union Congress of the Philippines (TUCP) Party-list’s recently introduced House Bill 7871, known as the Wage Recovery Act of 2023, seeks to legislate a PHP150 increase in the daily minimum wage without the benefit of multi-sector consultations, which is the accepted practice under the RTWPBs’ system of wage-setting.

“The current wage-setting mechanism (under the wage boards) is effective. Legislating a pay increase merely polarizes the debate, the businessman claimed.

Ortiz-Luis emphasized that the planned statutory wage increase will help the formal sector’s 8 million employees.

What prevents the informal sector from requesting the same financial support if they provide the formal sector PHP150 per day? The government will incur high costs. As a result, he noted.

Ortiz-Luis responded to remarks made by TUCP vice president Luis Corral, who accused ECOP and government economic managers of allegedly “ganging up” against efforts by the labor sector to raise salaries in light of recent inflation spikes.

If a wage hike is approved, these companies and economic managers will start to scaremonger about the widespread closure of MSMEs and scenarios of skyrocketing inflation. The question of whether or not workers’ present minimum earnings can even buy a decent lunch for a family of five, healthcare, and education for their children is being discussed with little to no consideration, according to Corral.
When Finance Sec. Benjamin Diokno cited government research indicating that a PHP150 per day wage raise at this time would result in a 1.4 percentage point increase in 2023 inflation, it set off a contentious dialogue between the labor and employer sectors.

According to the finance chief, the proposed pay rise might increase the estimated inflation rate for 2023 from 5.5 percent to 6.9 percent.

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