The Employers Confederation of the Philippines (ECOP) said employers will honor the P50 minimum daily wage hike in the National Capital Region (NCR) because it went through due process, but it added that the organization fears for the impact of the salary increase on micro enterprises in particular.
ECOP and Philippine Exporters Confederation, Inc. (PHILEXPORT) president Sergio R. Ortiz-Luis Jr. in radio interviews said they expect micro enterprises, which represent some 90% of businesses in the country, to be seriously affected by the pay raise because computation would show that the actual increase will be more than that.
He told DZXL News: “Hindi lang P50 yun. Pag sinabi mong P50 plus 30%, so mga P65 dahil tataas yung SSS, Pag-IBIG, overtime, separation pay, bonus. Equivalent to 30% so P65 bale. Kung 4,000 empleyado mo imagine mo kung magkano yun a day.”
(“It’s not just P50 but plus 30% or P65 since there will also be increases in their SSS, Pag-IBIG, overtime, separation pay, bonus. If you have 4,000 employees, you can imagine how much it will cost a day.”)
But Ortiz-Luis said employers will respect and comply with the decision because it went through the proper process and underwent discussion by members of the regional wage board.
In earlier interviews recently, Ortiz-Luis said ECOP was opposed to any legislated wage hike in the future, pointing out that all salary adjustment recommendations should always be reviewed by the multisectoral regional wage board rather than by politicians.
Asked whether the fallout from the earnings increase will include job cuts or closures, the business leader told DZXL he hoped not, even as he expressed worries that micro enterprises may not be able to bear the impact of higher wages.
The minimum pay increase is granted annually and over the years, this has made the Philippines the country with the highest minimum wage in the region, Ortiz-Luis further said.
Meanwhile, on DZBB, told that micro enterprises can apply for exemption from the wage hike, Ortiz-Luis explained that it will entail costs such as lawyers’ fees and that the exemption only holds for one year, so entrepreneurs are not keen to pursue this remedy.
He also voiced concern for the country’s informal workers like the farmers, fishermen and tricycle drivers who, unlike private sector workers, have no employers to give them higher pay to cope with the ensuing inflation.
Furthermore, he pointed out that of the 52 million workers in the Philippines, only 10% to 16% are minimum wage earners, leaving 90% to 84% excluded from the salary hike.
According to the Department of Labor and Employment (DOLE), minimum wage earners in Metro Manila will get a P50 daily wage increase, the highest pay hike ever granted by the National Wages and Productivity Commission, starting July 18.
The raise would benefit about 1.2 million workers in Metro Manila and nearby cities and provinces.
The new daily minimum wage in the NCR is expected to increase to P695 from P645 for the non-agriculture sector, and to P658 from P608 for agricultural workers and employees in service and retail establishments with 15 or less workers.
Laborers in manufacturing establishments employing less than 10 workers will also receive a daily wage of P658.
The daily pay hike is equivalent to a P1,100 per month increase for a five-day work week or a P1,300 increase for those working six days a week.
The labor department added that the NCR wage board considered the country’s latest gross domestic product, inflation rate, and unemployment rate in approving the wage increase.