ECOP: Wage hike may discourage foreign investors
DOLE defends P10 wage hike
MANILA, Philippines - The Philippines already has the highest minimum wage among several Southeast Asian countries, according to an official of the Employers Confederation of the Philippines (ECOP).
In an interview on ANC's Headstart, ECOP president Ed Lacson said increasing the minimum wage further may discourage foreign companies from investing in the Philippines.
"We are the highest minimum wage in Asia, among 8 countries. In the Philippines, it's $10.25 (P456) a day. Malaysia is $9.75, Thailand is $9.75, Indonesia is $7.46, Vietnam is $3.15, Cambodia is $2.03 and ito nakakagulat, Myanmar is only $0.52," he said.
"If we keep on increasing the minimum wage, we are sending a very wrong message for all investors to come," Lacson added.
Last week, the wage board approved a P10 increase in the minimum wage for workers in the NCR, bringing the daily wage to P466 from the current P456.
But TUCP spokesman Alan Tanjusay said it's not fair to compare the wages of Filipino workers to those in other Southeast Asian countries because of the different economic and political conditions.
"Bakit marami pa rin nagpupunta sa mataas na sahod, sa South Korea at nag-iinvest? Kung mataas sahod sa Japan, bakit marami pa rin nagpupunta sa Japan," he asked.
Defending the P10 wage hike
Department of Labor and Employment director Nicon Fameronag defended the P10 increase, amid complaints from labor groups that it is too small.
Fameronag said they had to consider if companies would be able to afford the wage increase. Around 99% of businesses in the country are micro, small and medium enterprises.
"Among the factors considered is its impact on business. The government has also the mandate to preserve employment, meaning we cannot just decide when the effect of the decision for businesses to be closing or layoffs," he said.
The DOLE official said there have been 12 wage increases in the NCR since 1999, with a total increase of over P200 a day.
He added any huge increase in minimum wage will distort the market, which could result in layoffs.
"If there is a large increase in minimum wage, there will be a large distortion... There is pressure for the company is to raise the wage for others in the hierarchy. So there is very careful act of deciding, the amount of increase should be ordered by the wage board so that not so much distortion can happen in the labor market," Fameronag said.
Meanwhile, the DOLE reiterated its push for a two-tier wage system, where wage increases will be based on the performance of workers. The proposal is supported by employers, but labor groups have opposed it.
"Since 2010, we have been pushing for the two-tier wage system is there will be a basic wage and all the rest, bonuses, will be based on the skill and the productivity of the company. The workers and employers would agree on the range of productivity, incentive bonuses they can get," Fameronag said. - With ANC