“What deserves greater attention is the primordial need to create more jobs and preserve those that still exist. This cannot be addressed by adding to the cost of doing business fueled by a wage increase,” the Employers Confederation of the Philippines (ECOP), Philippine Chamber of Commerce and Industry (PCCI), and Philippine Exporters Confederation, Inc. (PHILEXPORT) said in a joint position paper opposing the wage hike petitions pending before the Regional Tripartite Wages and Productivity Board- National Capital Region (RTWPB-NCR).
“We understand the basis for the petitions. However, we request the RTWPB-NCR to seriously consider various socio-economic indicators as they impact on ordinary workers and employers, especially the micro, small and medium enterprises (MSMEs), alike and caution against the politicization of the wage issue in the light of the forthcoming May 9, 2022 local and national elections before making any decision vis-à-vis the petitions.”
In the statement, the group explained that MSMEs constitute the pillar of the Philippine economy as 98.6% of the total number of establishments in the NCR are MSMEs. Given this number, the group called on the government to formulate policies that would help MSMEs to properly recover and remain in operations as they have been hit hardest by the pandemic.
“Many of them have temporarily closed, have permanently closed shop, or are barely surviving. Thus, we call on government to find ways for MSMEs to remain solvent and be able to meet their financial requirements. We believe that supporting small businesses by creating opportunities for MSMEs to thrive is essential to increase productivity, create jobs, and boost our national economy,” the group reiterated.
The large informal economy in the Philippines, comprising 84% or around 36 million out of 44 million Filipinos in the labor market, was also mentioned in the position paper. The group explained that most workers in the informal economy are not covered by social protection, occupational safety and health, and labor protection policies and programs.
“Workers under the informal sector are not covered by minimum wage increases issued by the Regional Wage Board. In short, a wage increase would only benefit a very small portion of workers in the NCR. A sad reality that we hope the government will address in the near future.”
Instead of a wage increase, the business orgs called on the government to provide ample support for the struggling MSMEs and to create sustainable and decent jobs for the unemployed, as well become more aggressive in providing cash and non-cash assistance to the minimum wage earners including the members of the informal economy.
“The possibility of job losses and rising cost of products cannot be discounted as a consequence of a minimum wage increase. Alternatively, businesses may find it more prudent to close their operations or pass on the added cost to consumers. Even if such increase is limited to minimum wage earners, it actually leads to wage distortion, a situation could lead to the obliteration of the prevailing salary structure within the company,” they reiterated.