Metro Manila wage board readies increase

REPORT FROM BUSINESSWORLD The Metro Manila wage board is scheduled to issue an order increasing private sector wages this Monday, answering calls by both labor and the government for salary adjustments given the higher cost of living. Ricardo S. Martinez, Sr., Labor department regional director and chairman of the Metro Manila wage board, said the board would be issuing its order on Monday following the end of public consultations on Wednesday. He said the board will need three days to deliberate on the issue and would be working through the weekend to meet the Monday schedule. The Trade Union Congress of the Philippines (TUCP) has filed a petition for a P75 across-the-board wage increase. In its petition filed last May 16, the moderate labor group said its demand comprises a P46 adjustment for higher prices and P29 in recognition of a worker’s economic contribution. The Metro Manila wage board’s decision is usually used by other wage boards as the benchmark for their own wage orders. The last increase for Metro Manila was a P25 increase in the daily minimum wage to P325 ordered on May 30, 2005. Mr. Martinez said a wage hike was "most likely" but declined to specify whether this would be in the basic wage or via an emergency cost of living allowance. The current P325 Metro Manila minimum wage comprises a P275 basic wage and P50 in cost of living allowances. The Employers Confederation of the Philippines (ECoP), which has bucked calls for increases, on Wednesday told the public hearing that "the board should be judicious and prudent in considering the implications of the wage adjustment on the economy." The group said that a P75 hike as called for by the TUCP will force the companies to cough out a total of P68.4 billion a year, which could "trigger inflation further since labor cost is a big factor." Industry representatives said higher wages will bring down the country’s competitiveness, calling the current P325 rate already higher than in other countries. Further increases, they warned, could prompt investors to move to countries with lower labor costs. In dollar terms, they said Metro Manila offers $6.17 to its workers compared to Vietnam’s $1-1.29, China’s $2.04-2.48 and Thailand’s $3.47-4.37. The automotive and the motoring industries likewise urged the government to look into schemes or programs that would promote the productivity of workers. The Bankers Association of the Philippines, meanwhile, said the "more appropriate vehicle for wage increase is through collective bargaining negotiations." The TUCP, however reiterated the need to increase wages "since inflation has crept up several times already." A one-time adjustment via the wage boards, he said, is more relevant compared to the P125 legislated wage hike pushed by militant labor and supported by a number of legislators. The last legislated wage adjustment was made under Republic Act 9727 issued in 1989. The law, however, also transferred the power of adjusting wages to the regional tripartite wages and productivity boards. These boards, composed of representatives from the government, labor and employers’ groups, are limited to adjusting minimum wages and one wage order per year. The call for wage increases was spurred by record oil price increases earlier this year, which led to the government’s adopting mitigating measures such as a lower import tariff on oil products to cushion the impact on consumers. President Gloria Macapagal Arroyo, in a speech during Labor Day, backed the call for higher wages but said these should be done via the regional wage boards. The Labor department on Wednesday said that outside of Metro Manila, the wage board in Region 10 (Northern Mindanao) conducted its public hearing last June 20, while the boards in Regions 2 (Cagayan Valley), and 7 (Central Visayas) will hold theirs on July 6. Wage board meetings and deliberations in regions with labor petitions have either been concluded or set as follows: Region 2, June 15, July 6 and 20; Region 3 (Central Luzon), June 14; Region 4-A (Calabarzon), June 13; Region 6 (W. Visayas), June 9; Region 7, July 13; Region 10, June 7, 23-29; and, Region 11 (Davao, June 9 and 10. Labor officials said wage boards in regions which have not received labor petitions have also started deliberations, particularly the Cordillera Administrative Region, Region 1 (Ilocos), Region 5 (Bicol), Region 8 (E. Visayas), and Region 12 (SOCCSKSARGEN). – IPP/BusinessWorld