Balisacan: Wage hikes need productivity gains to support economy

Department of Economy, Planning and Development Secretary Arsenio Balisacan on Friday said wage increases could have a short-term impact on the economy if they are not accompanied by increased economic activity and productivity gains.

Balisacan made the remark after the Pasig Regional Trial Court ordered a preliminary injunction on the implementation of the P85 minimum wage increase in Metro Manila, upon the posting of a P10-billion bond.

The court said it was in the “best interest of all stakeholders” to temporarily put the wage order on hold.

Asked how the development could affect Filipino consumers, Balisacan said it was too early to determine its impact since the wage increase has yet to be implemented.

“Wala pa namang changes sa implementation," he told reporters in an ambush interview during the Economic Journalists Association of the Philippines (EJAP) Forum.

(There have not yet been any changes in the implementation…)

Balisacan said the economic impact of minimum wage adjustments depends on how wages are determined across different regions.

“It depends on how the minimum wages are determined. Iba-iba 'yung practice sa regions (Practices vary across regions),” he said

He said higher wages could have a short-term economic impact if they are not matched by increased economic activity.

“But clearly, in the short term, may impact 'yung increase in wages if it’s not accompanied by increases in activity," he said.

Balisacan said other measures should be pursued alongside wage increases to help businesses, particularly small and medium enterprises, improve productivity.

“Palagi nating sinasabi 'yan, dapat marami pang gawin to supplement 'yung increases, kung paano mapa-improve 'yung access ng better technology para improve ang productivity, lalo na may small and medium enterprises," he noted.

(We always say that more needs to be done to supplement the increases, including improving access to better technology to improve productivity, especially for small and medium enterprises.)

The preliminary injunction came on the day the temporary restraining order on the wage increase expired.

The petition against the wage order was filed by Readycon Trading and Construction Corp. and R-II Builders Inc.

A preliminary injunction is an order requiring a party, court, agency, or person to refrain from carrying out a particular act or acts before the court rules on the matter.—AOL, GMA News