The Negros Oriental Chamber of Commerce & Industry has expressed its “strong opposition” to the petition of the Associated Labor Unions-Trade Union Congress of the Philippines for a P132 across the board wage increase and another petition for a P90 increase filed by the Coalition of Living Wages.
The NOCCI position was given during a hearing conducted by the Regional Wage Board last Thursday at Bethel Guest House.
In a position paper, the NOCCI reminded the Board of a pending petition for a moratorium on all wage increases, signed by all the presidents of the chambers of commerce in the Visayas, until all business establishments shall have fully recovered from the recent calamities that have severely hit the three Visayas regions in the last three years.
Another reason forwarded by the NOCCI is that most businesses in Negros Oriental belong to the micro and small category, which cannot afford to pay an additional P132 a day or P3,900 per month to all its workers. It said that in addition to high energy costs, businessmen also face other challenges ranging from high taxation to expensive logistics and stiff regulations. The proposed increase, it said, would aggravate their present financial situation and might force them to retrench their workforce or stop operations.
The NOCCI also cited the twin threats of climate change and the Asean Free Trade Area. The lowered taxes of imported goods as mandated by AFTA, is creating stiff pressure on local producers, particularly sugar and coconut, the province’s key industries.
The business sector said wage adjustments are inflationary because the businessmen will just pass on the additional wage increase to the consumers. This will create a vicious cycle which will put the public at a disadvantage.
Another reason mentioned by the NOCCI is that annual wage adjustments will discourage and deter foreign investors from doing business in the Philippines as we will no longer be competitive compared to most of our ASEAN neighbors. Indonesia, Vietnam, Cambodia, and Myanmar current minimum wage range from a low of US$0.52 to a high of US$7.50. The current daily minimum wage for Negros Oriental is already nearing US$7.00. If annual wage adjustments continue, all the efforts and gains achieved by the Negros Oriental Chamber of Commerce in attracting local and foreign direct investments will be negated and stifled, the paper said.
The NOCCI said the real problem facing the country now is not low wages but increasing unemployment, which the business sector blamed on the annual wage hikes. The unemployment figure in 2012 was 7 percent, which became 7.3 percent in 2013 despite the impressive 7 percent GDP/economic growth rate.
“We believe the government’s dream of “inclusive growth” cannot be achieved if wage adjustments continue. High wages discourage local and foreign investors and worse, forces existing businesses to retrench workers instead of creating new jobs. Put simply, high wages is counterproductive because it will further aggravate the problem of unemployment and jobless growth in the coming years,” the paper continued.
The Chamber recommended that instead of annual wage hikes, the government should focus on promoting and encouraging workers to save money. “Many workers are fond of spending beyond their means through various payroll deductions, credit cards and even mortgaging their ATM cards to loan sharks. No amount of wage adjustments can stop the bad spending habits of our workers today. In the end what really matters is the workers’ net take home pay, not the minimum wage,” it said.
The Chamber, however, said it was amendable to a wage increase based on the prevailing inflation rate or Consumer Price Index of Region VII.
