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ECoP warns P750 wage hike to force small firms to downsize or raise prices

By Beatriz Marie D. Cruz

THE EMPLOYERS Confederation of the Philippines (ECoP) said micro and small enterprises, which account for 98% of all businesses, may have to raise prices or reduce their staffing if Congress legislates a P750 wage hike.

“90% of our enterprises are micro, 8% are small, 1% are medium, and 1% are large,” ECoP President Sergio R. Ortiz-Luis, Jr. said by telephone.

“Any untoward increase would push the company to either pass it on to the market or downsize its workforce,” Mr. Ortiz-Luis said.

“I’m not even speaking for the big ones, because they can probably afford it,” he said.

House Bill No. 7568, filed by the minority bloc, proposes a wage increase of P750 for all private-sector workers, including those working in special economic zones, freeports, and in the agricultural sector. The bill runs contrary to the advice of economic managers, who warned that such a wage increase could affect the Philippines’ competitiveness.

Kabataan Party-list Rep. Raoul Danniel A. Manuel said in a briefing on Thursday that small businesses will not be left behind because the pending bill has provisions for wage subsidies.

Under the measure, micro and small enterprises and landowners owning at most five hectares may apply for subsidies until they are able to fully afford the proposed increase. However, companies cannot lay off workers or reduce headcount to comply with the proposed wage increase.

Mr. Ortiz-Luis said, “I don’t think the government can afford to subsidize the whole of the 90% (micro and small enterprises), considering it will still need to provide the P2,000 subsidy,” referring to the government’s P9.3-billion cash transfer program for nine million poor households.

He also said any wage increase proposals should be referred to the Regional Tripartite Wages and Productivity Board (RTWPB) because a legislated wage increase “will be politicized, you will never know what their (motives) will be.” He added that workers, employers, and government agencies are better represented in regional wage boards.

The RTWPB in January said that the National Capital Region had the highest daily minimum wage at P570. The lowest was the Bangsamoro Autonomous Region with P316.

Senate President Juan Miguel F. Zubiri has filed a bill seeking a P150 minimum wage increase.

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