Employers urged government to focus on providing financial subsidies to minimum wage earners instead of granting increase in daily minimum salary that could only lead to more job losses and rising cost of products at this time when businesses and the domestic economy are still in a precarious condition.

In a joint position on the pending wage hike petitions filed with the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR), the Employers Confederation of the Philippines (ECOP), the Philippine Chamber of Commerce and Industry (PCCI), and Philippines Exporters Confederation (Philexport), pointed out of dire repercussions on wage hikes.

“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,” the groups said. The country’s unemployment rate stood at 6.4 percent as of February 2022 or 3.13 million unemployed.

Four petitions are pending at the RTWPB-NCR calling for hikes in daily minimum wage ranging from P213 to P470.

According to the management side, even if such increase is limited to minimum wage earners, the employers groups said, “it actually leads to wage distortion” or a situation that could lead to the obliteration of the prevailing salary structure within the company.

“It should be emphasized that our country is still in a precarious economic condition,” the groups stressed.

Instead of granting the petition for increase in minimum daily wage, employers urged that government should put greater attention on jobs creation and preservation of existing jobs. “This cannot be addressed by adding to the cost of doing business fueled by a wage increase,” the groups added.

The government was also urged to be more aggressive in providing cash and non-cash assistance to the minimum wage earners including the members of the informal economy because business particularly the micro small and medium enterprises still remain in dire straits and ordinary workers are also in need of financial assistance to meet their day to day needs.

MSMEs constitute the pillar of the Philippine economy. In 2020, the Philippine Statistics Authority (PSA) recorded a total of 203,070 business enterprises operating in the NCR. Of these, 167,385 (82%) belong to the micro, 31,975 (15.7%) belong to the small, and 1,763 (.9%) belong to the medium enterprises. In sum, MSMEs constitute 98.6% of the total number of establishments in the NCR.

Given these numbers, the employers’ side said government should be able to formulate policies that would help not only those pandemic affected, but also typhoon-ravaged MSMEs to properly recover and remain in operations.

By helping MSMEs survive, this will also prevent widespread unemployment, and thus preserve household income. MSMEs have been hit hardest by the COVID-19 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 employers said.

ECOP, PCCI and Philexport cited the rising cost of products with inflation hitting 4.9 percent, fueled by skyrocketing fuel products, and record high debt of P12.03 billion as of March this year.