Industry chambers and other business groups cautioned against across-the-board wage increases as this may dampen interest in the Philippines as an investment destination and cause more unemployment.
In a letter dated August 1, the Joint Foreign Chambers of the Philippines warned Alex Avila, chair of the NCR Wages and Productivity Board, that an increase in minimum wage in Metro Manila will result in employee-lay-offs.
The letter cited that the country has the highest minimum wage rate among Asean countries, at $10.74, compared with Thailand and Malaysias’s $9,75, China’s 8.08, and Indonesia’s 7.46.
Joint signatories of the letter were the heads of the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce of the Philippines, and the Philippine Association of Multinational Companies Regional Headquarters, Inc.
More recently, the Philippine Exporters Confederation, Inc. (PhilExport) joined the call to hold off plans to increase minimum wages.
It is the last thing companies, including micro, small and medium enterprises, need, PhilExport president Sergio Ortiz Luis said. It will not only undermine local businesses’ ability to survive and grow and keep their workers but also detract from their competitiveness versus counterparts in other Asian countries.
Instead of an across-the-board wage hike, PhilExport is backing the implementation of the two-tier wage adjustment system by the Department of Labor and Employment (DOLE), under which the minimum wage is set close to the regional poverty threshold, with the second tier being additional compensation based on productivity.