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ECOP dreads adverse impact of proposed P150 wage hike to MSMEs

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Let’s not assume we can give what we are not able to give, warns the head of the umbrella organization of Philippine employers as the proposed legislative bill seeking a P150 across-the-board minimum wage hike takes another step toward passage.

Sergio Ortiz-Luis, Jr., president of the Employers Confederation of the Philippines (ECOP), gave this warning in a May 11 live interview with broadcaster Erwin Tulfo on the news anchor’s radio program.

“Huwag nating isipin na kaya nating ibigay ang hindi natin kayang ibigay,” Ortiz-Luis said in reaction to the approval in principle by the Senate Committee on Labor, Employment and Human Resources on May 10, 2023 of the bill proposing a P150 wage increase for all private sector workers in the country.  

The business chief said 90% of enterprises in the Philippines are micro enterprises on survival mode that won’t be able to afford the expected increase in wages.

“Kalahati nun nung pandemic nagsara. Hanggang ngayon marami ang hindi pa nagbubukas. At ang 13th month pay nga ni hindi kayang bayaran, tataasan mo ng P150 a day?” he asked.

He foresees three possible actions by micro enterprises if the bill gets passed: Increase the prices of their products, reduce the number of their workers, or simply close down.

Moreover, Ortiz-Luis said only a small percentage of the total workforce—16% or about 8 million in the formal sector out of the 50 million in total number of Filipino workers—will be the beneficiaries of the bill.

A staggering 84%, who are workers in the informal sector, are not expected to see any gain since most of them work on their own with no employer, he added.

He said this 84% represents around 42 million workers that include farmers, fishermen, market vendors, jeepney drivers, tricycle drivers, and home-based small entrepreneurs that he claimed comprise the silent majority whose situation will not improve with the bill’s passage.  

“Out of 50 million, 42 million ang hindi mabibiyayaan. Sino ang magtataas ng sweldo nila?” he said.

“Paano na ang mga walang representasyon, ang mga hindi nakapagsasalita? Tataas ba ang huli ng mga mangingisda dahil nagtaas ang minimum wage? Ang mga farmers gaganda ba ang ani nila?”

He also disputed the idea that wages in the Philippine are low. “Pangalawa tayo sa pinakamataas ang minimum wage dito sa ASEAN,” he insisted.

He pointed out that prices of goods in neighboring countries are lower, which compensates for the higher wages. “Despite na mas mataas ang sweldo nila, mababa ang presyo ng bilihin sa Thailand, for instance. Mababa ang presyo sa Vietnam. Sa atin mataas, dapat mapababa yun.”

He continued “…pero tama naman ang ginagawa ng gobyerno. Nag-iimbita ng mga investors because investors mean jobs… Huwag nating isipin na kaya nating ibigay ang hindi natin kayang ibigay.”

In earlier interviews, Ortiz-Luis has always pressed for the creation of more jobs rather than salary hikes as a way to help the informal workers as well, not just the formal workers.

In March 2023, Senate President Juan Miguel Zubiri filed Senate Bill No. 2002 or the Across-the-Board Wage Increase Act of 2023, which aims to raise wages in the private sector across all regions by P150.

News reports said the bill is expected to be passed either in June or July this year.
At present, the National Capital Region has the highest daily nominal wage rate at P570 (non-agriculture), while the lowest is at P316 (non-agriculture) for the Bangsamoro Autonomous Region in Muslim Minda

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