Garment exporters back 2-tier wage system

MANILA, Philippines - Garment exporters are supporting the two-tier wage system being pushed by the Department of Labor and Employment (DOLE).

“CONGEP (Confederation of Garment Exporters of the Philippines) is agreeable to the two-tier wage system that the DOLE is promoting,” CONGEP executive director Marites Agoncillo was quoted as saying in a statement from the Philippine Exporters Confederation, Inc.

The two-tier wage system combines a fixed floor wage or entry-level wage for new entrants and low-skilled workers, and a flexible wage above the floor based on worker productivity and industry or enterprise performance, which may be negotiated between the employer and the workers.

CONGEP is in discussions with the Labor department on possible wage flexibilities.

Agoncillo said if a flexible wage system is put in place, about 3,000 individuals are guaranteed of employment in the sector.

Agoncillo said labor is an important consideration in deciding whether to make additional investments as it accounts for the biggest component in the cost of manufacturing garments.

Apart from labor cost, garment exporters are also concerned with the high power cost and smuggling.

Data from the National Statistics Office (NSO) showed that outbound shipments of garments were valued at $1.573 billion last year, 17.03 percent lower than in 2011.

Textile exports also went down by 7.26 percent year-on-year to $170.362 million in 2012 from a year ago.

As of end-February, earnings from garment shipments fell by 22.96 percent to $244.522 million from a year ago, while revenues from textile exports reached $27.406 million, 4.01 percent lower than in the previous year.

To improve its export performance, the garments industry is pushing for the passage of the Save Our Industries Act, a measure which will allow the duty-free entry of Philippine-made apparel using American fabrics to the US.

The bill which was first filed in the US Congress in 2009 is expected to be reintroduced this year.