In a statement, the MBC said some of its members and potential investors were more bothered by the process of wage determination, not the amount of wage increase.
They said a wage increase of P125 a day over three years would have minimal effect on inflation.
"The amount of increase is inconsequential to industries that are obviously doing quite well," the MBC said. "However, it may push some industries that are barely breaking even, over the edge. Unfortunately, the industries in the latter category would likely be labor intensive and the result could be massive layoffs."
The group also said the legislated wage increase under House Bill 345 undermines the process of collective bargaining agreement (CBA) and the setting of minimum wage standards by regional wage boards, saying CBAs are the most universal and effective form of negotiating wage increases.
"Labor and management both participate in the CBA process, in contrast to legislation where politicians undermine the price of labor," the MBC said.
"The process of setting minimum wage standards by regional boards is also undermined," the MBC added. "Regional wage boards account for differences in cost of living across the different parts of the country. Highly urbanized regions have higher cost of living and can also afford to pay higher wages."
They said a "one-size fits all wage increase by legislation, will result in some regions becoming uncompetitive and may result in disinvestments in areas that are most starved for investments."
The NEDA has forecast that HB 345 will result in the loss of 700,000 to 1.4 million jobs while the Department of Labor and Employment (DOLE) has predicted that the proposed wage hike will stunt growth by an average of one percent, which the MBC considers a relatively large percentage, since the country’s GDP grows at around 5.5 percent.
The MBC also said a legislated wage hike may result in the loss of competitiveness in certain industries that are highly wage-sensitive: "The minimum daily wage rate in Metro Manila is P350 or $7.11. This is an absolutely higher minimum wage compared to some of our neighbors like Vietnam ($1.25), India ($1.97), Indonesia ($2.64. China ($2.94) and Thailand ($4.87)."
The MBC explained that, in a globalized economy, the Philippines has a niche in a long supply chain: "We import inputs from a long wage country, add value through our labor, then export to a higher wage country that can perform higher value addition through their more highly skilled labor force."
"Adding to the wages beyond our competitive level in the chain, may result in the loss of jobs to a more wage-to-skill competitive country," the MBC said.
In lieu of the legislated wage hike, the MBC supports the implementation of the CBA and the minimum wage standards set by regional wage boards.
The MBC also supports the government’s incentives for training undertaken by the private sector, saying that improving workers skills will improve the demand for labor and wages.
"With a more highly skilled work force, the firm becomes more competitive," the MBC said. "On a macro level, the country can attract more investments because of its skilled work force so jobs increase and the economy grows through investments."
The Philippine Chamber of Commerce and Industry (PCCI) earlier expressed opposition to the legislated wage increase, which the business sector fears will trigger massive layoffs and the closures of some companies. — Patricia Estevez