P125 pay hike too costly - Noy

MANILA, Philippines - President Benigno Aquino III on Tuesday announced salary hike for state workers, but described the P125-wage hike demand of private sector workers as detrimental to the economy.

Aquino said the proposed P125 across-the-board wage increase is too costly and would lead to layoffs and inflation.

In his labor day speech, Aquino said over half a million workers will lose their jobs if the proposed wage hike, which will cost employers P1.43 trillion, would be approved.

Aquino also said the $10 minimum wage in the country is way higher than in other South East Asian nations. He said minimum wage only costs $2 in Cambodia, $2 to $4 in Vietnam and $3 in Indonesia.

"Kung lalayo pa ang ating agwat sa kanila, sino pa pong dayuhan ang mangangahas na mamuhunan dito sa atin," Aquino said.

Aquino meanwhile said the state workers will receive their fourth tranche of salary hike by June under Salary Standardization Law 3.

P125 wage hike

Budget Secretary Florencio Abad said President Aquino will still "thoroughly study" the P125 wage hike demand by the labor force.

During the Labor Day celebration at the foot of the Chino Roces Bridge (formerly Mendiola), Abad announced that the President will still go through the several demands and recommendations submitted by labor coalition Nagkaisa! to the Palace for executive action.

"Naatasan po kami ng Pangulo na makipagusap sa inyo tungkol sa mga interes, problema at rekomendasyon na gustong ipahayag sa ating gobyerno. Pagaaralan ng Pangulo ang mga ito para gawan ng kaukulang aksyon," Abad told the thousands of workers from various labor unions who trooped to Manila.

Abad said the government has alloted P11.2 billion for the educational programs of all Government Service and Insurance System and Social Security System workers. He also said the forthcoming pay hike of government employees would cost an additional P2.7 billion.

Abad was accompanied by presidential spokesman Edwin Lacierda and presidential political adviser Ronald Llamas when he went to the workers to receive the letter listing the workers' demand to the President.

Aquino also reported that at least 11.1 million jobs were created in 2011, following the entry of manufacturers to the country despite high cost of electricity.

Labor group Trade Union Congress of the Philippines earlier expressed dismay over reports that the Department of Labor and Employment may only grant between P13 and P21 wage hike.

"Ang nangyayari ay nagiging moro-moro na lang ang usapin ng wage increase. That amount is too small. I hope the government would balance its position," said Allan Tanjusay, TUCP spokesperon, in an interview with ABS-CBN News.

The TUCP filed in March a petition seeking a P90-wage increase in Metro Manila and P86-wage hike in Cavite, Laguna, Batangas, Rizal and Quezon.

The group cited escalating prices of fuel, cooking gas and utilities as "supervening conditions" that warrant the salary adjustment.

On Monday, Edwin Lacierda, presidential spokesperson, said the Aquino administration will bring "good news" on Labor Day. Katherine Manalo and Dennis Carcamo