'P125 legislated wage hike for workers too costly for employers'

MANILA, Philippines - President Aquino thumbed down yesterday proposals for a P125 legislated wage hike, saying it would be too costly for employers vis-à-vis the economy.

Aquino though ordered the Regional Tripartite Wages and Productivity Board to expedite rulings on petitions for salary increase.

Aquino said he was not closing doors to discuss the issue of contractualization to see how the government could help the workers, who were asking for security of tenure that would also entail benefits and privileges.

Sonny Matula, president of the Federation of Free Workers (FFW), read the workers’ demands.

Aquino, however, stressed he had to balance all interests, especially since 1.8 million employees were expected to benefit from the scrapping of contractualization while 10.3 million would lose their jobs.

Aquino said he would like to be honest with the workers, since employers could not possibly recover the costs of granting such a wage hike that would amount to P1.43 trillion when the country’s total economy only stood at P8 trillion to P9 trillion.

He said this would also lead to inflation – in terms of goods and services – or cost cutting through laying off of workers.

The President stressed up to 527,000 people could lose their jobs if the P125 legislated wage hike would be adopted.

In the current setup, Aquino said the Philippines’ $9 to $10 minimum wage was quite high compared to Cambodia’s $2, Vietnam’s $2.24 to $3.21 and Indonesia’s $3.05 to $5.27.

“If we will go farther from them, who among foreign investors will take a risk and invest here? Because in Cambodia, it’s $2, here it’s $9. It might delay our economy’s growth even more,” he said.

Aquino said prices of basic commodities had been stable despite the spike in oil prices and that salaries here increased 5.44 percent in 2011 while inflation remained at 4.8 percent.

He said he asked the regional wage boards to speed up consultations to determine how much should be the salary increase for private workers. 

Facing the protesters

Aquino tasked Budget Secretary Florencio Abad, presidential spokesman Edwin Lacierda and Presidential Political Adviser Ronald Llamas to face the rallyists who went to Chino Roces Bridge (formerly Mendiola) near Malacañang to discuss his plans and assure them that their concerns were being addressed.

Abad told thousands of protesters that the President would still go through the several demands and recommendations submitted by labor coalition Nagkaisa! to Malacañang for executive action.

“The President asked us to talk to you about your interests, problems and recommendations that you wanted to air to the government. The President will study all these and the necessary actions,” Abad said.

Militant labor organizations converged in various parts of Metro Manila before marching to Mendiola where Aquino was supposed to meet with representatives from various labor groups.

Police said some 8,000 people turned up at the rally in Mendiola but militant groups led by the Kilusang Mayo Uno (KMU) claimed that as many as 20,000 attended.

The rallies were generally peaceful except for a report that a high school student photographer was beaten up by protesters who mistook him for a government agent.

The Philippine National Police (PNP) said no untoward incidents took place during the Labor Day celebration in other parts of the country. 

The problem of subcontracting

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

He said House Bill 4853 addressing the issue of subcontracting would have to be carefully studied.

“Is this a solution or an additional problem for us to carry? We are not closing our minds on this but maybe the bill can be amended so we will all get to where we want to. What we need is careful evaluation of the whole situation so I tasked the Tripartite Industrial Peace Council (TIPC) to come up with a consensus to widen the consultations on this issue,” Aquino said.

The President said he would like to attract more long-term investments and for the Technical Education and Skills Development Authority (TESDA) to find out the needs of the various industries so students’ courses would match up.

He said he wanted to end the “tragedy” of enrolling in courses that would have no available jobs after graduation.

Aquino said he allotted more funds for employment facilitation service as well as job market information service to help fill the 100,000 vacancies every month with good salaries.

He added that P1.1 billion had been allotted for the Training for Work Scholarship Program that would train the youth for information technology-business process outsourcing (IT-BPO), construction, electronics, tourism and agriculture.

Aquino announced Labor Secretary Rosalinda Baldoz issued a department order (DO 18-A) stopping the abusive practice of renewing contracts after every five months – the so-called 555 – so companies would be able to save on costs in paying workers’ benefits.

He said there were also additional funds for labor inspectors to ensure compliance with DO 18-A. From 224, he said there would be 372 more inspectors or a total of 596.

Aquino said the inspectors would be highly trained and given modern technology to carry out their task.

“As regards technology, we might be able to give some kind of an iPad, the notebooks where the templates (are ready) so they can record and transmit everything to DOLE (Department of Labor and Employment) central office easily, whatever it is they discovered,” Aquino said.

“This will speed the process of proving whether an offense was committed or not,” he said.

Aquino said he would endeavor to maintain the number of jobs available, create more, improve the job skills and knowledge of Filipinos and implement labor laws to protect the workers.

The overseas Filipino workers from the Middle East who lost their jobs were reintegrated and given training for new sources of livelihood, he said.

Aquino said 21,500 nurses were also given jobs under the Registered Nurses for Health Enhancement and Local Service (RNHeals) Program.

He said it would be better to continue discussing various labor issues rather than simply make noise, try to earn brownie points or come out with a slogan for sound bites. – Aurea Calica, Sandy Araneta, Rey Galupo, Mike Frialde, Non Alquitran, Cecille Suerte Felipe