TANAY, Rizal — Sen. Jinggoy Estrada, Senate labor panel chairperson, reiterated Friday that while he agrees that the minimum wage needs to be hiked, there is still a need to "strike a balance" between workers and businesses.
The minimum wage varies across the regions, ranging from P570 a day in Metro Manila to P340 a day in the Bangsamoro Autonomous Region in Muslim Mindanao. The wage varies because of supposed differences in the cost of living and to encourage investment in areas outside the capital where labor cost is lower.
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Estrada said that he is worried that legislating a P150 wage hike, as proposed by Senate President Juan Miguel Zubiri, may lead to business closures and even economic collapse.
He said that micro, small and medium enterprises — which account for nearly all businesses in the Philippines — were still recovering from the COVID-19 pandemic that wrought havoc on the economy.
"So, I think we really have to strike a balance so workers and employers are not inconvenienced," Estrada told reporters here at his property in Rizal.
But, according to campaigners for wage increases and dignity of work like Iggy Sandrino of the Ecumenical Institute for Labor Education and Research, the state of wages in the Philippines has historically been imbalanced in favor of workers. He said that while productivity has generally increased, wages have remained low.
"They have been telling us for so long that businesses might close down if you increase wages, but the government has the capacity to implement policies to address that," he said in an interview on Philstar.com live show "Why Naman?" on Thursday.
Wage subsidies, other incentives for employers
He said the government can consider wage subsidies to help MSMEs pay the increased wages of their workers. National Minimum Wage Bill filed at the House of Representatives by members of the Makabayan bloc proposes a wage subsidies and tax breaks and other incentives to help businesses pay a national minimum wage of P750.
He also addressed fears that a wage increase would be inflationary by saying that there has not been a general wage increase in the Philippines since the 1980s but this has not stopped inflation, which was at 7.6% year-on-year in March.
"We have not even done the wage increase and we are already so scared," he said, adding that that fear has translated to "the lives of workers — millions of workers who are not paid enough for their daily needs."
Sandrino said that higher wages, which would increase purchasing power and put the money back into the economy.
Estrada said Friday that his committee will conduct a hearing on Zubiri’s measure when Congress resumes session in two weeks.
Wage hike petitions have been filed in almost all regions, while proposals for a legislated wage increase ranging from P150 to P750 have been filed both in the House of Representatives and the Senate.
Legislation to end contractual labor, a campaign promise in the 2016 polls, was vetoed during the Duterte administration because it was seen "to [destroy] the delicate balance and [would] place capital and management at an impossibly difficult predicament with adverse consequences to the Filipino workers in the long-term."