Give the wage boards a chance to work!

Our special guests on our talkshow on Straight from the Sky tonight, we bring you Mrs. Christina Klint, Senior Trade Advisor from the Swedish Import Council and she's with Mr. Fred T. Escalona, Executive Director of PhilExport on the topic of Trading between the Philippines and Sweden. This is one kind of an interview where we can learn much about Sweden and its economy. For instance, while we know that Sweden makes the famous Volvo cars, we learned that a lot of the parts for this vehicle are manufactured elsewhere. Who knows, its wiring harness could very well come from the Mactan Export Processing Zone.

So what kind of business can we do with Sweden? You want to explore the potential European market? What kind of technical regulations or standards that one faces when exporting or importing to Sweden? Then please watch this show on SkyCable's channel 15 at 8:00 p.m.

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With the E-VAT now in various stages of implementation, things are moving very quickly and there is no question that no less than Pres. Gloria Macapagal-Arroyo has suggested a "Legislated Wage increase" a suggestion that immediately drew flak. There is no doubt that business groups do not want to open the "genie" that will allow Congress to legislate wages because if they did that, you will not hear the end of this problem and every Labor Day would bring street marches into the halls of Congress demanding more hikes. It's impossible to return the genie into the bottle.

Add the Communist Party to this volatile equation and that spells for more trouble. If you didn't know, the Communist Party of the Philippines would love nothing better than to demand for Congress to legislate wage hikes so that the Filipino working masses would finally look at the CPP as their "champion" who "pressured" Congress to act on their behalf! The Communists also know too well that if and when Congress legislates too much wages, factories will close left and right creating more trouble as unemployment rises... and then the commies would have the angry minions that would put themselves in political power!

We've already seen the Regional Tripartite Wage Boards looking into this problem... why bring Congress or politicians into this mess? I dare say that Pres. Arroyo wasn't thinking straight when she made the suggestion to legislate a wage increase... especially since the RTWB hasn't gone over these problems yet. She should have given the regional wage boards a chance to crack this problem first before coming out with that suggestion.

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There is no doubt that the E-Vat's implementation would result to hikes, not only in the wages, but also in basic commodities. That means, a lot of businessmen are now caught in the crossroads... should they cut cost by trimming down on expenses... or cutting their labor force, or even go to the other extreme of shutting down operations? Mind you, I have a good friend who had a very successful furniture manufacturing business at the MEPZ. This fellow has since moved his operations to China because the climate for manufacturers are very favorable there as compared to doing business here.

This is something that the Arroyo administration must clearly look into because we are not alone in this globalized world... we have competitors in ASEAN and yes the biggest one is China. Thus you can say that with the implementation of the E-Vat... we are now walking on a tightrope, which could go either way. It could make this country better or worse off! This is a balancing act that Pres. Arroyo has to play and it is a dangerous game!

Because of the call of the times, I know that many companies have already gone into what is called "Business Outsourcing" whereby they shut down their entire accounting department and in turn... those people are given their severance pay, but yet, they can make their own business, an accounting firm and service the same company that they've worked for years.

I know for a fact that PLDT has done this with their linemen, the same thing is happening to the Visayan Electric Company. Well, we just read recently that the Associated Labor Unions plans to stage a strike against VECO allegedly over union busting issues. But is it really union busting if in order to survive, companies like VECO would streamline its workforce and go into business outsourcing? Again, let me point out that we live in interesting times. That means, old habits have to go and change. If businessmen in order to survive are looking for such changes, then I would like to suggest that labor unions too must also learn to adapt to these new business climate. Mind you, it's not only happening in this country!

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For e-mail responses to this article, write to vsbobita@mozcom.com. Bobit Avila's columns can also be accessed through www.thefreeman.com