The Philippines need to sustain the current downtrend in joblessness, according to the Employers Confederation of the Philippines (ECOP).
ECOP president Edgardo G. Lacson told reporters that the current low (below 7 percent) unemployment rate will be tested after the holiday season when jobs are less abundant.
“The jobless rate of 6.8 percent is welcome but growth as of the third quarter is very low at 5.3 percent and the target of 7 percent may not be hit,” he said.
Employment is largely being provided by the BPO (business process outsourcing) companies, overseas jobs and the retail sector, Lacson said.
“Manufacturing has improved a little but the government needs to make the Philippines more attractive to catch the outflow of manufacturers leaving China due to high wages,” Lacson said. He said locators are moving to Myanmar and Cambodia and the Philippines ranks low in the list.
Lacson said that the challenges that the government needs to address immediately are the high cost and stability in the supply of electricity.
“I hope the government will revisit the mining policy. Mining investments dried up because of the change in the policy. Foreign mining investors currently operating here are just trying to make do with the difficult situation, he said. “In the meantime, investors are holding back because they don’t know what policies will cover them,” he added.
There is call from labor sectors to increase the living wage in the country.
Lacson said they want the minimum wage to be equal to the living wage: P1,200 per day is their request for the next five years. Currently the Philippines’ minimum wage is P436 per day. P1200 per day will mean a 300 per year increase.
“They need to redefine the law for the living wage to be equal to the minimum wage. The living wage is based on the consumer price index. Minimum wage is only the entry level.
“For example if you are a new graduate, or a factory worker, why should I give you P1,200 per day? “ he asked.
“Wages should be driven by the market. Philippine’s minimum wage is like one size fits all. It should be market driven, productivity based, at the enterprise level. That will be the ideal wage policy,” he said.
Lacson even cited Myanmar with minimum of $1.50 a day versus Philippines almost $11 ($10+). “We are second to Malaysia. The countries offering higher wages than us are Malaysia and Singapore.
“You have to compute the distortion effect of the minimum wage setting. The distortion is an even bigger impact of the minimum wage increase because once you raise the salary of rank and file, management needs to follow,” he said.
Lacson also expressed his concern regarding the five-day special holidays for the visit of Pope Francis even as he asked the government to at least manage traffic so that it will not disturb the economic activities.
“The problem with a five-day holiday, is that 5,000 containers will not move for five days at the country’s ports,” Lacson said.
“ There is a steep price to pay if we have too many holidays. Starting December 24, we’ll have 12 days holiday including weekend,” he said.
“What will happen to the port congestion? It will be congested some more. The last report I received is that there are 16,000 containers idle inside the port,” Lacson added.
The long holidays also punish those who are working on a No Work, No Pay basis what will happen o them? If I am the employer, why would I ask you to report for work when I have to double the pay?
“It’s hard to count the number of this kind of employees, most of them are in SMEs. I’d hazard a guess that they are about two to three million in the export and manufacturing industries.
“Declaring a holiday for the papal visit is an overkill,” he said.