The Joint Foreign Chamber of the Philippines (JFC) is not in favor of an “across-the-board wage increase” that is being petitioned for workers in Metro Manila.
In a statement on Tuesday, the JFC said that if a minimum wage increase would be granted, it would not yield benefits, but would negatively affect various business sectors in the long run.
“We believe that such measures will have unintended adverse consequences, that in the long run can adversely affect the very sector that they wish to benefit,” the JFC said.
This is in reaction to the separate workers’ petitions filed through the Trade Union Congress of the Philippines to increase by P83 to P85 the daily wages of Metro Manila laborers.
The JFC said that it is not against a minimum wage increase, but was concerned with local wages being competitive since investors tend to “avoid the Philippines in favor of other countries with lower labor costs,” and that the local market is selling “more imported than locally made products.”
“A wage increase at this time could result in lay-offs, especially among MSMEs [micro, small and medium enterprises],” it said.
According to the National Wages and Productivity Commission, the Philippines has the highest minimum wage rates in the Association of Southeast Asian Nations (Asean) with $10.74 a day. On the other hand, Indonesia is $7.46; China, $8.08; Thailand, $9.75; Malaysia, $9.75; Vietnam, $3.15 and Cambodia, $2.03.
While the country has the highest minimum wage compared to Asean countries and China, it also leads in unemployment which stood at 7 percent in 2012.
The chamber said that a sudden surge in labor costs would result in the closing of factories and business establishments, which the country should avoid because the Philippines is attracting foreign companies to relocate their manufacturing units into the country.
It also said that a wage increase will only benefit “6 percent of the total workforce.”
“The key to improving the plight of our workers is to increase their employability and competitiveness. We believe that ultimately, compensation should be tied to productivity as determined by enterprise-level conditions,” the JFC added.