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By Mynardo Macaraig
MANILA: Already struggling to
make ends meet, millions of ordinary Filipinos living on the minimum
wage are seeking a pay increase just to keep up with the rising cost
of food.
Workers such as Manila office
messenger Arthur Manibale who earns just P362 (8.64 dollars) a day
says he is just keeping his head above water financially.
He no longer buys new clothes, is
sometimes forced to borrow from friends and has largely given up
eating meat because he can no longer afford it.
But one thing he cannot do
without is rice, the national staple.
“That is my top priority. I
must always have rice. I can save on other things,” he says.
The rising price of
food—especially rice, for which the cheapest variety has gone up
to P33 (78 US cents) a kilo (2.2 pounds) from P25 two months
ago—has made things harder for workers like Manibale and has
forced the government to consider increasing the minimum wage to
ease the pain.
If it does so the government
knows it will contribute to inflation, which in March stood at a
20-month high at 6.4 percent, and will bring down growth just when
the Philippine economy was showing signs of improving.
The sight of long lines of people
waiting for hours to buy subsidized rice has exposed the economy’s
vulnerabilities, despite growth of 7.3 percent last year, the
highest in three decades.
“There are business sectors
that are having difficulty. And if the workers ask for additional
wages, they [businesses] could collapse and the workers will be the
ones to suffer,” said Ciriaco Lagunsad, executive director of the
National Wages and Productivity Commission.
Even conservative businessmen
acknowledge the need for pay increases in the face of rising fuel,
rice and flour prices. But they are against a legislated wage hike
that would force them to raise salaries across the board.
Unions are demanding salary
increases but are also aware that the resulting inflation could
erase whatever gains higher wages might bring.
President Gloria Arroyo is said
to be opposed to a legislated wage hike and instead wants any
increase to be negotiated through the country’s regional “wage
boards” which are made up of representatives from business, unions
and government.
But there is political pressure
for Congress to impose a wage hike, particularly from the opposition
in the legislature which is eager to seize any opportunity to
upstage Arroyo.
In highly-urbanized Metropolitan
Manila, where most of the country’s large companies are based, the
minimum wage set by the board is P362 a day.
The Trade Union Congress of the
Philippines (TUCP), the country’s largest labor federation, is
seeking an P80 raise in Metropolitan Manila.
Alex Aguilar, spokesman of the
TUCP, acknowledges that the wage boards do “balance the interests
of the general public.”
“When it comes to wages, unions
can be over-aggressive while employers are against any increase.
Government is there to balance the issue,” he said.
There is speculation the wage
board will only allow an increase of about P20 in Manila.
Gwen Gailo, a records assistant
and minimum wage employee, says “a small minimum wage increase
would be meaningless. The prices would just go up.”
Business groups are staunchly
opposed to a legislated minimum wage increase.
“Let us not court disaster. A
legislated wage increase would do more harm than good,” said
Sergio Ortiz-Luiz, president of the Employers Confederation of the
Philippines (ECOP).
“If lawmakers give in to
populist demand for a legislated wage hike, many businesses will
have no choice but to trim down their workforce,” he said.
Victor Abola, head of the
strategic business economics program of the University of Asia and
the Pacific, says his statistical model shows that with every P10
increase in the national minimum wage, inflation will go up by one
percentage point.
Higher inflation in turn will
bring down economic growth, although he will not specify by how
much.
Lagunsad, whose National Wages
and Productivity Commission oversees the wage boards, said the
government is trying to find ways to further help workers without
raising inflation.
Arroyo has already announced
plans to exempt minimum wage workers from income tax.
Such an exemption could save a
minimum wage worker some P12,000 a year while costing the government
some P900 million in lost revenues, said Lagunsad.
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