P200 wage hike to cause layoffs, PH retailers warn

The House of Representatives’ version of a legislated wage hike bill, which increases minimum wage earners’ salaries by P200 per day, has been approved on third and final reading. — INQUIRER.net files

MANILA, Philippines — The country’s largest group of retailers warned that the P200 wage hike bill passed by the House of Representatives could lead to layoffs and cause even more problems.

“This will still have to pass the Senate. Nevertheless, this will cause layoffs in the retail sector especially in the MSME (micro, small and medium enterprises) retailers, which comprise almost 70 percent of retail employment,” Philippine Retailers Association president Roberto Claudio told the Inquirer.

Claudio also cautioned that the proposed wage hike, though aimed at minimum wage earners, would likely create pay distortions across organizations.

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“Its feature that the P200 increase will only apply to those receiving minimum wages will not hold true as it will create salary distortions as you go up in the ladder in the organization. Thereby companies will have to increase salaries throughout the organization,” he said.

Claudio said their group supports the Philippine Chamber of Commerce and Industry’s (PCCI) call to leave wage adjustments to the regional wage boards instead of imposing a nationwide increase.

“Business organizations are behind the appeal of PCCI to the government and Senate to allow the regional wage boards to determine the wages levels appropriate in the different regions of the country,” he said.

The PCCI had earlier warned that a legislated wage hike could undermine the function of Regional Tripartite Wages and Productivity Boards and disproportionately affect MSMEs.

Other business groups

Aside from the PCCI, the head of the Employers Confederation of the Philippines and the Philippine Exporters Confederation Inc. has also voiced concern over the proposed wage hike, warning of its potential negative effects.

The Makati Business Club (MBC) also weighed in, saying the increase could fuel inflation and weaken the country’s competitiveness in the region.

“This wage rise represents 31 percent in Metro Manila, where the existing daily wage is P645. It’s 37 percent to 44 percent in Calabarzon, where the minimum wage ranges from P450 to P540,” the MBC said in a statement.

The group said the focus should be on lowering prices of basic goods, mentioning food in particular.

The MBC insisted that they are not against wage increases per se, acknowledging the argument for wage increases.

“We believe that these should be addressed by the regional wage boards, which take into account the cost of living in the particular area. There is no compelling reason for Congress to bypass these wage boards, as it has in this instance,” the business group said.

The House of Representatives approved on third and final reading on June 3 a bill seeking to increase the daily minimum wage by P200.