Firms' first half results to determine wage hikes

MANILA, Philippines - The government is considering a moratorium on minimum wage increases this year but will wait to see how businesses perform in the first half before endorsing the move. “We want to see what the economic situation is around July before we say that the annual wage increase can push through," Labor Secretary Marianito D. Roque yesterday said. Wage setting in the Philippines is done via regional tripartite boards which by law can order adjustments — on their own volition or based on petitions — once per year, except in case of mitigating circumstances. Last year’s wage round began in May 14 and was kicked off by the Northern Mindanao board. Metro Manila, traditionally the initiator as it is where minimum wages are the highest, followed two days later. “I will wait while the existing wage order matures before we really decide," Mr. Roque said. In the case of Metro Manila, where the minimum wage is P345-382 per day, this would mean a decision after three months. If last year’s date of effectivity is considered, then June would be the target. Industry groups have asked the government to consider a moratorium on new wage orders during two recent multi-sectoral summits called by the Labor department and Malacanang to discuss the country’s employment situation. The Labor department has agreed to study the proposal. President Gloria Macapagal Arroyo has said the review could take up to August, telling the last labor summit staged earlier this week that it would take two months from July. Employer’s Confederation of the Philippines director-general Vicente R. Leogardo, Jr. said minimum wage increases at this time were not advisable because of the current economic situation. “We are in the midst of a recession and counting job losses, and besides, prices are declining like that of petroleum," he said. Organized labor, which last year pinned wage petitions on skyrocketing fuel prices, is split on the issue. Trade Union Congress of the Philippines secretary-general Ernesto F. Herrera said a moratorium “is logical and understandable because our primary concern is to save jobs." He hopes, however, that the economic situation will improve to allow for new wage orders in the second semester. On the other hand, Alliance for Progressive Labor secretary-general Josua Mata denounced the planned moratorium. “That is ill-advised. The government should not entertain any moratorium on wages because prices are still going up. If there was a moratorium on prices maybe then we can consider it," he said in a separate interview. The spotlight has been turned on job losses caused by the global downturn as a number of multinationals have pulled out and companies forced to retrench or impose reduced work hours to stay afloat. Some 40,000 workers had been laid off as of Friday, the Labor department said. The Philippines also fears massive job losses among the millions of overseas Filipino workers (OFWs) but Mr. Roque said there were signs that retrenchments were slowing down. The labor chief said that as of Friday, 5,400 OFWs had lost their jobs and returned to the Philippines. Of that number, 3,400 came from Taiwan. “Really the displacements of OFWs seem to be slowing down. There’s only a few that went home as of Friday," Mr. Roque said. The Labor department attributed the slowdown to countries needing to fill their foreign labor quotas. - Emilia Narni J. David, BusinessWorld