DUBAI: An increase in the minimum wage could have wider, negative implications that will would impact even those who will not benefit from the additional pay, the Philippines鈥� trade and industry secretary said on Wednesday.
鈥淭he reality is not all [Filipino workers] are wage earners,鈥� trade chief Ramon Lopez commented during an economic briefing at Malaca帽an Palace.
鈥淚f we increase wages, the costs will increase which can pressure prices to go up. And of course, those who will be hit are not only the wage earners, but everyone else who did not benefit from the wage hike. They will also be affected.鈥�
鈥淭he more sustaining solution for wage increases would be more jobs to be created and more investments to come in.鈥�
There had been calls for the government to review current wages because of higher inflation 鈥� due to costlier oil prices and the implementation of a tax law that hit sugar and tobacco product prices 鈥� during recent months. Prices of consumer goods rose 4.6 percent last month, slightly higher than the 4.5 percent recorded in April but lower than the 4.9 percent government forecast.
Some legislators are planning to file bills aimed at increasing minimum wages across the country when Congress 鈥� the country鈥檚 legislative body 鈥� resumes regular sessions on July 23.
鈥淚nflation (in May) was caused by oil prices and a shortage in rice,鈥� Lopez said, while prices of sugar and tobacco products increased because of the higher tariffs imposed on them under the Tax Reform for Acceleration and Inclusion (TRAIN) law which came into force on Jan. 1.
鈥淭he shortage of rice however has been addressed with the government-to-government importation we undertook, and shipments are now being unloaded in various ports around the country to address local supply.鈥�
Lopez, however, did not discount the possibility that regional tripartite wage boards 鈥� which formulate and review policies on regional wages 鈥� could implement additional daily salaries, although such moves must be based on the prevailing economic conditions in the specific regions granting these increases.
鈥淭here can be consideration because of inflation, so if you ask me there could be a minimal adjustment but that should not be more than what is necessary because it would really create a strong pressure on inflation,鈥� he said. 鈥淲hatever inflation is felt in the region that could be a basis for the adjustment.鈥�
President Rodrigo Duterte last month ordered the Department of Labor and Employment to convene regional tripartite wage boards to study the possibility of adjusting minimum wages to mitigate the effects of rising consumer prices, the peso depreciation and the implementation of the TRAIN Law. Duterte also directed trade officials to tighten the monitoring of prices of basic goods and commodities to guard against profiteering.
鈥淏ut if we are successful in maintaining industrial peace, maintaining rule of law, peace and order, no corruption, good business environment, investments would come in and that will drive up wages,鈥� Lopez said. 鈥淲e have to have investments and job-creation activities so that wages and income will go up naturally because of the supply and demand for labor. That is what we should strive for.鈥�