CEBU CITY, Philippines — Several labor groups in Cebu are pushing for a P150 wage increase.
However, some of the business groups want no adjustments.
On Tuesday, August 20, 2024, labor groups, representatives from various stakeholders including the business sector in Cebu, and members of the Regional Tripartite Wages and Productivity Board here (RTWPB-7) convened for the first of the five public hearings to be conducted for minimum wage adjustment and wage reclassification.
The regional wage board was present to hear the sentiments of the concerned sectors, especially on the existing and prevailing labor conditions that may warrant wage adjustment.
Lawyer Michael Francis Hubahib, who spoke on behalf of the Associated Labor Unions (ALU) in Central Visayas, said they are pushing for an increase of at least P150 primarily because it allows them “to recover the purchasing power [of peso] that we’ve lost during the past years because of the high inflation rates.”
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The Partido Manggagawa (PM) Cebu chapter, who also lobbied for the same amount, said the P33 increase last October 2023 does not even cover half of the value lost in workers’ wages in Central Visayas.
“The gap between the minimum wage and its real value, or the real wage, is evident. The P468 in Cebu is now only worth P383.92,” PM-Cebu said.
PM-Cebu added that they already brought to Congress their P150 proposal “to help workers recover their take-home pay, which has been eroded by the rising prices of goods and services, as well as the review of mechanism and law (RA 6272) that sets the minimum wage in the country.”
The Alyansa sa Mamumuo sa Sugbo also called for the same proposal.
Chambers’ positions
However, the Mandaue Chamber of Commerce and Industry (MCCI), the City of Talisay Chamber of Commerce, Trade, and Industry (CTCCTI); and the Philippine Retailers Association-Cebu (PRA-Cebu), in separate position papers, wanted no adjustments on the existing minimum wage for various reasons.
“While we admit that the business sector and the economy in Cebu are already fully operational and are over the hump after the pandemic and typhoon Odette, things have not really gone back to previous levels,” said MCCI president, Mark Anthony Ynoc, represented by its ex-president Kelie Ko.
Ynoc added that the challenges have even become more intense as there are changes in global landscape and geopolitics that also affected them.
Reviewing minimum wage
Moreover, Ynoc said the increasing inflation rate also increased production input including power, raw materials, and services, and the SMEs (small and medium-sized enterprises) cannot just simply pass on the increased cost of goods to the market primarily because of the competition offered by low-cost imports and smuggled goods.
“While we are open to reviewing the minimum wage, amid the continuing rise in fuel prices and their anticipated impact on the economy, we are worried that smaller enterprises may not be able to afford a pay increase for workers at this time,” Ynoc explained.
He added that the companies who are unable to recover the increased cost of production would have no other choice but to downsize or worse, close shop, or simply go underground to avoid penalties.
Meanwhile, the CTCCTI, who also opposed to the wage adjustment, said that the proposed wage adjustment will “significantly” raise operational costs. Should there be an increase in their operational costs, the SMEs would be compelled to reduce workforce to manage it.
“We urge the Department of Labor and Employment (DOLE) to reconsider these proposals and explore alternative solutions that balance the needs of workers with the economic realities faced by businesses,” the CTCCTI said.
The PRA-Cebu, through its president, Christian Paroan, said they had to “reject the proposed salary increase at this time.”
“Implementing such an increase would be inflationary and detrimental to our business operations, particularly for Micro, Small, and Medium Enterprises (MSMEs). Currently, most of our members are MSMEs, and many have already faced closures during and after the pandemic due to inflationary pressures on their bottom lines. The additional burden of a salary increase could lead to further closures, exacerbating the already challenging business environment,” Paroan said.
For Hotel, Resort and Restaurant Association of Cebu Inc.(HRRACI), “another wage hike coming at the heels of the recently implemented minimum wage adjustments is not the right solution to counter the underlying challenges faced by the wage earners.”
Cebu Chamber prefers to wait for the outcome of P150 proposal
The Cebu Chamber of Commerce and Industry (CCCI), for its part, said “implementing wage increase without addressing the root causes of inflation is a counterproductive strategy.” With this, the CCCI preferred to wait for the outcome of the proposed P150 before the Congress.
At the same time, the Confederation of Philippine Exporters in Cebu and the Philippine Aquapak Industries, Inc. backed the salary hike, while the Mactan Export Processing Zone Chamber of Exporters and Manufacturers favored the wage board’s ruling on the issue.
The next public hearings will be on Aug. 28 in Balamban, Aug. 30 in Bogo City, Sept. 3 in Dumaguete City, and. Sept. 4 in Tagbilaran City.