‘P100 wage hike no key to better life’

INCREASING the minimum wage by P100 will not deliver a better quality of life for Filipinos, the umbrella group of employers said Thursday.

Employers Confederation of the Philippines (ECOP) vice president Ferdinand “Perry” Ferrer said should bills calling for a legislated minimum wage hike be enacted, only a very small number of the working population in the Philippines will benefit.

“If there are 50 million working Filipinos today, the wage hike will only address 4 million or 5 million and that is very small percentage,” Ferrer said during an interview with Maria Liavel “Lia” Badillo-Crisostomo for “PrimeTimes,” a program that streams every Friday on manilatimes.net and The Manila Times social media platforms.

The impact, he said, will instead be felt significantly by the entire Philippine business community and even consumers through the spike in the prices of commodities.

Ferrer said the P100 wage increase “is not really just P100.” “For the employer, it’s actually P135 to P138,” he said, because in addition to the wage increase, there are the mandatory government benefits of 19 percent, which brings the P100 increase to P119.

In addition to the government-mandated benefits, most companies add retirement and other benefits that range from 15 percent to as high as 20 percent.

“In reality, the P100 minimum wage increase would hit a company really hard. This is where the difference is,” Ferrer said.

He said if a company has an employee base of 15,000 that would translate to P670 million additional costs per year.

Ferrer noted that after the pandemic, the country saw increases in the cost of basic services such as electricity, logistics and supply chain costs.

“Coupled with that is the uncertainty in the market as most are not back to where they were pre-pandemic. [For example], the manufacturing companies are still way behind than where they used to be,” he said.

With the increased costs, and in the past year employers already

agreed with the Regional Tripartite Wage Board on an increase in wages, “there is now a heavy cost of doing business,” Ferrer said.

“So definitely the cost will be passed on to the consumers,” he said.

Some small and medium businesses will also be forced to reduce

their manpower “because they cannot absorb that increased cost.”

Ferrer said the reason people are clamoring for an increase in wages is the purchasing power of the peso has decreased.

“That is where we should focus so that all Filipinos benefit,” he said.