‘Difficult times lie ahead’ for Filipino workers — ILO

In the Asia Pacific, the ILO said growth in real wages would not exceed 1% next year. In 2001-2007, the ILO found that wages in Asia grew by only 1.8%.

Sangheon Lee, coauthor of the report, told BusinessWorld the ILO was concerned over the effect of low wages in Asia amid the global downturn, recalling a painful and slow recovery from the 1997 financial crisis.

“It took about a decade for Asia to recover from that crisis and we see the same thing happening now,” Mr. Lee said.

He said the loss of purchasing power and protection for workers were major concerns for the Philippines. Labor disputes may increase, he added.

To offset this downturn, the ILO said collective CBAs must be given more importance. It noted that in the Philippines, regional wage boards “seem to have supplanted firm- level wage bargaining, and companies now simply wait for the annual wage adjustments...”

Last year, only 15% of workers were covered by such agreements, a similar proportion to other Southeast Asian countries.

“Collective bargaining should be promoted, and social partners should be encouraged to negotiate ways to prevent a further deterioration in the wage share and growth of wage differentials,” the report said.

The Philippines, though, was cited as one of the developing countries which have a focus on CBAs as well as good monitoring.

The report said the increase of workers employed in smaller firms and contractual workers may have had a hand in the decline of CBA coverage.

“The Philippines has a sophisticated system that links wages and [CBAs] but there should be a more dynamic [relationship] between the two,” Mr. Lee said.

Josua Mata of the Alliance of Progressive Labor said the ILO was too upbeat.

“What this shows is that the ILO still expects some growth, but that is far too optimistic for the Philippines,” Mr. Mata said.

He said the government should find ways to not only protect jobs but create jobs as well.

Rene E. Ofreneo of the University of the Philippines School of Labor and Industrial Relations warned that workers’ bargaining power may even be weaker amid a crisis. There could also be a rise in part-time and underemployed workers next year, further driving down wages, he added.

Ciriaco A. Lagunzad, executive director of the National Wages and Productivity Commission, said: “Business could cut down on the number of hours of workers and that is one way where lower wages can be seen.”

Mr. Lagunzad defended minimum-wage setting, saying it was a way for the government to protect workers.

The ILO report also said the pay gap between genders in the Philippines was “still high and closing only very slowly.”

“In the majority of countries, women’s wages represent on average between 70% and 90% of men’s wages...,” it said.