TRAIN erodes purchasing power; minimum wage earners, BPOs hit

The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said yesterday that minimum wage earners and informal sector workers fell deeper into poverty due to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law with an erosion of their purchasing power to about six percent.

“We noticed the erosion of wage’s purchasing power move quickly downwards by 6% in just a matter of two months from January to February upon the effectivity of TRAIN,” said Alan Tanjusay, spokesperson of

ALU-TUCP.

According to the labor group, as of March 1, 2018, the total purchasing power of workers for a month fell to P8,575.

“However, according to the Philippine Statistics Authority (PSA), the published standard amount needed by a family of five to survive within poverty line in 2015 is 19,064,” said Tanjusay.

He said this extraordinary devaluation of monthly salary is significant to the informal sector workers earning less than 112,000 a month and the minimum wage earners receiving less than the same amount.

The group cited the monitoring of prevailing prices by the Bangko Sentral ng Pilipinas (BSP) and the National Wages and Productivity Commission (NWPC) released on February 9, 2018 , showing the real value or the buying power of the country’s 17 regions total average daily nominal minimum wage of 1329.35 is now only 1210 a day.

In Metro Manila, the country’s highest minimum wage, the buying power of 1512 daily minimum pay fell to 1357.29. On the other hand, the real value or purchasing power of the country’s lowest minimum pay of 1265 a day in the Autonomous Region in Muslim Mindanao (ARMM) is 1152.12 a day.

And with the inflation rate hitting 3.9 % by the end of February, 2018, the ALUTUCP expects it to rise by the end of the month in light of impending increases in the cost of electricity, rice, fish, sardines, vegetables, condiments and prices of gasoline.

“We urge government’s immediate and quality response to save and prevent these workers, who help build our economy and who are producers of goods and services to make our economy competitive, from falling through the cracks,” Tanjusay said.

Earlier, the ALU-TUCP proposed to President Duterte an amelioration program called Labor Empowerment and Assistance Program (LEAP) wherein minimum wage earners will receive monthly a 1500 worth of grocery items to help the workers cope with the rising cost of living caused by TRAIN.

The group will meet with the president on the proposed 1500 government monthly subsidy on March 22.

BPO hearing Meanwhile, the Senate Committee on Science and Technology will again look into the threats hounding the Business Process Outsourcing (BPO) sector as a result of the TRAIN law.

Senator Paolo “Bam” Aquino IV said that apart from threats of reduced employment opportunities due to Artificial Intelligence (AI), the BPO industry is likewise concerned over the implementation of the TRAIN law on them after Duterte’s decision to veto a special tax rate provision for them under the law.

Aquino said there have been reports that the BPO sector may need to slash their workforce or set aside expansion plans in the Philippines due to the tax reform program.

“The BPO sector is a major source of livelihood for Filipino families. We cannot afford to give away job security and job opportunities, especially with the rising prices of goods,” said Aquino, who chairs the said committee.

Aquino said he received information that several BPOs are planning to relocate, abort expansion, or re-shore workers due to the effects of the TRAIN Law.

The senator pointed out that when the panel first conducted the hearing last year, AI emerged as the main threat to our BPO industry.

“Now, we saw the need to include the government tax reform program as it is also taking a toll on the sector,” he said.