‘BAD FOR BUSINESS’: Biz club nixes pay hike in W. Visayas

Leo Solinap photo

By Francis Allan L. Angelo

A major business organization in Iloilo thumbed down the looming wage increase in Western Visayas.

But unlike the labor sector which sought higher increases, the Iloilo Business Club (IBC) said the pay hikes ranging from Php55 to Php110 on top of the current rates is ill-timed.

On May 13, 2022, the Regional Tripartite Wages and Productivity Board-VI (RTWPB-VI) signed Wage Order No. RBVI-26 which set the new pay rates in the region.

The new order would increase wages for non-agricultural employees by P55, from P395 to P450 for employers with more than 10 workers; and P110, from P310 to P420, for employers with 10 workers or less.

For workers in the agricultural sector, they will get a P95-increase, from P315 to P410.

But these increases must be approved by the National Wages and Productivity Commission (NWPC) first and will only take effect 15 days after the new wage order is published in a newspaper of general circulation within Western Visayas.

In a statement coursed through its executive director, Atty. Eunice V. Guadalope, the IBC said the wage increase will stunt efforts of the business community to recover from the COVID-19 pandemic.

“This meant an increase by 13.92% to 35%, which is not only very ill-timed, but it blatantly disregards the economic realities being faced by the business community in the province and city of Iloilo, especially since our local businesses are just starting to recover from the effects of the pandemic. Also alarming is the increase of P95 for the minimum wage of agricultural workers which meant an increase by 30%,” according to the IBC statement.

The business group noted that the wage hike will severely hit micro, small and medium enterprises (MSMEs).

“This might derail the economic recovery of Region VI which will ultimately hurt all of us, from the employers to the employees and the public. By imposing the Php110 increase on private establishments with ten (10) and less workers, they may be forced to suspend operations, lay off their workers or even shut down their doors because it would be too much for them.”

IBC added that the new minimum wage hikes for the region are even higher than Metro Manila or the National Capital Region, which only imposed a Php33 increase.

“The IBC calls on RTWPB-VI to take a second look at the financial realities of the region and to reconsider the impact their decision would bring on the local economy here in Region VI,” it added.

The new wage order stemmed from the petition filed by FISHTA Union of Employees for Reforms through Solidarity Actions (FUERSA-SUPER) which sought a Php750 across-the-board minimum wage for Western Visayas.

FUERSA-SUPER’s petition would have resulted in increases ranging from Php 355 to P440, or almost 90% to 142% pay hikes.

But the regional wage board tempered the increase to Php55 to Php110, depending on the size of the businesses.

In a position paper presented during the hearing on FUERSA-SUPER’s petition in April 2022, IBC nixed any increase on the minimum wage citing efforts of businesses to rebound from the effects of the pandemic which halted commerce for more than two years.

But in case of an upward adjustment, the IBC proposed a 3% increase on the old pay structure.

Earlier, labor group Partido Manggagawa (PM) opposed the call of employers for exemption and deferment of the minimum wage hikes for workers in the National Capital Region and Western Visayas.

PM had earlier called for a P100 legislated wage hike.

The group averred that even small businesses can afford to give their workers a pay increase which will stimulate the economy.

The group pointed out that a MSME with 10 workers, will only incur an additional P330 in daily wage costs or P8,580 in monthly labor expenses which translates to a mere 0.3% of its P3 million asset size.