P100 wage hike to hurt MSMEs more – ECOP

Published February 13, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

Employers believe that granting the proposed P100 daily wage hike will hurt even more the micro, small and medium enterprises (MSMEs),  which are struggling to survive amid the coronavirus pandemic, and can result in further rise in unemployment.

“The P100 wage increase was requested for a number of years. It did not prosper before the pandemic hit, much more now with the coronavirus? The chances are very nil that it will prosper,” Employers Confederation of the Philippines (ECOP) president Sergio Ortiz-Luis Jr. said in Filipino in a radio interview.

Sergio Ortiz-Luis Jr., president of the Employers Confederation of the Philippines

Labor groups have called for P100 daily minimum wage pay for workers nationwide amid rising prices of basic commodities.

Ortiz-Luis said some MSMEs remained closed amid the pandemic, some are still undecided on business reopening, while others adopt rotation of workers schemes.

He added even some large enterprises have started downsizing or have closed.

To prevent closure of more companies, Ortiz-Luis Jr. said the Department of Labor and Employment (DOLE) has allowed employers to negotiate wage reduction with their workers provided these are not below the minimum wage.

He said granting the proposed P100 daily wage hike while other companies are reducing wages can lead to increased unemployment.

Amid this situation, Ortiz-Luis said the MSMEs cannot afford an increase in the minimum wage, while some large enterprises maybe can afford a pay hike.

He stressed that a wage increase especially during this time when the economy is still recovering from the pandemic is “not a good signal to foreign investors.”

Ortiz-Luis, who is also president of Philippine Exporters Confederation Inc. (PHILEXPORT), reiterated the need to further reopen the economy along with reopening mass transportation so more can get hired.

He cited the result of the group’s survey on exporters indicating that one of the reasons they are unable to add workers to report for work is the lack of mass transportation.