Increasing workers' wages can be "harmful" if there's no increase in economic activity.
Thus, said National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan during a briefing with the House Committee on Appropriations Tuesday, Feb. 28.
During the interpellation of House Deputy Minority Leader and ACT Teachers Party-list Rep. France Castro, she asked the attending Development Budget Coordination Committee (DBCC) members if the government had any plans to carry out a wage increase amid the continued fast inflation.
“It's very harmful to the economy in the longer term, even for labor, if wages are forced to increased by legislative fiat, not wages rising because the demand for labor is high compared to the supply of labor," Balisacan said.
"Then the whole issue of competitiveness will hurt us," warned the NEDA chief.
According to Balisacan, the safest route to facilitating wage hikes is to increase economic activity in the country and then watch the demand trickle down to labor.
“The safest thing to do to increase wages by way of expanding economic activity. And that means a lot of investments, a lot of investments to be made to complement labor," he said.
"In other words," Balisacan continued, "We have got to make the demand for labor expanding faster, increasing faster than the supply of labor."
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Balisacan further noted that the lack of productivity will weaken the country's ability to export and hurt the labor sector general.
The DBCC--of which NEDA's Balisacan is part of--ID composed of the country’s top economic managers.