Philippines - While workers in Philippines are demanding higher salaries to combat the rising food prices, lawmakers warn that such a move could cause an economic recession.
According to a recent report by AFP, workers in Manila are voicing out for salary increment to meet the rising price of food. One example is the demand of a P80.00 (S$2.57) raised by the Trade Union Congress of the Philippines (TUCP) in Metropolitan Manila. However, there is speculation that the wage board will only allow a rise of about P20.00 (S$0.64) in Manila.
In March, Philippines saw it's highest inflation growth in 10-months at 6.4%, resulting in the increase in the increased price of the country's staple foods. The price of rice has increased to P33.00 (S$1.06) per kg from P25.00 (S$0.80) two months ago.
President Gloria Arroyo has rolled out an agenda to exempt minimum wage workers from income tax. However, this would result in costing the government P900 million (S$28.95million) in lost revenues despite the savings of P12,000 (S$385.5) a year for the worker said Ciriaco Lagunsad, executive director of the National Wages and Productivity Commission.
"There are business sectors that are having difficulty. And if the workers ask for additional wages, they (businesses) could collapse and the workers will be the ones to suffer," said Ciriaco Lagunsad, executive director of the National Wages and Productivity Commission.
The head of the strategic business economics programme of the University of Asia and the Pacific Victor Abola said that his statistical model shows that with every P10-increase in the national minimum wage, inflation will go up by one percentage point.
"Let us not court disaster. A legislated wage increase would do more harm than good," said Sergio Ortiz-Luiz, president of the Employers Confederation of the Philippines (ECOP).
