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Filipino labor groups slam ‘meager’ wage rise

40-peso increase could create 'second-round effects' on inflation, economist warns
Filipino workers with their family members join a march in the capital Manila to call for a minimum wage rise

Filipino workers with their family members join a march in the capital Manila to call for a minimum wage rise. (Photo: Kilusang Mayo Uno)

Published: July 04, 2023 10:21 AM GMT

Filipino labor groups have slammed the government for what they called a “meager” rise in the daily minimum wage despite staggering inflation in the country.

The Nagkaisa (United) labor coalition, the country’s leading labor group, issued a statement on July 3 saying the Labor Department’s increase of the daily wage from 570 pesos (US$10) to 610 pesos (US$11) in the non-agriculture private sector, was not enough.

“While we recognize this development, the sentiment of disappointment is palpable among many of our workers. The increment falls significantly short of the more than 100 pesos ... that our labor force had been anticipating,” the group said.

It claimed the increase failed to reflect the escalating cost of living.

“The 40-peso wage increase is a start … but we remain steadfast and committed to advocating for a genuine living wage for all Filipino workers,” it added.

Another labor group, Kilusang Mayo Uno, (KMU or May First Movement) marched on the capital Manila and vowed to continue their fight until the authorities accepted their proposal for a daily minimum wage of 1,100 pesos.

“The 40 peso increase is a pittance. It’s too far from the living wage required by law for workers to have a comfortable life. They [labor authorities] gave an increase for the sake of having one but it’s not a living wage or salary,” KMU Metro Manila chairperson Jose Nicolas told UCA News.

Nicolas said it was an insult to workers who have waited for years to get an extra 40-pesos.

“It’s insulting, really.… It’s too small given the prices of commodities. The price of gasoline goes up almost every week,” Nicolas added.

Last year, the government increased the wage by 33 pesos to make the daily minimum wage 570 pesos. Workers and labor groups then said that was nothing compared to soaring inflation.

Workers have accepted the latest wage rise half-heartedly. 

“An increase is still an increase. Forty pesos is better than nothing at all. It could still cover my transportation cost to work and save that amount to buy a few kilos of rice,” Romulo Gomez, a school janitor in Quezon City, told UCA News.

Gomez, a father of two, rides a bicycle to work. He said his daily wage of 570 pesos can barely cover rent and food expenses.

He said the wage increase is not significant, but it can still pay for the education of his two children.

Computer technician Alexander Carvajal blasted the administration of President Ferdinand Marcos, Jr. for making what he said were false promises to improve labor conditions and tackle inflation.

“During his election campaign, he promised to sell rice at 20 pesos per kilo. He said the minimum wage would be increased to improve the conditions of workers. Now, we have a wage rise of 40 pesos. We have been duped,” Carvajal told UCA News.

He said that he could make extra by doing part-time jobs during weekends, but that stopped when the Covid-19 pandemic struck.

“I do not even have enough money when someone in the family gets sick. When my wife had an appendectomy two years ago, I borrowed cash from loan sharks,” he told UCA News.

Bishop Gerardo Alminaza of San Carlos, chairman of the Church-People Workers Solidarity Movement, also criticized the wage rise as “insufficient.”

“The stingy increase is a way below the Php 170 increase urgently needed by workers to recover the real value of wages,” Alminaza said in a statement.

Officials from the Labor Department did not respond to UCA News when contacted for comments.

However, economist Michael Ricafort said the wage hike could create 'second-round effects' on inflation.

“Corporations would just increase the prices of goods and services to mitigate production costs. They could just spread their wage increase cost in the prices of goods. So, this adds to the inflation that you will not even notice,” Ricafort, chief economist of Rizal Banking Corp., told UCA News.

Inflation in the Philippines reached a 14-year high of 8.7 percent in January, according to the Philippine Statistics Authority.

The rate had eased to 6.1 percent in May but was still higher than the pre-pandemic level of about 2.3 percent.

About 18.1 percent or almost 20 million Filipinos lived in poverty in 2021, the World Bank reported last November.

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