MANILA, Philippines — Raising workers’ wages just on the basis of some legislators asking for it would be dangerous to the country. It should be based on the demand for labor.
Socioeconomic Planning Secretary Arsenio Balisacan, who heads the National Economic and Development Authority (Neda), pointed this out to Rep. France Castro of the Alliance of Concerned Teachers party list on Tuesday at the hearing of the House Committee on Appropriations.
Members of the Development Budget Coordination Committee (DBCC) were invited to the hearing.
Castro wanted to know why the government had not decided to increase wages to stimulate economic activity.
She said wages remained fixed at around P570.
“The purchasing power of our citizens has not increased,” Castro said in Filipino. “What can our economic managers do to raise wages?”
She also asked if financial aid ranging from P1,000 to P2,000 for each of the nine million qualified families would be enough.
“If you want to bring this country to the league of our neighbors, the safest thing to do is to increase wages by way of expanding economic activity — and that means a lot of investments that would have to be made to complement labor. In other words, we’ve got to make the demand for labor [to be] expanding faster, increasing faster than the supply of labor,” Balisacan said.
“So it’s very harmful to the economy in the longer term and even for labor if wages are forced to increase by legislative fiat, rising not because the demand for labor is high compared to the supply of labor, then the whole issue of competitiveness will hurt us,” he said.
Balisacan also warned that if wages were to be increased without more investments and opportunities coming in first, labor would be displaced.
“Now if wages will rise not because of productivity, how can we export, how can our products become competitive in the international market? And if we cannot export, how can we increase the level of economic activity? Where will the labor be employed? So the trick and the Philippine Development Plan and the plan of this administration is to address this very low productivity in agriculture while investing in the right places,” he said.
Over the past few months, several workers’ organizations have been calling for a wage increase to allow low-income families to cope with the rising prices of basic goods with inflation rising rapidly.
Despite projections of a faster economic acceleration for 2023 — possibly a 6.5% growth in the gross domestic product on a year-on-year basis — the Philippines’ 2023 start was marred by higher inflation.
Last Feb. 7, the Philippine Statistics Authority said that the headline inflation rate for January 2023 was at 8.7% — higher than the 8.1% recorded in December 2022.
National statistician Dennis Mapa said the January figure was the fastest since a 9.1% headline inflation rate recorded in November 2008 and was almost thrice as fast as the 3% recorded in January 2022.
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