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Kristine L. Alave
Philippine Daily Inquirer

MANILA, Philippines—A wage increase next year is unlikely as pressures on the pockets of workers appear to be easing, Labor Secretary Marianito Roque said.

In an interview recently, Roque said there will be a review of the minimum wage in July or August, but an increase is not forthcoming.

“Don’t bet on it,” he said. “The indicators are going down. Fares were rolled back, fuel and liquefied petroleum gas prices have gone down,” he added.

This year, the government implemented a P20 minimum wage increase in response to a clamor from labor organizations. Workers said they were hard-pressed in making ends meet because of record-high inflation and fare hikes.

Because of the financial squeeze that has affected many export-oriented companies in the Philippines, many workers will see their extra pay shrink next year, Roque said.

Despite the cuts in pay, workers are still better off this year compared to last year, Roque said.

“We removed the tax on minimum wage earners. So they have an extra P1,000 every month, even though there’s no overtime pay,” he said.

The labor official earlier said workers in the garment, electronic and automotive sectors would feel the heat of the crisis until 2010.

Recently, labor groups in export zones in Cavite and Cebu provinces reported that electronic firms and garment factories in the area had cut down on workers and factory hours because demand from their traditional and biggest markets, the United States and Europe, had slowed down.

The US and Europe have been hard hit by the financial credit crunch that has spread all over the world.

Roque noted that the Labor department is conducting a survey of companies in financial danger, hopefully to mitigate the adverse effects on the workers.

Marty Go
ABS-CBN News Negros

A sugar cane worker in Negros Occidental

The Department of Labor and Employment (DOLE) has approved a P15 hike in the daily salary of minimum wage earners in Western Visayas as it issued Wage Order Number 17.

DOLE Regional Director Aida Estabillo said that after days of deliberation the Regional Tripartite Wages and Productivity Board (RTWPB) has finally agreed on the amount that is set to be added on the basic salary of laborers in the region.

The wage increase is set to be implemented starting December 25.

“This additional wage increase will be on all categories like workers who are being paid P235 will now be receiving P250 and those earning P193 will now be paid P208,” said Estabillo.

RTWPB Labor Representative Wennie Sancho thanked the board for considering the pay hike in time for the holidays.

“Even though it’s quite low, nevertheless, this is a nice gift to our workers for the Christmas season. This could help them in the coming year, when our country is expected to experience the impact of the global financial crisis,” said Sancho.

The labor sector has originally asked for a P40 to P50 increase on the daily minimum wage but the RTWPB only granted them an additional P15.

Darwin G. Amojelar
Manila Times

A “significant” gap in economic output for nearly two decades between Metro Manila and the low-income regions worsened poverty incidence in the country, a government study said Monday.

“The unequal distribution of the level of regional economic activity in the country has been apparent through the years, as majority of the economic output is concentrated in NCR [National Capital Region, or Metro Manila] and the two adjacent regions of Central Luzon and Southern Tagalog,” Romulo Virola, secretary-general of the National Statistical Coordination Board said.

These three regions, out of 17, produce about 53 percent of the total national output or gross domestic product (GDP). GDP refers to the total value of goods and services produced in a country in a year.

Virola said the per capital gross regional domestic product, or GRDP, of the 17 regions from 1988 to 2007 “clearly reveals the persistence of a significant output gap across time between the NCR and the rest of the regions, and even relative to the national per capita GDP.”

Per capita GRDP measures the level of economic development of a region in a year.

“NCR remains as the most well-off region and outperforms the national economy by a big margin,” Virola said, adding that the region has the biggest average per capita gross regional domestic product of P29,647.829 over 1988 to 2007.

Metro Manila’s per capita gross regional domestic product is 139.3 percent higher than the national average of P12,390.22. Central Luzon’s per capita gross regional domestic product is P10,926.93 and Southern Tagalog, P13,086.12.

The poverty incidence in Metro Manila in 2006 was only 10.4 percent. In Central Luzon, it was 20.70 percent and in Southern Tagalog, 20.90 percent.

The Autonomous Region in Muslim Mindanao (ARMM) posted the lowest per capita output among the regions with P3,601.97, followed by Eastern Visayas, P5,826.18; Bicol, P5,641.84; and Caraga, P6,012.13.

These regions also posted the highest poverty incidence: ARMM, 62 percent; Caraga, 53 percent; Bicol, 51 percent; and Eastern Visayas, 48.50 percent.

Unlikely convergence

“The growth rates of per capita GRDP of the regions and of the national per capita GDP suggest fluctuations that prevent convergence toward a common path in the near future [to have sustained income growth],” Virola said.

Economic convergence occurs when this disparity disappears and the endpoint is equality of per capita GRDP across regions.

“The unlikely convergence of the regions certainly calls for a sound review of existing regional economic policies and for the implementation of strategies to achieve the goal of economic growth that is not only sustainable but also equitable,” Virola said.

Currently, the overall economic progress of the regions, as measured by per capita gross regional domestic product, suggests “lack of convergence, as the paths of [their] per capita GRDP do not indicate that their endpoints will meet at some point in the near future.”

Virola said only the Cordillera Administrative Region, with per capita gross regional domestic product of P14,756.93 and Cavite-Laguna-Batangas-Rizal and Quezon have some chances of catching up with Metro Manila.

“The rest of the regions follows a path that is still far too below the NCR path,” he added.

Virola noted that a steady long-term growth in per capita output of an economy would signify relative improvement in living standards and attainment of economic growth.

Mayen Jaymalin
Philippine Star

Workers nationwide won’t accept nothing less than a full-year tax exemption.

The country’s largest labor group sought yesterday the nullification of the guidelines allowing only a six-month tax exemption for the estimated 1.5 million minimum wage earners nationwide.

In a 17-page petition for certiorari, prohibition and mandamus, the Trade Union Congress of the Philippines (TUCP) also asked the Supreme Court to restrain the Bureau of Internal Revenue (BIR) from enforcing the “erroneous” policy.

According to TUCP, the BIR committed grave abuse of discretion in issuing the rules and guidelines for the implementation of the law exempting minimum wage earners from paying taxes.

The TUCP pointed out that the BIR guidelines limits the application of the law to a half-year basis, specifically commencing only on July 6, 2008, which is contrary to the legislative intent to make the law applicable to compensation or income received beginning Jan. 1, 2008.

“Instead of helping our workers, the issuance of R.R. No.10-2008 has necessarily curtailed the supposed complete enjoyment of the benefits they are legally and rightfully entitled to, all to the detriment and prejudice of our minimum wage earners and their families, who are now on the verge of poverty,” TUCP explained.

“The exemptions granted under the law seek to provide relief and additional income to our long-suffering workers. Unfortunately, such spirit of the law was subverted with the issuance of revenue regulations,” TUCP added.

Aside from imposing a six-month tax exemption, the Department of Finance and the BIR guidelines also provide that minimum wage earners receiving ‘other benefits’ exceeding the P30,000 limit shall be taxable.

TUCP said determining as to who is a minimum wage earner is the employee’s basic pay/wage and this does not in any way include ‘other benefits,’ which an employee may receive.

If the erroneous guidelines are implemented, TUCP said, each minimum wage earner stands to lose stands to lose some P4,800 that will provide their families the means to survive amidst the soaring prices of basic commodities.

TUCP president Democrito Mendoza said the workers were dismayed with the issuances of the BIR regulation, which restrict them from enjoying fully the benefits granted by the law.

Philippine Star

Malacañang clarified yesterday that the year-end Christmas bonus of government employees could not be released before Nov. 15 of each year as stipulated by law.

Budget Secretary Rolando Andaya, Jr. said the existing budgetary laws prevent them from paying the year-end bonus and cash gift of government personnel before Nov. 15 even though the government would want to do this.

“The rules and regulations for Republic Act 6686, which authorizes the grant of an annual Christmas bonus to national and local government officials and employees, provide that said bonus shall be paid not earlier than Nov. 15 of each year,” Andaya said.

Former budget secretary Benjamin Diokno urged the government to release the Christmas bonus this September in order to boost consumer spending and the economy as a whole.

“Much as we want to release the Christmas bonus now, even much earlier than what is already early for a year-end bonus, we cannot do so since the law prohibits it,” Andaya said.

Andaya belied reports that the release of the year-end benefits would be delayed as claimed by some sectors.

“We assure everyone that the cash requirements for the year-end benefits are intact and will be released promptly on the day specified by law to help with additional cash requirements during the holiday season,” Andaya said.

He added that employees who retired before Oct. 31, the period of reckoning, that they will still receive their year-end benefits on a pro-rated basis.

Meanwhile, Andaya described as “an absolute lie” the reports that the DBM has not yet released funds for the salary adjustments of government employees this year.

He said that every government worker can attest that they have been receiving the 10 percent increase in their pay as provided for under Executive Order 719 which took effect last July.

EO 719 provides for a 10 percent increase in the monthly salary of government civilian workers, military personnel of the Armed Forces of the Philippines and uniformed personnel of the Department of the Interior and Local Government, Philippine Coast Guard, and the National Mapping and Resource Information Authority, as well as government-owned and controlled corporations (GOCC) personnel and local government employees.

“There is no reason why the increase cannot be given to our hardworking government employees. The salary adjustment is funded in the 2008 GAA under the Miscellaneous Personnel Benefits Fund,” Andaya said.

“The initial release, in fact, that the department made for the purpose covered the requirements for July to September this year. It is impossible that government workers have not received the increase yet,” he added.

– Marvin Sy

Zinnia B. Dela Peña
Philippines Star

With inflation continuing to be a growing problem for the economy, only a few companies have adjusted wages as they struggle to stay alive amid a difficult environment.

A survey by leading global consulting firm Watson Wyatt Worldwide showed that around 17 percent of the total 102 respondent Philippine companies have hiked workers’ salaries given rising prices of oil and basic commodities, especially rice. These companies adjusted employees’ wages by an average of 2.57 percent.

“While inflation is a factor in determining wages, it is not the only item companies consider.? Other factors considered are supply and demand for needed talent, individual performance of employees and affordability,” Watson Wyatt said.

Of the 102 corporations that reviewed their benefit policies for the past year, only 10 to 15 percent made adjustments on rice, transportation, gasoline allowances and subsidies in response to the second quarter surge in prices.

Patrick V. Marquina, data services manager of Watson Wyatt, said most firms surveyed are planning to grant salary increases next year, averaging 9.7 percent.

Marquina pointed out while companies have acknowledged the economic pressures bearing down on their employees, they are constrained to effect any salary hike as profits are squeezed by higher commodity prices and a slowing global economy.

“They understand that workers have been hit hard by inflation but at the same time they must also manage their operating costs since these have also been seriously affected by rising prices,” Marquina disclosed.

The survey covered five major industries – hi-tech, consumer and manufacturing, pharmaceutical and animal health, banking and financial services and business process outsourcing and call centers.

Another survey conducted by Watson Wyatt Worldwide showed that Asia Pacific employers are better prepared to handle an economic downturn compared to their counterparts in the United States. The poll said 84 percent of employers in Asia Pacific have contingency plans, while in the US only 67 percent have prepared one.

The survey said 46 percent of Asian employers plan to slow the rate of salary increases, which ranked third in the contingency planning activities of the employers.

Companies with contingency plans have a better chance of weathering storms and recovering when the national or global economy improves, said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt.

Rising inflation raises concern that households will curtail spending on non-essentials as they fork over more for rising food and energy prices.

Michael Punongbayan
Philippine Star

The United Opposition (UNO) yesterday junked the idea of giving President Arroyo a pay increase due to her consistently high disapproval ratings, saying an early retirement incentive would probably be more suitable.

The President, along with Vice President Noli de Castro and senators and congressmen, is not covered by the proposed government-wide salary increase, according to Parañaque Rep. Roilo Golez.

UNO welcomed a proposal to increase the salary of government employees but twitted Malacañang’s line that Mrs. Arroyo needs a 100-percent pay increase.

“We support an increase in the salary of government workers. Government workers, like many Filipinos, can hardly make ends meet because of the economic crisis under the Arroyo administration,” Makati Mayor Jejomar Binay said.

Binay, UNO president, said the Palace was being overly defensive about the proposal to increase the salary of the president.

“The administration admits that it is making a windfall from the value added tax (VAT). Ironically, the windfall comes from taxes squeezed from hardworking Filipinos, including government workers. A salary increase is the least that Malacañang can do,” he stressed.

“When the Palace invokes Mrs. Arroyo’s so-called work ethic and its toll on her health, they make it appear as if she alone is taking the extra effort. They ignore the fact that countless government workers also do their share of the work, and perhaps a lot more, for a lot less,” Binay said.

“And if one considers the allegations of irregularities that involve Mrs. Arroyo and her husband, one might even be tempted to ask if she is not already compensated enough,” he added.

UNO spokesman Adel Tamano said the country would benefit more if the President sought another “better paying job elsewhere.”

“According to Malacañang sources, the president is overworked and underpaid and stressed, which explains the need to double her salary,” he said.

“We have a simpler solution: To lessen the stress she causes our nation, GMA should resign and find better paying employment elsewhere. Of course, that is wishful thinking but seriously, any talk of doubling the salary of the president in the context of our current economic problems is in very bad taste,” he said.
Not even a peso

San Juan Mayor JV Ejercito further noted that given the consistent high disapproval ratings of the President in public surveys, she “does not deserve a P1 pay increase.”

“Ordinary government employees are required to get very satisfactory ratings in their regular individual performance appraisal reports before they are given pay increases as incentive for good work,” he explained.

“Given her dismal public approval survey results, I don’t think we can give President Arroyo a merit pay increase. Perhaps, what the President deserves is an early retirement incentive,” Ejercito said.

On Sunday, Press Secretary Jess Dureza said there was nothing irregular about the doubling of the President’s salary as all state employees will be given a pay raise in the next four years.

Dureza was reacting to criticism against the four-year salary upgrade plan for state workers that will increase the President’s monthly pay to P120,000 from P60,000.
The Department of Budget the proposal to Congress.
A necessity

Malacañang explained that one of the reasons for the increase of the President’s salary is to pave the way for the salary augmentation of the rest of the people working in the government.

In a statement, Budget Secretary Rolando Andaya Jr. said in order to maintain hierarchy, the pay differentialsmust be maintained between grades.

If the salaries of every government employee will be increased, then the salary of the highest paid in the bureaucracy, who is the President, must go up.

“To give room to pay increases at the bottom, the ceiling must be raised and it is precisely the reason why the proposed pay of the number one official of the land has been increased to accommodate salary augmentations below,” Andaya said.

He defended the increase and said it is not even commensurate with the President’s task of being the chief executive officer of an P8.5-trillion economy with 90 million stockholders.

“For the record, the present holder of SG-33 (salary grade-33) did not lobby for any pay increase as the exercise of setting new compensation benchmarks did not take into account who the present or future occupants of government positions are or will be,” he said.

SG-33 is the highest pay grade in government and is held by only one person, the President.

As a result of the increase in the salary of the President, there will be significant increases in the salaries of all government employees.

But Golez stressed that the “Constitution expressly prohibits (these) officials from benefiting from any salary adjustment given during their tenure.”

He quoted Article VII Section 6 of the Constitution on the prohibition on Mrs. Arroyo and De Castro: “The salaries of the president and vice president shall be determined by law and shall not be decreased during their term. No increase in said compensation shall take effect until after the expiration of the term of the incumbent during which such increase was approved.”

— Jess Diaz, Sandy Araneta, Marvin Sy

Abigail Kwok
INQUIRER.net

MANILA, Philippines — Calling government’s non-wage benefit project a “patently deceitful scheme,” a leftist labor group said government officials were clueless of the true economic situation of the country’s workers.

In a statement on Monday, Kilusang Mayo Uno (KMU, May First Movement) spokesperson Prestoline Suyat called the government misinformed when it said workers still had P1,500 left every month to purchase basic commodities.

“The poorest Filipino workers are receiving their salaries daily and almost all the time what they get [is] not enough for their families needs. Furthermore, if the Arroyo government is really sincere to provide access to affordable basic commodities, why only put [up] a single venue to sell these every half of the month? A worker in Novaliches or Pasig will not go to Lawton, Manila just to buy discounted instant noodles which will cost him or her higher fare,” Suyat said.

On Friday, various government agencies launched the “Diskwento: Presyong Pang-Empleyado” (Discount: Prices for Employees) in Mandaluyong City.

Spearheaded by the Department of Labor and Employment (DoLE), National Wages and Productivity Commission (NWPC), and Department of Trade and Industry–National Capital Region (DTI-NCR), “Diskwento” is meant to gives employees access to affordable basic commodities.

DTI assistant secretary Angel L. Pelayo said employees need only to present their company IDs and they will be provided “buyer’s vouchers” that entitle them to purchase up to P1,500 worth of items.

But Suyat said some of the items being sold were not “saleable,” such as corn oil, which is priced at P392 compared to the average retail price of P420.

“We cannot help but suspect that the Arroyo government aims to sell to us some products which are not usually consumed by the public…We are also apprehensive that the products available in the project are near expiration date so they want to dispose of these immediately,” he said.

Suyat said instead of using “band-aid solutions,” the government should instead think of long term solutions, such as the immediate approval of the legislated P125 across-the-board wage increase.

Philippine Star

The Department of Labor and Employment (DOLE) is pushing “non-economic” benefits to help workers cope with the continuing increase in transport fare and prices of essential commodities.

Labor Secretary Marianito Roque said the government is looking at programs that would provide workers, especially minimum wage earners, with possible sources of additional income.

“The officials of the different DOLE regional offices are meeting soon to discuss safety nets, particularly non-economic measures to help our workers augment their income,” Roque said.

“The oil crisis is a global problem but we would like to assure our workers that we are exerting all efforts to cushion its negative impact on the working class,” he said.

The labor chief earlier discounted the possibility of another round of wage hikes.

Roque noted that the different regional tripartite wages and productivity boards (RTWPBs) are restricted by law from granting successive salary increases for minimum wage earners within one year.

The most recent salary increase was granted by different wage boards just two months ago, he added.

However, Roque said there are special instances such as when there are supervening conditions that would necessitate the wage board to grant another wage adjustment.

Militant labor groups are pressing for the immediate passage of a measure that would grant a legislated across-the-board salary increase of P125 nationwide.

Workers are also demanding the scrapping of the oil deregulation law and the expanded value added tax on petroleum products to help them cope with continued price increases.

– Mayen Jaymalin

Paolo Romero
Philippine Star

The Senate and the House of Representatives are likely to fast-track the approval of another round of salary increases for government workers through a resolution to be proposed by Malacañang next month, Budget Secretary Rolando Andaya Jr. said yesterday.

But while the one million-plus state workers are due for the third round of increases under the Salary Standardization Law, Executive Secretary Eduardo Ermita said it would be too early for employees in the private sector to seek the same despite the continued rise in consumer prices.

“It is definitely reasonable to say that the present condition does not warrant an increase (for private sector),” Ermita said.

He pointed out the minimum wage was raised just last month by the regional wage boards and there is a one-year ban before another round of increases for private sector workers can be implemented.

The last wage hike granted was still the one-year ban since the minimum wage was increased in August but regional wage boards allowed the increases due to “supervening conditions.”

Andaya said a resolution has been drafted for another round of salary increases for government employees under the Salary Standardization Law 3 (SSL3) totaling P20 billion.

“We are ready with our resolution and the funding would be incorporated in the 2009 budget. This will cover all employees although the increases would be different per salary level,” he said.

He said Senate President Manuel Villar and Speaker Prospero Nograles expressed willingness to fast track the resolution during initial consultations with them.

The resolution, he said, would be filed in Congress after President Arroyo delivers her State of the Nation Address on July 28.

Andaya could not say exactly how much the salary increases would be but “it could be better” than what the government workers received the last time.

The second SSL amounted to over P9 billion.