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NEDA: Statutory wages can hurt small businesses and fuel inflation



NEDA: Statutory wages can hurt small businesses and fuel inflation

PROPOSALS to legislate wage increases could fuel inflation and hurt small businesses, the National Economic and Development Authority (NEDA) said on Thursday.

“We are trying to dampen inflation. And we don’t want to add more sources of pain at this point because I think despite the challenges, we are doing a good job of steering the economy towards sustainable growth,” NEDA Secretary Arsenio M. Balisacan told reporters at the press conference. lateral line of a briefing.

Headline inflation accelerated to 3.8% in April from 3.7% last month, due to rising transportation and food costs, the Philippine Statistical Authority (PSA) said on Tuesday.

Lawmakers are considering several proposals for wage increases between 150 and 750 euros. In February, the Senate approved the third and fiultimately an across-the-board wage increase of P100.

“Circumstances in different sectors, firms and in-country are not the same, so a single wage would have negative consequences,” he said.

“Small and medium-sized businesses will be hit hard. And what will their reaction be? They could minimize their labor (levels).

According to the PSA, the unemployment rate rose from 3.5% in February to 3.9% in March. This amounts to two million unemployed in March, compared to 1.8 million in February.

NEDA has said it is not against raising wages but supports the wage setting mechanism of regional wage councils.

“We want to strengthen the bargaining power of workers (groups) in tripartite wage councils,” Mr. Balisacan said.

Federation of Free Workers President Jose G. Matula said the current system of wage increases does not meet the daily needs of workers.

“It is concerning that despite the recent wage increases through regional wage councils, all regional minimum wages in the Philippines remain below the PSA poverty line and well below the family living wage,” he said in a Viber message.

According to research group IBON Foundation, a family of five in the capital region would need 1,192 euros per day or 25,928 euros per month to live decently.

IBON Foundation Executive Director Jose Enrique A. Africa said a wage increase of up to P150 “would be feasible even for smaller enterprises.”

“If they are taken out of profits, they do not have to lead to job losses for workers or price increases for consumers – the key concept is that employers are more open to sharing profits with workers who were essential to the profits that were made in the beginning made.” he said via Viber.

To support micro, small and medium enterprises (MSMEs), government must provide preferential tax treatment and incentives, and help develop workers’ technical skills, Mr Africa said.

MSMEs should also be supported as the government eases import restrictions and receive more funding from the national budget, he added. — Beatriz Marie D. Cruz