‘Uniform wage rate to drive away investors’

The Philippines has one of the highest minimum wages in the world and implementing a uniform rate nationwide will only drive investments away and kill jobs, a group of former policymakers said.

In a statement yesterday, the Foundation for Economic Freedom (FEF) said “a minimum wage policy will further deepen poverty and unemployment in the countryside, contrary to the administration’s policy to rebalance growth.” Last month, the Department of Labor and Employment said it was studying the possibility of imposing one minimum wage rate nationwide in a bid to encourage more people to work in rural areas. Currently, the National Capital Region (NCR) has the highest minimum wage of P454 to P491 daily for non-agriculture jobs. The lowest minimum wage is in Region IV-B (Mindoro, Marinduque, Romblon and Palawan provinces) at between P225 and 285. Regional tripartite boards are granted powers to adjust wages based on petitions and hearing, although traditionally, a hike in NCR wages is followed by similar petitions elsewhere. Labor Secretary Silvestre Bello III did not respond to a request for comment on the FEF position yesterday. The Philippines has one of the highest minimum wages in the world and implementing a uniform rate nationwide will only drive investments away and kill jobs, a group of former policymakers said. In a statement yesterday, the Foundation for Economic Freedom (FEF) said “a minimum wage policy will further deepen poverty and unemployment in the countryside, contrary to the administration’s policy to rebalance growth.” Last month, the Department of Labor and Employment said it was studying the possibility of imposing one minimum wage rate nationwide in a bid to encourage more people to work in rural areas. Currently, the National Capital Region (NCR) has the highest minimum wage of P454 to P491 daily for non-agriculture jobs. The lowest minimum wage is in Region IV-B (Mindoro, Marinduque, Romblon and Palawan provinces) at between P225 and 285. Regional tripartite boards are granted powers to adjust wages based on petitions and hearing, although traditionally, a hike in NCR wages is followed by similar petitions elsewhere. Labor Secretary Silvestre Bello III did not respond to a request for comment on the FEF position yesterday. Citing a World Bank study, FEF said the country has been at a disadvantage attracting investments because of its high minimum wage. It encouraged the Duterte administration to amend the country’s Labor Code to remove “short and strict” labor security provisions and to allow worker-company wage negotiations. “We also urge the administration to consider the creation of special economic zones where labor-intensive industries can be set up, exempted from mandatory implementation of legal minimum wages,” FEF said. Industries such as garments and light manufacturing may be included under the special economic zones, with FEF saying investments of such kind had been “avoiding” the Philippines and moving to Vietnam and Indonesia. “Seeking to impose high minimum wages in the entire country irrespective of local conditions of unemployment and cost of living will only drive investments and jobs away,” FEF said. In July, the country’s unemployment rate edged lower to 5.4 percent from last year’s 6.5 percent, according to latest census data.