No to P200 wage hike but yes to other measures, says MAP

Instead of a wage increase, the Management Association of the Philippines proposes that employers solely shoulder mandatory SSS, Pag-IBIG, and PhilHealth contributions of minimum wage earners

MANILA, Philippines – The Management Association of the Philippines (MAP) thumbed down the House-approved P200 daily increase for minimum wage earners, and instead appealed to employers to alleviate workers’ hardships in other ways.

One particular way is shouldering the contributions of both employees and employers in the Social Security System (SSS), Home Development Mutual Fund (Pag-IBIG), and Philippine Health Insurance Corporation (PhilHealth).

“We…make an appeal to employers to help alleviate the plight of the minimum wage earners by implementing urgent measures, like paying their employees’ share in SSS, Pag-IBIG, and PhilHealth contributions, [and] sharing with their employees at least 20% of their organizations’ net income before tax, among others,” MAP said in a statement on Monday, June 9.

MAP is one of the country’s most reputable business organizations, counting top executives among its members. Similar to other employers’ and business groups, MAP said it does not support the proposed across-the-board P200 daily increase for minimum wage earners, which the House of Representatives approved on Wednesday, June 4.

The P200-per-day increase translates to around P4,000 monthly if a minimum wage earner works 20 days in a month.

The current SSS contribution rate is 15%, with 10% shouldered by employers and 5% shouldered by employees, and the PhilHealth premium rate is 5%, shared equally between employers and employees. Pag-IBIG contributions are at 2%, with employers matching the amount.

Long-lobbied bill

With the 19th Congress coming to a close, the House only caught up now with the Senate, which had approved the version granting a P100 daily increase in February 2024.

Various labor groups have long lobbied for this bill, pointing to what they deem as the inability of regional wage boards to meaningfully improve the lives of minimum wage earners through their occasional increases of P20 to P50 for workers in their respective regions.

The House and Senate must convene in a bicameral conference by Wednesday, June 11, to reconcile the amount of the increase and transmit a consolidated bill to President Ferdinand Marcos Jr. before Congress adjourns sine die. Then, the President will decide whether to sign or veto it.

MAP called on the bicameral conference committee to conduct further consultations with all affected sectors, like employers, employees, consumers, and involved agencies, before reaching a decision.

“We also urge the bicameral conference committee to take into account the potential impact of the P200 daily wage increase on inflation and business sustainability, particularly on the millions of small enterprises that struggle just to survive,” it said.

MAP said the “basic problem” is not low wages, but high costs. “We believe that attention should be given to wage-to-cost ratio, not just wages. We have the third highest minimum wage in Asia, and some of the highest costs — especially of food, power, transportation, and housing.”

The Philippines has been recording slowing inflation in recent months. This does not necessarily mean that prices are lower, but that prices are rising slower than before.

“We urge the executive and legislative branches of government to focus on reducing those costs to help make our country more export-competitive, and addressing inefficiencies across all sectors to improve overall productivity and reduce all forms of waste,” the business group said. – Rappler.com