According to the National Economic and Development Administration (Neda), increasing wages to mitigate the impact of high prices on workers can only fuel inflation.
On the sidelines of the Makati Business Club forum on Thursday, Neda secretary Arsenio M. Balisacan said that wage increases due to more jobs and/or increased productivity, however, would not increase inflation.
Working groups have already called for additional benefits, grants and a new round of wage increases due to severe inflation. The Congress of Trades Unions of the Philippines (TUCP) is simply waiting for the latest inflation data before filing its petitions. (Full story: https://businessmirror.com.ph/2023/02/23/labor-seeks-wage-hikes-anew-amid-high-inflation/)
“It’s obvious that [wage hike] will affect inflation, because usually in a fairly dynamic economy, wages rise as a result of increased productivity, a tightening of the labor market, and there are not many jobs in the market that are offered in the market, which will lead to wage growth Balisakan said. reporters
“But when wages go up, not because of more jobs, more jobs, or increased productivity, it will have a big impact on our competitiveness and the economy. So we have to be very careful with these forces,” he added.
Working groups such as TUCP have told BusinessMirror that they want to propose an increase in the Emergency Cost of Living (Ecola) allowance given that free rides on the EDSA carousel bus have been halted and food inflation has increased significantly.
They said Ecola in the National Capital Region (NCR) is 570 pesos, but the real value of this benefit is only 424 pesos. This means that the worker’s Ecola must be increased by P130 to at least reach P500.
With this in mind, and also taking into account recent spikes in inflation, TUCP said Ecola should be increased by 270 pesos to 300 pesos.
“Imagine that in January the price of vegetables went up by 30 percent. [while] Electricity inflation rose from 20 to 22 percent. How will people survive? Employees are not robots. You have to make sure they have decent food that keeps them healthy and keeps them productive,” said TUCP Vice President Luis Corral.
Balisacan said that is why the government is looking to prioritize boosting the economy to create not only jobs but quality jobs that will enable Filipinos to increase their incomes.
According to data previously provided by national statistician Claire Dennis S. Mapa, the country’s GDP at current prices reached 22.02 trillion pesos in 2022 from 19.41 trillion pesos in 2021; 17.95 trillion pesos in 2020; and 19.52 trillion pesos in 2019.
At constant inflation-adjusted prices, GDP was 19.95 trillion pesos from 18.54 trillion pesos in 2021; 17.54 trillion pesos in 2020; and 19.38 trillion pesos in 2019.
However, per capita gross national income at current prices reached 209,012 pesos in 2022. This exceeds the country’s per capita gross national income of 200,135 pesos in 2019.
However, per capita gross national income at constant prices showed that Filipinos earned just 188,939 pesos in 2022. This is lower than the per capita gross national income of 198,522 pesos in 2019. “Our approach is to rapidly grow the economy, make sure growth is accompanied by quality jobs. That is why we are working very hard to attract investment and encourage our private sector to invest now because that is what will create high quality jobs,” said Balisakan.
On Wednesday, the task force said another government intervention to support workers amid rising costs of living is a one-time cash relief of 5,000 pesos for 4 million minimum wage earners.
Sentro ng mga Nagkakaisa in Progresibong Manggagawa (SENTRO) also supported the TUCP’s call for higher wages and cash benefits, citing the Senate’s recent decision to increase its workers’ inflation aid from 12,000 to 50,000 pesos.
Image Credits: Noni Reyes