LOW INFLATION NO REASON TO DENY WAGE HIKE

Various business groups have claimed that there is no basis to adjust the minimum wage because the erosion of the peso as of April 2007 was very insignificant. But it obscures the point that workers’ wages can no longer keep with high and rising prices, according to independent think-tank IBON Foundation.

While inflation in April did go down to 2% from 8% in the same period last year, this only indicated that the rate that prices were going up had slowed but prices of goods and services still remained high. In fact, the cost of living continues to escalate.

The National Wages and Productivity Board pegs the living wage for a family of six as of May 2007 at P786. But the daily minimum wage in Metro Manila is just P350 (P300 basi c p lus P50 cost of living allowance) or just over half of the family living wage.

Moreover, the low inflation rates are meaningless for the increasing number of Filipinos who are earning insufficient incomes or worse, do not have jobs. IBON estimates that close to a third of the labor force were either jobless or if employed, is still looking for more work.

The real value of workers’ wages had also seriously been eroded. The purchasing power of the peso in Metro Manila, or the amount of goods and services one peso can buy, had fallen to P0.70 in April from P0.72 last year. This means that over the past year, a worker has lost P2 of actual buying power for every P100 he or she earns. But between April 2005-2006 a worker actually lost P5 of actual buying power.

This loss in buying power underscores the urgency for a wage hike, particularly in light of workers’ increasing productivity. Workers’ productivity grew to P9,560 in the first quarter of 2007 from P9,265 in the same period last year. (end)


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SIX OUT OF TEN FILIPINOS WANT OIL DEREGULATION LAW REPEALED

IBON SURVEY

In the wake of weekly oil price hikes and skyrocketing pump prices, six out of ten Filipinos said they favored the repeal of the Oil Deregulation Law, according to the latest survey conducted by independent think-tank IBON Foundation.

Results of the April 2008 IBON survey showed that 58.6% of respondents said they agree with proposals to restore government regulation of the local oil industry and repeal the Oil Deregulation Act (RA 8479). The law, which was implemented in 1998, removed government control over the downstream oil industry.

The IBON nationwide survey was conducted nationwide from April 7 to 16, 2008 with 1,495 respondents from various sectors, using a multi-stage probability sampling scheme with a margin of error of plus or minus three percent.

Below is the tabulation of results of the respondents’ perception on returning government regulation on the oil industry.

Do you agree with the proposals to return government regulation on the oil industry and to repeal the Oil Deregulation Law?

January 2008 April 2008
Frequency Percentage Frequency Percentage
Yes 891 59.28 876 58.60
No 383 25.48 369 24.68
Don’t Know 218 14.50 235 15.72
No answer 11 0.73 15 1.00
Total 1,503 100.00 1,495 100.00

ACROSS-THE-BOARD WAGE HIKE URGENT, DOABLE –IBON

A legislated across-the-board wage hike, and not regional wage board hikes or non-wage benefits, should be urgently granted to give Filipino workers immediate relief from rising cost of living. And, contrary to claims of employers, such increase is doable.

The increasing labor productivity of local workers, or the ratio of national output to employment, has been steadily increasing over the past decade. IBON research head Sonny Africa pointed out that between 1999 and 2006, labor productivity has increased by 56.3% in nominal terms and 13.1% in real terms (taking inflation into account). This shows that employers could afford to grant the P125 wage hike, which would necessarily trim their profit margin but will certainly not push them to bankruptcy.

He added that such a wage hike is actually not enough to raise minimum wages to the level of decent living, but would at least provide relief for the workers. The current daily minimum wage in Metro Manila is P365, which would become P490 with the proposed wage hike, or only half of the estimated daily living wage as of March 2008 of P858.

Africa said that the wage hike must be legislated and across-the-board since all workers nationwide are affected by the skyrocketing prices of goods and services. He pointed out the regional wage boards have only served to confuse parallel conditions of workers across regions.

Further, a legislated wage hike would have the strength of law behind it and is more enforceable while allowing for fewer exemptions.

ACROSS-THE-BOARD WAGE HIKE URGENT, DOABLE –IBON

A legislated across-the-board wage hike, and not regional wage board hikes or non-wage benefits, should be urgently granted to give Filipino workers immediate relief from rising cost of living. And, contrary to claims of employers, such increase is doable.

The increasing labor productivity of local workers, or the ratio of national output to employment, has been steadily increasing over the past decade. IBON research head Sonny Africa pointed out that between 1999 and 2006, labor productivity has increased by 56.3% in nominal terms and 13.1% in real terms (taking inflation into account). This shows that employers could afford to grant the P125 wage hike, which would necessarily trim their profit margin but will certainly not push them to bankruptcy.

He added that such a wage hike is actually not enough to raise minimum wages to the level of decent living, but would at least provide relief for the workers. The current daily minimum wage in Metro Manila is P365, which would become P490 with the proposed wage hike, or only half of the estimated daily living wage as of March 2008 of P858.

Africa said that the wage hike must be legislated and across-the-board since all workers nationwide are affected by the skyrocketing prices of goods and services. He pointed out the regional wage boards have only served to confuse parallel conditions of workers across regions.

Further, a legislated wage hike would have the strength of law behind it and is more enforceable while allowing for fewer exemptions.

REMOVAL OF VAT ON OIL URGENT WITH NEW WAVE OF PRICE HIKES

In the wake of a new wave of price hikes of petroleum products and basic goods, the removal of the 12% value-added tax (VAT) on oil products is urgent in order to give immediate relief to millions of poor Filipinos, according to independent think-tank IBON Foundation.


IBON executive editor Rosario Bella Guzman pointed out that the recent round of oil price hikes is more than enough reason to remove the VAT on oil products, particularly in the wake of the recently released official poverty figures showing that the number of poor Filipinos is increasing.

It has been estimated that if the 12% VAT on oil products were removed, pump prices could go down by P4 a liter and liquefied petroleum gas (LPG) by P60 per 11-kg cylinder. “These could help the millions of poor Filipinos through savings on their fuel bills,” Guzman pointed out. “Fuel-intensive local establishments would also benefit through lower production costs.”

In 2006, the government earned P49.15 billion from VAT on crude and petroleum products. This could easily be offset through revenue measures that are less burdensome to Filipinos, such as plugging tax leakages. In 2006, government lost P82 billion in uncollected corporate income taxes and an average of P57 billion annually in uncollected VAT.

“In the wake of the worsening poverty problem, such measures that would give the quickest relief to a greater number of Filipinos are important,” said Guzman.