Iloilo, Capiz biz groups slam wage hikes in appeal

By Joseph B.A. Marzan

Five business groups based in the city and province of Iloilo and Capiz formally lodged their appeal against the latest round of regional wage hikes on Monday, May 30, 2021 by highlighting the increases as being “untimely” and “unreasonable”.

They asked the National Wages and Productivity Commission (NWPC) to recall Wage Order No. RBVI-25, alleging that the order was “issued with grave abuse of discretion.”

Their allegations are based on two issues that need to be resolved by the national wage body: whether or not the wage order was timely and reasonable, and whether or not the order was sufficient.

They clarified in their prayer that while they want to recall the wage order, they would also wish for a minimum wage increase of around 3 to 5 percent based on the wages set in Wage Order No. RBVI-25, which was issued in 2019.

In alleging that the wage order was ill-timed and unreasonable, they said that while it was lower than the P750 previously petitioned by the FISHTA Union of Employees for Reforms through Solidarity Actions (FUERSA-SUPER), it was still unjust and unconscionable “as it disregards the capacity of the employer to pay these wages and the economic repercussions on the local economy of Western Visayas.”

They cited Iloilo City’s de-escalation to Alert Level 1 last March and the lower number of businesses that renewed and those which closed shop.

Iloilo City Local Economic Development and Investment Promotions (LEDIP) office data indicated that only 12,287 businesses renewed their permits in the city in 2021 (lower than the 16,180 which renewed in 2021) while 979 shut down.

“If [Wage Order No. RBVI-26 is] passed, these will cripple, not decimate, the operations of struggling local businesses in Iloilo City and the rest of the region, and will hinder their efforts to bounce back from the pandemic, thereby incapacitating them from fully servicing the needs of the public and creating more jobs,” the business groups said in the appeal.

“As the COVID-19 pandemic continues to linger and pose a threat to the public health of the nation, the Ilonggo business sector, […] would have wanted to use this time [Alert Level 1] to fully recover from their losses during the peak of the pandemic and thereby revive the pre-pandemic levels of economic activity in Region VI. […] However, the imposition of the current minimum wage prevents them from fully pursuing said goals,” they added.

“[The business groups] do not fully object to any increase in the minimum wage, but they only appeal for a just and reasonable increase in order to fully balance the interests of the labor and employer.”

The organizations also stated that the latest wage increase would be the biggest jump by between 13 to 35 percent, citing previous wage orders all the way back to 2015.

They also cited that Western Visayas had imposed even higher wage increases than more populous regions including the National Capital Region and Central Visayas.

They also pointed out the unemployment rates in the region which was at 6.6 percent in 2021, as well as the 5.9 percent growth rate in 2021 which was a bounce from the –9.7 percent growth rate in 2020.

They said that the wage increases dismissed the factors in wage increase determination in Article 124 of Presidential Decree No. 442 (Labor Code of the Philippines), including:

• Need to induce industries to invest in the countryside;
• Prevailing wage levels;
• Fair return of the capital invested and the capacity to pay of employers;
• Effects on employment generation and family income; and
• Equitable distribution of income and wealth along the imperatives of economic and social development.

Grave abuse of discretion was imputed to the Regional Tripartite Wages and Productivity Board-VI (RTPWB-VI), accusing the regional wage body of a “gross misapprehension of facts”.

“These were among the standards in the law which [we] deemed were not given the proper weight and consideration by the RTWPB-VI when they have approved Wage Order No. RBVI-26. Thus, it is our humble submission that the said wage order does not have sufficient legal and factual bases. By reason of this, the action of the Honorable Board is tinged with grave abuse of discretion,” they allege.

The business groups who filed the appeal include the Iloilo Business Club, the Iloilo Economic Development Foundation, the Iloilo Hotel Restaurants and Resorts Association, the Philippine Chamber of Commerce and Industry – Iloilo Chapter, and the Capiz Halaran Chamber of Commerce and Industry.

Daily Guardian has sought the Bukluran ng Manggagawang Pilipino, one of the leading advocates for the wage order, to comment on the appeal but has yet to respond as of this writing.