Philippines’ trade chief negative to legislated wage hike for Filipino workers

There had been calls for the Philippine government to review current wages because of higher inflation – due to higher oil prices and the implementation of a tax law – during the past months. (AFP)
Updated 20 June 2018
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Philippines’ trade chief negative to legislated wage hike for Filipino workers

  • “The more sustaining solution for wage increases would be more jobs to be created and more investments to come in”
  • President Rodrigo Duterte last month ordered the Department of Labor and Employment to convene regional tripartite wage boards to study the possibility of adjusting minimum wages

DUBAI: An increase in the minimum wage could have wider, negative implications that will would impact even those who will not benefit from the additional pay, the Philippines’ trade and industry secretary said on Wednesday.
“The reality is not all [Filipino workers] are wage earners,” trade chief Ramon Lopez commented during an economic briefing at Malacañan Palace.
“If we increase wages, the costs will increase which can pressure prices to go up. And of course, those who will be hit are not only the wage earners, but everyone else who did not benefit from the wage hike. They will also be affected.”
“The more sustaining solution for wage increases would be more jobs to be created and more investments to come in.”
There had been calls for the government to review current wages because of higher inflation – due to costlier oil prices and the implementation of a tax law that hit sugar and tobacco product prices – during recent months. Prices of consumer goods rose 4.6 percent last month, slightly higher than the 4.5 percent recorded in April but lower than the 4.9 percent government forecast.
Some legislators are planning to file bills aimed at increasing minimum wages across the country when Congress – the country’s legislative body – resumes regular sessions on July 23.
“Inflation (in May) was caused by oil prices and a shortage in rice,” Lopez said, while prices of sugar and tobacco products increased because of the higher tariffs imposed on them under the Tax Reform for Acceleration and Inclusion (TRAIN) law which came into force on Jan. 1.
“The shortage of rice however has been addressed with the government-to-government importation we undertook, and shipments are now being unloaded in various ports around the country to address local supply.”
Lopez, however, did not discount the possibility that regional tripartite wage boards – which formulate and review policies on regional wages – could implement additional daily salaries, although such moves must be based on the prevailing economic conditions in the specific regions granting these increases.
“There can be consideration because of inflation, so if you ask me there could be a minimal adjustment but that should not be more than what is necessary because it would really create a strong pressure on inflation,” he said. “Whatever inflation is felt in the region that could be a basis for the adjustment.”
President Rodrigo Duterte last month ordered the Department of Labor and Employment to convene regional tripartite wage boards to study the possibility of adjusting minimum wages to mitigate the effects of rising consumer prices, the peso depreciation and the implementation of the TRAIN Law. Duterte also directed trade officials to tighten the monitoring of prices of basic goods and commodities to guard against profiteering.
“But if we are successful in maintaining industrial peace, maintaining rule of law, peace and order, no corruption, good business environment, investments would come in and that will drive up wages,” Lopez said. “We have to have investments and job-creation activities so that wages and income will go up naturally because of the supply and demand for labor. That is what we should strive for.”


Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019
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Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”