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
0

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.”


German industry groups warn US on tariffs before Trump-Juncker meeting

Updated 22 July 2018
0

German industry groups warn US on tariffs before Trump-Juncker meeting

  • Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1
  • Trump is threatening to extend them to EU cars and car parts

BERLIN: German industry groups warned on Sunday, before European Commission President Jean-Claude Juncker meets US President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.
Citing national security grounds, Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1 and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting on Wednesday.
“The tariffs under the guise of national security should be abolished,” Dieter Kempf, head of Germany’s BDI industry association said. Juncker should tell Trump that the United States would harm itself with tariffs on cars and car parts, he told Welt am Sonntag newspaper.
The German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported. “Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.
German Economy Minister Peter Altmaier told Deutschlandfunk radio on Sunday he hoped it was still possible to find a solution that was attractive to both sides. “For us, that means we stand by open markets and low tariffs,” he said
He said the possibility of US tariffs on EU cars was very serious and stressed that reductions in international tariffs in the last 40 years and the opening of markets had resulted in major benefits for citizens.
EU officials have tried to lower expectations about what Juncker can achieve, and played down suggestions that he will arrive in Washington with a novel plan to restore good relations.
Altmaier said it was difficult to estimate the impact of any US car tariffs on the German economy, but added: “Tariffs on aluminum and steel had a volume of just over six billion euros. In this case we would be talking about almost ten times that.”
He said he hoped job losses could be avoided but noted that trade between Europe and the United States made up around one third of total global trade.
“You can imagine that if we go down with a cold in the German-American or European-American relationship, many others around us will get pneumonia so it’s highly risky and that’s why we need to end this conflict as quickly as possible.”
Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag the German economy had for decades counted on open markets and a reliable global trading system but added: “Every day German companies feel the transatlantic rift getting wider.”