The Confederation of Wearable Exporters of the Philippines, or CONWEP, on Tuesday joined other private sector employers in criticizing the legislated wage hike proposals, including the P100 daily increase passed by the Senate recently.

Saying it could kill their industry already reeling from foreign competition, the group warned that a further increase in the prevailing minimum wage would “send jobs away to competing ASEAN countries such as Myanmar, Indonesia, Cambodia and Vietnam.”

The House of Representatives is pushing for an even bigger daily wage increase of P350 for minimum wage earners in the private sector, which employers stressed would be “disastrous” if passed into law.

CONWEP formally manifested its opposition to Senate Bill 2534, which passed on its third and last reading last week, in a letter to President Ferdinand Marcos Jr. sent by its executive director, Maritess Jocson-Agoncillo.

On the rebound

Agoncillo said the industry was only starting to rebound after the global economic turmoil due to the pandemic, pushing its workforce to 182,600 by December 2023 from 210,000 in 2021.

“Falling consumer purchasing power and rising prices left retail stores with higher inventory, and buyers migrated their orders to more affordable options such as Vietnam, Cambodia and Indonesia due to preferential trade agreements or competitive sourcing costs and faster deliveries,” she said.

Agoncillo warned that if the legislated wage hike is implemented, about 120,000 of their workers could find themselves without jobs.

The prevailing minimum wage in Metro Manila is P610 a day.

She said that a major European sports brand moved its orders to Vietnam in 2023, leading to 7,000 job losses in the Philippines as Vietnam entered into a free-trade agreement with the European Union.

Increasing the minimum wage by P100 daily would drive more foreign investors and clients away, Agoncillo warned.

“Last 22 February, we received an advice from a major buyer in New York that its orders would be diverted to Indonesia and Cambodia should there be another wage spike, aside from the 2023 regional wage board-mandated increase in the daily minimum wage,” she said.

She said the factories that stand to lose are Regions 3, 4-A/4-B, and 7. “To survive 2024 and until the market recovers, we seek his excellency’s intervention,” the group told the President.

Monthly subsidy instead

Instead of a legislated wage hike, the group proposed a two-year monthly subsidy of P1,000 for minimum wage earners, similar to that granted by the government during the Covid-19 pandemic.

“We understand the predicament of the approximately 4.2 million registered minimum wage earners adversely affected by inflation and rotational job losses,” the group said.

However, it said that the Department of Labor’s P1,000 monthly subsidy could be again funded instead of a legislated P100 daily hike to minimum wage earners in the private sector.

“An exodus of investments is the last thing we need at this time, and this is expected to happen within six months from the passage of a congressional wage increase of any amount, even if implemented in tranches,” she said.

The Employers Confederation of the Philippines on Monday said that a legislated wage hike even higher than the Senate’s P100 a day would have catastrophic results.

The P350 hike being mulled by the House, the ECOP said, would raise inflation by at least seven percentage points, while the Senate’s P100 hike would raise the prices of goods and services by two percent or more.