SCUTTLEBUTT

Legislated hike jitters

Had the legislated wage hike law passes, market pundits said some blue chips would have taken a direct hit.

While the nation was preoccupied with the impeachment trial, the legislated wage hike bill effectively died as the 19th Congress adjourned sine die.

The House of Representatives’ version of House Bill 11376, which proposes to increase the minimum wage by P200 per day, has been approved on third and final reading. The Senate had passed a counterpart bill proposing a P100/day minimum wage hike last year. Yet, the proposed bill failed go through a bicameral conference committee (bicam) to compromise and draft a final version of the bill.

Particularly jittery from the wage increase are retail and quick service restaurants like Puregold and Jollibee Foods Corp. where manpower costs account for 12.7 percent and 17.7 percent of operating costs, respectively. AP Securities forecasts show that a wage hike bill could bring the percentages closer to 15 percent and 20 percent for the two companies which means an increase in operating costs and a contraction in operating margins.

JFC would see a bigger contraction in margins while their target market does not directly benefit from the legislated wage hike.