The National Economic and Development Authority (NEDA) said a legislated across-the-board wage hike would be very harmful to the Philippine economy in the longer term.
NEDA Secretary Arsenio M. Balisacan said raising wages for workers nationwide is not the appropriate measure to soften the impact of higher consumer prices on Filipinos households.
“It is very harmful to the economy in the longer term and even for labor,” Balisacans said during the House briefing of the Development and Budget Coordination Committee Tuesday.
Balisacan said increasing the mandated wages would discourage investors to do business in the country.
He added that it will also make exports more expensive, or less competitive in the international market.
Instead of increasing wages, Balisacan told lawmakers that the Philippines should work on ways to increase demand for labor.
“If wages are forced to increase by legislation, and not because the demand for labor is high compared to the supply of labor, then the whole issue of competitiveness will hurt us.”
NEDA Secretary Arsenio M. Balisacan
Balisacan asked “if we just rise not because of productivity, how can we export? How can our products become competitive in the international market? And if we cannot export, how can we increase the level of economic activity? Where will the labor be employed?”
These are concerns that the Philippine Development Plan wants to address, Balisacan said.
“The plan of this administration is to address this very low productivity in agriculture, by investing in the right places like in irrigation, in farm-to-market roads, in technology and access tomarkets and so on, and not forcing increasing in wages by legislature,” Balisacan said.
“It does more harm to the economy in the longer term than it benefits,” he concluded.
