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Wage boards briefed on impact of TRAIN law

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laborer worker

By Gillian M. Cortez

THE National Wages and Productivity Commission (NWPC) said regional wage boards have been briefed about the impact of tax reform by key government agencies, which provided data that the boards are expected to consider when they rule on wage petitions.

The NWPC invited representatives from the 17 Regional Tripartite Wage and Productivity Boards (RTWPBs) along with those from the Bangko Sentral ng Pilipinas (BSP), National Economic and Development Authority (NEDA), Department of Trade and Industry (DTI), Department of Finance (DoF), Department of Energy (DoE), Land Transportation Franchising and Regulatory Board (LTFRB) and Department of Agriculture (DA).

NWPC Executive Director Maria Criselda R. Sy said: “Right now, based on the results of the June 5 meeting, they were given enough inputs from NEDA, BSP, DTI, Department of Energy, and some other speakers we invited. They were given a complete scenario of what is actually happening.”

The government has consistently downplayed the impact of tax reform on inflation, citing instead the effects of weaker emerging market currencies and higher global oil prices. Economic managers have also said that they expect inflation to level off in the rest of the year after it breached the official target band of 2-4%. They now see 2018 inflation averaging 4.6%.

The central bank assumes wage hikes of P18-20 for planning purposes, based on an assessment of previously approved wage hikes, which is well below some of the amounts being sought by labor groups.

Tax reform legislation that came into effect this year is known by the acronym TRAIN, or Tax Reform for Acceleration and Inclusion, which has been blamed for eroding the purchasing power of workers.

“The NEDA presented growth prospects for this year and the next few years. In the case of DTI, we asked them to present the results of their price monitoring. BSP provided us with the inflation outlook until the end of the year and until 2019. DoF provided an update on TRAIN and inflation and DA gave us an update on the movement of supply and prices of food. So all of those inputs will help the board members when they go back to their regions,” Ms. Sy said.

Each regional board is authorized to conduct its own assessment of the socioeconomic conditions within its jurisdiction when considering petitions for wage hikes.

“Inflation is one of the indicators that we monitor as it needs to be considered in the setting of the minimum wage — but that’s just another aspect. There are some other factors to consider in setting the minimum wage,” Ms. Sy said.

NWPC said in three of the four regions (the National Capital Region, Region VI or Western Visayas, and Region VII or Central Visayas) that received a wage hike petition, labor groups cited the impact of the TRAIN law and inflation. Region XI (Davao) received a petition that did not directly blame the TRAIN law and inflation, though it did cite the increasing cost of living.

A petition for a P175 wage increase was received by the NCR wage board, which was filed by the Association of Minimum Wage Earners and Advocates — Philippine Trade and General Workers Organization (AMWEA-PTGWO), and was denied.

“It was filed out of time because the previous wage order was less than one year old,” she said, adding that AMWEA-PTGWO filed a petition earlier this year. NCR’s last wage order was issued in October.

Western Visayas, Central Visayas, and Davao Region are among the six regions where new wage orders are considered possible because of the one-year rule.