P125 Wage Hike
Wage Setting by
Congressional Fiat
As if to spread good cheer for the Christmas season, the Lower House of Representatives approved on 20 December House Bill 345, which mandates an across-the-board salary increase of P125 per day for all private workers. It proposes to gradually increase salaries in three tranches: P45 in 2007, P40 in 2008, and P40 in 2009.
Authored by party-list representative Teodoro Casiño of Bayan Muna and sponsored on the floor by House committee on labor and employment chairman Roseller Barinaga of Zamboanga del Norte, the bill, in effect, disregards an existing law (RA 6727, or the Wage Rationalization Act of 1989) that stripped the legislature of its power to set wages.
The last legislated wage increase came in 1989. Later that year, RA 6727 created the Regional Tripartite Wages and Productivity Boards. Since then, the yearly adjustment of workers’ salaries has been discussed and set by the regional boards, composed of representatives from labor, management, and the labor department. The wage boards, which are more familiar with local conditions, labor productivity, and the cost of living in their respective regions, determine and adopt wage levels appropriate to their area of coverage.
Malacañang has expressed its reservations about a legislated across-the-board salary increase, saying that regional tripartite wage boards are still in a better position to determine wage hikes. The National Economic and Development Authority is evaluating the impact of this recent proposal by Congress.
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 The country’s gross international reserves rose for the 13th straight month, reaching a record high of US$23.0 billion as of end-2006. The foreign reserves level can finance 4.4 months’ worth of imports of goods and payments of services and income. The GIR could have been higher by US$292.0 million had the Bangko Sentral and national government not prepaid obligations to the IMF and Asian Development Bank.
Headline inflation slid for the 9th straight month, posting a 33-month low of 4.3% in December, as consumers enjoyed discounted fuel pump prices and transport fare rollbacks, thanks to an appreciating peso-dollar rate. Core inflation decreased for the 9th consecutive month, reaching a 32-month low of 4.6%. Food inflation fell to a 34-month low of 4.6% in December from 4.9% in November.
Net inflows of registered foreign portfolio investments rose 23.7% to US$2.6 billion in 2006 from US$2.1 billion in 2005. Inflows of foreign portfolio investments increased 45.1% to US$8.0 billion from US$5.5 billion, while outflows or capital repatriation of foreign portfolio investments grew 58.4% to US$5.4 billion from US$3.4 billion.
Overseas Filipino workers’ remittances rose 17.6% to US$11.4 billion in January to November from US$9.7 billion the previous year, close to breaching the Bangko Sentral’s yearend target of US$12.3 billion. According to the Philippine Overseas Employment Administration, the number of Filipino workers deployed abroad already reached one million as of November, growing 12.8% over last year’s level.
 Commercial bank lending grew 6.8% in end-November, down from 11.1% in end-October, but up from 2.1% a year ago. Financial institutions, real estate, and business services accounted for 32.1% of bank loans and posted the fastest bank-lending growth rate of 26.9% among the different economic activities. While manufacturing accounted for 23.2% of bank loans, bank lending to the sector shrank 8.1%.
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