Notwithstanding the across-the-board increase in the daily minimum wage, garments manufacturers are seeking, at least, a one-year exemption from the 2022 wage hike, given that many stakeholders are still reeling from the lack of opportunities during the pandemic.
The Confederation of Wearable Exporters of the Philippines (CONWEP) is asking for government support to defer the wage hike until the second quarter of 2023.
“The bottomline here is that wage increase is too high for specific regions like Region 3 where workers are asking for 10 percent increase and in Region 7 with proposals for 7 percent increase. We requested to defer at least a year so we can recover,” said CONWEP executive director Maritess Agoncillo.
Already, some factories in Cebu are considering to streamline operations that may cut employment, she added.
CONWEP’s data highlighted that almost 20,000 direct workers were displaced due to the global pandemic. Pre-pandemic, the sector employed 260,000 to 280,000workers.
Agoncillo stressed that the garments and wearable industry has barely recovered from the pandemic and with the rising inflation, growth forecast is reined at 5 to 6 percent, which is far lower than the wage hike demand from the regions where the industry has presence.
The industry, Agoncillo said, is wary of the P40 daily increase in Region 3, where many of the stakeholders are located, noting that the amount is almost at $1 threshold.
She noted the increase will put added pressure on manufacturers as they compete with exporters from Cambodia, Indonesia, Laos, and Vietnam.
“We are now at another standstill as we continue to price ourselves out of the global competitiveness structure,” she added.
On top of the wage hike, the industry also floated concerns about some practices at the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), consistent with concerns of other industries, that affect operational viability.