Rising inflation already cut workers’ purchasing power by 30%–labor group

Following the recent hikes in prices of basic commodities last month, workers in Metro Manila now have considerably less consuming power given their current salaries, according to a labor group.

Citing the result of its wage monitoring, the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said the purchasing power of daily minimum wage in National Capital Region (NCR) fell by 30 percent, from P512 to P360.31 a day.

“In sum, workers lose a total of P3,943.94 a month to inflation. With this amount, a family can buy additional food needed for them to stay healthy in our society and remain productive citizen in nation-building,” ALU-TUCP Spokesman Alan Tanjusay said in a statement.

ALU-TUCP attributed the price surge to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which exempted more people from paying income taxes; imposed taxes on sugary drinks; and raised taxes for automobile, petroleum and other products.

The Department of Finance (DOF) said it is still too early to see the impact of TRAIN on inflation “unless merchants took advantage of the law.”

However, in the long run, the Bangko Sentral ng Pilipinas said TRAIN and higher global oil prices will affect the country’s inflation rate. Last week it raised its average inflation-rate projection for the year from 3.4 percent to 4.3 percent because of the said factors.

But, instead of raising its usual wage-hike petition, ALU-TUCP reiterated its call on the government to implement its P500 proposed subsidy for the estimated 4 million minimum-wage earners nationwide “to help them cope with rising cost of living.”

Despite the government’s economic advisers having already expressed their opposition against the subsidy, the proposal will be reviewed by a small working group comprised of four representatives from the Cabinet and four representatives from the ALU-TUCP
next month.

“During a dialogue with labor groups last Wednesday, the President ordered the creation of a small working group,” Tanjusay said.

The representatives from the government in the working group will come from the departments of Finance, Energy, Labor and Employment and the Budget and Management.

Aside from the subsidy, the group will also discuss the possibility of lowering electricity costs during its meeting scheduled on March 15.

Tanjusay said the recent inflation reports should compel the government to fast-track the assessment of their proposal so it could serve as a safety net for workers vulnerable to the impact of TRAIN. - By Samuel P. Medenilla