NCR and Western Visayas wage hike takes effect June 3

A new minimum wage in the National Capital Region (NCR) and Western Visayas will be implemented next month, the Labor department said on Wednesday, adding that workers in three other regions will soon see higher take-home pay.

The P33 wage hike in Metro Manila and the P55-P100 increase in Western Visayas will take effect on June 3 after their separate wage orders were affirmed by the National Wages and Productivity Commission (NWPC), the Department of Labor and Employment (DoLE) said in a statement.

DoLE said the wage boards in Ilocos, Cagayan Valley, and Caraga have also issued orders increasing minimum wages in these regions.

The Ilocos Region’s wage board approved hikes ranging from P60-P90, bringing the minimum wage rate in the region to P372-P400 from P282-P340 previously.

The wage board in Ilocos also issued an order “granting P500 and P1,500 monthly wage increases for domestic workers in cities and first-class municipalities and for other municipalities, respectively, bringing the new monthly wage rate to P5,000,” DoLE said.

The labor agency said after the implementation of the P50-P75 wage hikes in Cagayan Valley, which will be implemented in two to three tranches, the minimum wage rate in the region will range from P400-P420 from P345-P370 previously.

DoLE said the minimum wage in Caraga Region in southern Philippines will be raised to P350 after its wage board “integrated the P15 cost of living allowance to the P305 basic salary under the previous wage order and granted a P30-wage increase.”

“The new daily minimum wage rate of P350 shall take effect upon the effectivity of the wage order for private establishments and their workers in Butuan City and the provinces of Agusan del Norte, Agusan del Sur, and Surigao del Sur,” DoLE said.

“However, for private establishments and their workers in the provinces of Dinagat Islands and Surigao del Norte, including Siargao Islands, the wage increase of P20 shall take effect upon the effectivity of the wage order and another P10 shall take effect on Sept. 1, 2022,” it added.

DoLE said the new wage orders will be submitted to the NWPC for review and shall take effect fifteen days after publication in a newspaper of regional circulation.

The agency said retail and service establishments regularly employing not more than 10 workers and establishments affected by natural calamities and/or human-induced disasters, including the pandemic, may apply for exemption from compliance with the issued wage orders.

Source: BusinessWorld

Trouble in China seen slowing down PH growth in 2022

A slowing Chinese economy would add to high inflation as another obstacle to the Philippines’ recovery going full steam ahead this year, UK-based think tank Oxford Economics said.

“Looking ahead, we expect growth to remain robust, but external headwinds are mounting. Recent lockdowns in China will cloud the outlook for goods exports as China is one of the Philippines’ main trading partners,” Oxford Economics assistant economist Makoto Tsuchiya said in a report last week, after the government reported the stronger-than-expected first-quarter gross domestic product (GDP) growth of 8.3 percent.

In particular, “China’s growth slowdown will lead to lower demand for the Philippines’ exports and worsen the global supply chain disruptions,” Tsuchiya said.

“Related supply chain disruptions could be damaging to the manufacturing sector, which accounts for about 20 percent of GDP,” Tsuchiya noted in an earlier email to the Inquirer.

The latest government data showed that from January to March 2022, China was the Philippines’ second-biggest export destination, next only to the United States. Sales of Philippine-made goods to mainland China amounted to $2.88 billion in the first quarter, up 12.3 percent year-on-year.

China was also the Philippines’ top source of imports with a larger $6.1-billion worth or nearly a fifth of the three-month total, although 2.9-percent smaller than a year ago. As such, China remained the Philippines’ top trading partner during the first three months.

Stringent lockdowns

While China had been able to contain COVID-19 at the start of the pandemic, it was currently struggling and recently reverted many major cities and ports to stringent lockdowns under its “zero-COVID” policy.

Besides the spillover impact of China’s economic slowdown, Tsuchiya said that “domestically, higher inflation will squeeze real income and weigh on household spending.”

April headline inflation surged to a 40-month high of 4.9 percent year-on-year due to expensive food and fuel, and the Bangko Sentral ng Pilipinas (BSP) xpects the rate of increase in prices of basic commodities to average 4.3 percent this year—above the 2 to 4 percent target range of manageable price hikes conducive to economic growth.

Despite these twin challenges, Tsuchiya said that “further reopening of the economy will bolster sentiment and support growth this year, while the resumption of international tourism will bolster service exports.”

As such, Tsuchiya said Oxford Economics would hike its full-year 2022 GDP growth forecast for the Philippines, from 6.7 percent previously, which was below the government’s 7 to 9 percent goal.

Source: Business Inquirer

Philippine’s GDP growth goes past forecast

The Philippines’ economy grew faster than the projection in the first quarter, raising speculation of interest rate hikes to combat growing inflation. It is a crucial concern that the country’s newly-elected President Ferdinand Marcos Jr is facing.

The Southeast Asian country’s gross domestic product (GDP) increased by 8.3% year-over-year in January-March, exceeding expectations and outpacing the previous quarter’s 7.7% growth.

The growth was indeed been the fastest since the second quarter of 2021 when it hit 12.1%.

The Bangko Sentral ng Pilipinas (BSP), the country’s central bank, will be meeting on May 19 amid increased anticipation of an interest rate hike to curb rising prices. It has recently been left unchecked, which in turn might endanger the economy.

Nicholas Mapa, senior executive for the Philippines at ING said that this strong recovery of the economy with the above-target inflation points to policy normalization from the Bangko Sentral ng Pilipinas.

He further said that the Philippines BSP Governor Diokno has been keeping the rates unchanged so as to help support the recovery of the economy. However, with the GDP now back to pre-COVID-19 levels, along with the inflation accelerating.

It is expected that BSP will hike policy rates during the May 19 meeting. It also expects the average for the full year to hit 4.3% but predicts that the inflation will ease to the given target in 2023.

Ferdinand Marcos Jr will be taking over the presidency in June after the end of the 6-year term of Rodrigo Duterte.

Source: Global Business Outlook