It all started when consumers complained about the price of garlic shooting up to nearly P300 a kilo in public markets. Days later, the prices of certain food items—rice, sugar, chicken, pork, even ginger—began rising. Starting today (Tuesday), the prices of several milk brands are likewise going up by 8 percent, as approved by the Department of Trade and Industry (DTI), which is also studying a petition from manufacturers to raise the prices of canned goods.
President Aquino had initially downplayed the increase in rice prices, arguing that the higher cost of well-milled rice (which is more expensive than that sold by the state-owned National Food Authority) affected only a minority of the population. At week’s end, however, he directed the DTI and the Departments of Justice and of Agriculture (DA) to go after hoarders and profiteers who have been causing the spiral in the prices of basic goods.
In an effort to appease consumer discontent, the government, through the DA, has deployed rolling stores to parts of Metro Manila selling local garlic at P100-P200 a kilo and other basic stuff. And the DTI has started investigating retailers and suppliers for possible profiteering and hoarding of essential commodities.
There are other ways to address the increasing costs of living. One obvious but difficult to implement measure is to beef up the purchasing power of consumers through higher wages. The Trade Union Congress of the Philippines was quick to react to the situation and last week called for the passage of the wage hike bill pending in Congress. Labor leader and former senator Ernesto Herrera was reported as saying that this would allow workers, particularly minimum-wage earners, to cope with the soaring prices. Food is estimated to take up as much as three-fourths of a minimum-wage earner’s income. “Amid the surge in consumer prices, we urge both the House of Representatives and the Senate to give the highest priority to the passage of new legislation that would help ease the troubles of wage earners,” Herrera said. A pending proposal is House Bill No. 254, filed by Anakpawis Rep. Fernando Hicap, seeking an across-the-board wage increase of P125 nationwide.
Another obvious but difficult move is for the government to lower the income tax on ordinary workers to increase their take-home pay. Postponing the impending P5 fare increase for Light Rail Transit Lines 1 and 2 and Metro Rail Transit Line 3 may also ease the financial burden of workers who use the public transport system.
To be sure, legislating a wage increase at this time can be a tough call. The last adjustment in minimum wages was the P15-a-day increase approved in September 2013 that took effect last January. It was the 12th increase in wages in the past 14 years, with the total amount of adjustment at P268 a day for those 14 years. The minimum daily wage in Metro Manila now stands at P466.
If legislating wage increases will be truly difficult, why can’t private-sector employers—or at least those with the resources—raise their workers’ salaries on their own? Last week it was reported that Ikea, the Swedish firm known worldwide for its build-it-yourself home furnishings, had announced that it would raise the minimum wage of its retail workers in its US operations by an average 17 percent starting in 2015. Ikea said the increase would be based on a living-wage calculator that takes into consideration housing, food, medical and transportation costs, plus annual taxes. The firm is going ahead on its own and not awaiting the outcome of an ongoing national debate about the minimum wage in the United States.
Locally, private-sector employers, especially those that have been reporting robust growth in net profits, can take a leaf from Ikea and adjust the wages of their ordinary workers, or provide additional living allowances. Instead of waiting for the government to mandate a wage increase, they can tap into their sense of social responsibility and compassion and themselves ease the financial burden of their workers. As it is, consumers have been waiting in vain for the government to bring basic prices back to previous levels, or for it to just halt this never-ending price spiral.