MANILA,  September 7, 2004
By Marvin Sy - Malacañang turned down yesterday proposals for the grant of a wage increase at this time, saying such a move will result in closure of businesses and more workers losing their jobs.

In an interview over Radio Mindanao Network, Presidential Spokesman Ignacio Bunye appealed to workers to understand the current economic situation and its adverse effects on business.

He said the government sympathizes with the plight of the workers but stressed a wage hike at this point could be counterproductive.

"We sympathize with our workers but I think that these petitions are untimely because the companies are also experiencing difficulties," Bunye said in Filipino.

Labor groups have been demanding a P125 average increase per day, or an across-the-board increase of around P3,000 a month.

The wage hike demand has been pressed as labor groups pointed out the rising cost of fuel, goods and basic commodities.

The threat of a runaway budget deficit also prompted President Arroyo to admit publicly that the country is on the verge of a fiscal crisis.

This made Malacañang push for the enactment of eight tax revenue proposals by Congress and an extensive national austerity program.

Late last month, Mrs. Arroyo acknowledged for the first time that the Philippines was in a "fiscal crisis," as economists warned the country faced an Argentinean-style economic crisis in two to three years unless a widening public sector deficit and ballooning debt problem were brought under control.

The Arroyo administration has been repeatedly denying the country is in a state of fiscal crisis following statements made early this year by former secretary Jose Isidro Camacho right after he left the Department of Finance.

Bunye argued that if a wage hike is granted at this time, more businesses cannot afford the increase and will be prompted to lay off some of their workers.

"The alternative is that a number of the companies might be forced to close if they (workers) insist on this type of increase. But we really sympathize with the plight of our workers," he said.

Bunye pointed out the government is working on ways to minimize the impact on workers by maintaining the supply of basic commodities to prevent further increase in prices.

Bunye noted that the pressure from distributors and suppliers of basic commodities is strong but the government, through the Department of Trade and Industry, has been coordinating its efforts with the private sector to ensure the continued supply of basic commodities and keep prices stable.

Bunye earlier declared the government is not keen in granting wage hike demands by government workers, citing the "abnormal situation" the country is in.

Last Tuesday, the President issued an administrative order outlining the austerity measures to be implemented in all government offices.

Among these measures are substituting overtime pay with additional days off and suspending additional benefits to officials and employees.

Some government employees have asked Malacañang to exempt them from the austerity program, arguing that only their superiors could afford to sacrifice overtime pay and additional benefits.

Bunye argued the austerity measures should apply to all levels because the government wants to instill the habit of saving in the entire bureaucracy.

The Palace has ostensibly set the tone for austerity by cutting the central air-conditioning system in four buildings at Malacañang, and the usual lavish meriendas of Cabinet officials have been reduced to biscuits and coffee or tea.

Congressmen have set in motion a national fund to shore up public coffers, and rich Chinese Filipino businessmen also vowed to pitch in. But the manner of disbursement of the accumulated monies has yet to be spelled out.

The government promised to generate six million jobs in the next six years, even as Mrs. Arroyo said there would be no sacred cows in her austerity measures, including cutting allotments for local government units that would affect foreign funding for countryside projects.

Credit ratings agency Moody’s Investors Service, however, said that the Philippines is not yet in a fiscal crisis, but was looking to the government to address problems by instituting bold reforms.


President Arroyo will speak on her China trip, and other current topics tomorrow morning at a special breakfast forum hosted by the Manila Overseas Press Club and jointly by the "Tuesday Club," it was announced by STAR publisher Max V. Soliven — who chairs both clubs — and MOPC president Tony Lopez, publisher/editor of BizNews Asia.

The forum will be held at 7:45 a.m. in the Ristorante La Dolce Fontana on Annapolis st., Greenhills, where the MOPC regularly meets weekly, but this time on Tuesday.

The Chief Executive is expected to discuss the $1-billion package obtained in Beijing, as well as electricity, oil pricing, ASEAN and Asia Pacific issues, her 10-point legacy program to alleviate poverty, jumpstart the economy, and the initiatives the Palace is undertaking to head off the unsettling "budget deficit."

The affair is being coordinated by MOPC Special Events chairman Babe Romualdez, STARGATE Publishing Corp. president and CEO, and co-moderator Syke Garcia of The Manila Times.

Tuesday Club vice-chairman Tony Katigbak has informed members that tomorrow’s forum will be in lieu of the Club meeting usually held in the EDSA Plaza Shangri-La.

Aside from MOPC board and the journalists, editors and associate members belonging to the country’s oldest press club (founded in 1944, during the war), other publishers and senior editors, members of the parallel Foreign Correspondents Association of the Philippines (FOCAP), and members of the diplomatic community, are invited and encouraged to attend this rare event.

Since seating is limited, it will be on a first-come, first-pay, first-served basis. Breakfast is no more than P140 per person. (For details, those interested may contact Dena of the MOPC Secretariat, at 523-1289, faxtel 523-1254, cell 0919-898-5892, or MOPC president Lopez (0917-831-8831).

Reported by: Sol Jose Vanzi

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