Philippine hotels brace for hefty wage hike

Hotels in the Philippines are bracing for the impact of the proposed 100 pesos (US$1.78) hike in the daily minimum wage of private sector workers, a bill unanimously approved by the Philippine Senate with a twin bill under consideration by the Congress.

Benito Bengzon Jr, executive director of the Philippine Hotel Owners Association – one of the many groups that formally oppose the legislated wake hike – said it will impact particularly the micro and small enterprises, with some people being displaced.

Benito Bengzon Jr, third from left, said the wage hike will have most impact on the micro and small enterprises

“(However) we really like to look at it from a legal perspective. There’s already a legal and working mechanism that has been in place for a very long time… that studies and recommends wage hikes for each and every region in the country,” he said at the recent Hotel + Accommodation Industry Summit Philippines.

Bengzon pointed out: “The Regional Tripartite Wages and Productivity Boards is under the law, and regional tripartite boards just recently granted wage hikes in different regions.”

Economists said the proposed hefty wage hike – an additional manpower cost to hotels to the tune of about US$600 per employee per year – will make businesses raise their prices or reduce manpower, causing higher inflation and interest rates that will penalise the poor that the proposed bill purports to help.

At the same Industry Summit, Eugene Yap, president of Hotel Restaurant Association of the Philippines and general manager of Bayview Park Hotel Manila, foresaw a “wage distortion” from the proposed wage hike as the salaries of employees receiving higher pay will have to be adjusted.

Saying that the 100 pesos wage hike is just applied to businesses “with no added value equivalent” to businesses and their clients, Yap said they will have to look at how to raise their prices without pricing themselves out of the market, turning to foreign and other markets capable of absorbing or covering up the legislated wage hike.

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