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CEBU exporters are appealing for a freeze in pay levels in their sector until they have recovered from the economic slowdown.

Philexport Cebu executive director Fred Escalona said the government needs to carefully evaluate the performances of each industry before giving in to the P90-125 wage hike petition of labor groups. He said a wage order will take effect across all industries.

“It will be unfair considering that sectors and industries have different
performances,” Escalona said.

He said the manufacturing sector continues to contract following the 2008 global economic slowdown while the outsourcing sector has consistently grown.

“After the huge rebound in 2010 coming from the global recession of 2008 to 2009, the export performance of the country contracted by 6.9 percent in 2011, mainly due to the faltering recovery in the US and the debt crisis in the eurozone,” Philexport-Cebu said.

The hardest hit sector was the manufacturing sector based on PMI (Purchasing Managers’ Index). Similar to the Philippines, the export sector of countries in the eurozone and in Japan, Australia, Brazil, Taiwan and South Korea are also contracting.


In a position paper, Philexport-Cebu appealed for a “wage freeze” for the export sector until such time the recovery in the sector is imminent and sustainable.

“We are fully sympathetic to the plight of workers, due to the sharp rise in the cost of living. But it is also in the interest and survival of these workers that we ensure as well our own survival as their employers,” the exporters said.

Philexport-Cebu said that although economic managers see better prospects for the
export industry this year, many exporters are still cynical considering that economic indicators are still lower than markets expectations.

“Despite the United States’ stabilization and stimulus packages, there are no evident
or convincing indicators as yet that came out showing any positive impact on the US’s jobs and housing numbers” the exporters said in their position paper.

The exporters also named the instability in the Middle East, the sharp rise in crude oil prices, the debt crisis in the eurozone and the strong peso as among other challenges faced by the sector.


Any wage increase will endanger the employment and livelihood opportunities of direct and indirect employees, said Philexport president Sergio Ortiz-Luis Jr.

Philexport suggested that instead of increasing wages, the government can consider the proposed 50 percent VAT reduction on oil to create a positive ripple effect through the supply chain; approve the amendments of the Productivity Incentives Act with proper stakeholder consultation; and promote an environment that is conducive for investments to flow and thrive.

Published in the Sun.Star Cebu newspaper on April 27, 2012.

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