Uncategorized | (Re)Views, Voices, Alternatives

This is Part 2 of this blog’s recent post entitled “Why Philippine Wage Rates Should Be QUADRUPLED (A Statistics-Based Analysis).” 2bbx3x

As a positive contribution to workers’ demands for a significant wage hike, this post is aimed at answering the question “CAN BIG CORPORATIONS AFFORD TO INCREASE THE MINIMUM WAGE BY AT LEAST 238 PESOS PER DAY?”

Contrary to the Department of Labor and Employment (DOLE)’s claim that “hindi kaya ‘yan…” (“it can’t be done”), or the Employers Confederation of the Philippines (ECOP)’s pessimistic declaration that it’s “impossible,” WE EMPHASIZE THAT THE ANSWER IS YES. YES, BIG CORPORATIONS CAN AFFORD TO INCREASE THE MINIMUM WAGE, and it won’t even greatly affect their profits.

The Makabayan Bloc in Congress has filed a bill mandating a 750-peso minimum wage – equivalent to a 238-peso increase for Metro Manila workers, and statistics back the logic and feasibility of their legislative piece.

On a macro-economic level, a logical approach to determining the feasibility of a wage hike is to analyze figures from the “2015 Annual Survey of Philippine Business and Industry (ASPBI) – Economy Wide for Establishment with Total Employment of 20 and Over: Preliminary Results” released by the Philippine Statistics Authority just this April 2018.

As stated in the 2015 ASPBI, establishments with total employment of 20 and over accumulated incomes totalling 12.7 trillion pesos and expenses pegged at 11.0 trillion – resulting to a total profit of 1.7 trillion pesos. These businesses employ 4,507,301 workers. Hence, if these employees are given a 238-peso, across-the-board wage hike, the total annual cost (13 months, including the mandatory 13^th month pay) is just 418,367,678,820 pesos (418 billion pesos – not even half a trillion pesos). As per the 2015 ASPBI, these corporations will still have a whopping total profit of nearly 1.3 billion pesos (1,281,632,321,180 pesos to be exact).

IBON Databank made a similar computation in support of a meaningful wage hike as early as 2011, pointing out that “The total cost of the proposed wage hike will only be Php135.6 billion which, subtracted from total profits, will still leave establishments with Php759.6 billion in profits.”

At the level of each corporation, the DOLE, the Securities and Exchange Commission, the Bureau of Internal Revenue (BIR) and other government agencies can right away prove the feasibility of a legislated wage hike, as they have a quick and unhampered access to corporate income data.

To help encourage DOLE and other agencies to do the aforementioned task, we provide a sample computation in this post. The computation below used the same flat rate for all the contractual workers of some firms, for lack of data on regional breakdowns of the number of workers per firm and considering that most if not all contractual workers are minimum wage earners. The companies listed are from the DOLE’s list of firms with the highest concentration of contractual workers. Companies with no publicly available data on profits as of this writing were not included. For firms with mother units, net profit of the mother units were utilized, as no other data is available publicly.

Company	Remaining Company Profits after 238-peso daily minimum wage increase	Number of Employees	Cost of salary increase (for 13 months @238 pesos per day/worker)	Company net profit in 2017 (unless otherwise specified)
34,740 Establishments in the 2015 ASPBI	1,281,632,321,180	4,507,301	4.18368E+11	1,700,000,000,000 (2015)
Jollibee	5,620,412,800	14,960	1,388,587,200	7,009,000,000
PLDT	12,628,665,800	8,310	771,334,200	13,400,000,000
General Tuna Corp. (subsidiary of Century Pacific Food)	2,065,850,880	5,216	484,149,120	2,550,000,000
Sumi Phils. Wiring Systems Corp. (owned by Sumitomo)	50,063,203,900	4,305	399,590,100	50,462,794,000 (2016)
Furukuwa (member of the Furukawa Electric Group,)	8,229,512,340	2,863	265,743,660	8,495,256,000
Magnolia Inc. (part of San Miguel Purefoods)	6,691,340,640	2,248	208,659,360	6,900,000,000
Hinatuan Mining Corp. (owned by Nickel Asia Corp.)	1,814,712,140	1,673	155,287,860	1,970,000,000 (2016)
Brother Industries Ph. (part of Brother Group)	22,778,392,595	1,582	146,841,240	22,925,233,835
DOLE-Stanfilco (part of DOLE Food Company)	2,153,595,580	1,131	104,979,420	2,258,575,000 (2016)