The Mindanao Development Authority (MinDA) has pushed for higher wages and better incentives to companies that want to operate in rural areas and make these at par with those levels in the urban centers..
In a press statement Thursday, the agency said the proposal is to support and ensure the success of the “Balik Probinsya” initiative of Sen. Christopher Lawrence T. Go.
The proposal was included in the action plan that the agency submitted to the Office of the President and that of Go, who pushed for it as part of mitigating the long-term impact of the coronavirus disease 2019 (Covid-19) on the country.
Secretary Emmanuel F. Piñol, MinDA chair, said that there is a need to increase wages in the rural areas because “personally, I see this discriminatory wage rate (whose constitutionality could be challenged) as one of the reasons why many job seekers flock to the urban centers.”
In reaction to the proposal, John Carlo B. Tria, president of the Davao City Chamber of Commerce and Industry, said any proposal “to raise wage rates can be studied further.”
On incentives, Tria said discussion of the issue will be hastened if the Fiscal Incentives Review Board under the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which is still under congressional discussion, is established.
With the establishment of the board, “incentives can be developed to achieve the intended purpose of bringing industry to regions other than existing industrial centers so that essential industries producing goods like soap, toothpaste, textiles for local consumption in the Visayas and Mindanao can be established.”
“This is because, I believe current incentives such as those provided by PEZA (Philippine Economic Zone Authority) are generally applied to export oriented industries in accordance with the PEZA Law of 1994 and the Presidential Decree 66 in 1972 establishing EPZA (Export Processing Zone Authority),” he said.
Tria also pushed for the setting up of key infrastructure facilities like cold storage and the improvement of ports and airports as these are necessary in the logistical aspect of production. “These can all create the local employment that can drive the Balik Probinsya (program),” he said.
On wages, Piñol’s statement supported the earlier statement of Mr. Go who said he “cannot understand why rural workers should receive lower salaries than those who work in the cities.”
In the Philippines, minimum wages are determined by the Regional Tripartite Wages and Productivity Board, a body composed of representatives from labor, management and government. The body either receives petitions for minimum wage adjustment and rules on it, or can on its own adjust the wages dependent on the supervening circumstances.
If levels of minimum wages in the rural areas are increased and incentives for companies are provided in locating in these areas, Mr. Piñol explained, workers will not look for opportunities in the urban centers, but some of them might return to rural areas where they came from.
He said the situation will become better because even as workers are working in the companies, they can also help produce food on the side.
On the part of the companies, because they are located in rural areas where raw materials for their production come, he added, it would reduce their operational costs and boost their incomes.
The statement said the agency has pushed for a legislative action on the proposal as well as creating a body for its implementation.
Even before a law is passed, he added that what must be done is to establish an order that would establish the National Framework for the Balik Probinsya Program and ensure that national government agencies support the initiative so it could take off.
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