1 month ago
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The Philippine Chamber of Commerce and Industry (PCCI) is warning lawmakers about the severe consequences of the proposed ₱200 daily minimum wage hike, pointing out its inflationary effects and impact on micro, small, and medium-sized enterprises (MSMEs).
In a statement, PCCI President Enunina Mangio said the House of Representatives should leave the determination of wage hikes to the Regional Wage Boards (RWBs) instead of legislating a national wage increase.
“We view the legislation of a minimum wage hike with much concern,” Mangio said in a statement.
The House’s Committee on Labor and Employment recently approved a bill seeking to impose an across-the-board daily wage hike of P200 for workers in the private sector.
Lawmakers are pushing President Ferdinand “Bongbong” Marcos Jr. to certify the bill as urgent before Congress suspends sessions this week.
The PCCI, the country’s leading business organization, pointed out that an across-the-board wage increase fails to consider the cost of living across regions in the Philippines.
Mangio emphasized that the RWBs—comprised of business, labor, and government representatives—were specifically created to establish region-specific rates.
“Legislating a single wage for all areas can harm businesses in lower-cost regions and removes the flexibility of the RWBs to set wages that are aligned with the situation in the local areas,” he said.
If a wage hike is enacted, Mangio is expecting a sudden rise in business inefficiency and stagnation.
MSMEs, in particular, would face the brunt of the proposed wage increase with higher labor costs and, consequently, more costly goods and services for consumers.
“MSMEs are already operating on tight margins. The mandated wage hike will force these small enterprises to shoulder higher payroll expenses,” said Mangio.
“For some businesses, particularly those in low-margin industries like retail, hospitality, and agri-food, the wage increase forces them to pass on the cost to consumers,” he added.
In addition, the PCCI President warns of the wage hike’s inflationary effect which may further erode purchasing power and reduce jobs in the market. This essentially negates the intended benefit of the increase.
He said these unintended consequences will heavily impact informal sector workers who are not bound by a minimum wage.
According to government data, approximately 25 to 30 percent of the country’s total employed workforce—around 10 to 12 million—is in the formal sector.
Meanwhile, the informal sector accounts for nearly 50 percent or about 15 to 20 million of the total population of employed Filipinos.
At its worst, the PCCI said a legislated minimum wage hike will likely fail to provide long-term solutions for productivity and competitiveness in the market.
“Instead of legislating wages, our wage policy should have a comprehensive approach that balances the needs of workers with the capacity of businesses and ensures that MSMEs continue to thrive while still providing fair wages,” Mangio said.
“For wage policy to be meaningful, it should prioritize economic growth and stability, business productivity, secure and quality jobs, and real purchasing power for workers,” he continued.
