The Department of Labor and Employment (DOLE) is cautiously looking at petitions to increase the minimum wage rates in light of its potential effects on inflation, Labor Secretary Bienvenido Laguesma said on Saturday.
“We respect the workers’ request, but we are also looking at the realities and factors that need to be considered if another wage adjustment is implemented,” Laguesma told a GMA radio network.
“We are careful because this could also be inflationary,” he stressed.
Organized labor, specifically the Partido Manggagawa, pressed for a P100-across-the-board increase in minimum wage, saying the purchasing power of their income has diminished by at least P76 due to high prices of basic commodities.
Laguesma said DOLE’s regional directors, along with the Regional Tripartite Wages and Productivity Boards (RTWPBs), met on Thursday to discuss the latest developments that might necessitate another round of minimum wage adjustments.
Laguesma said the RTWPBs were looking at several factors pertinent to the workers’ demand, particularly the capacity of businesses to grant a wage increase, and the consumer price index.
Inflation hit 7.7 percent last month, reputedly the fastest in 14 years, driven by higher prices of food and non-alcoholic beverages during the month. In September, around 2.5 million Filipinos were unemployed.
The regional wage boards earlier this year approved an increase in the minimum wage in several regions, with the lowest in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) at P305, and the highest in Metro Manila with P570 as of October 2022.
Nonetheless, Laguesma said that apart from raising wages, the government can also extend subsidies to the minimum wage earners.
Laguesma has said the wage boards were under obligation to review the existing wage rates to “keep pace with whatever developments in the work sector.”
The DOLE has started to pitch the idea to the private sector regarding the issue. However, he noted that minimum wage adjustments could be implemented only once a year.
The last wage hikes were granted in 14 regions in June this year.
Increasing the daily take-home pay of minimum wage earners will be a “very tough balancing act,” Laguesma said, adding that small businesses were still reeling from the effects of the COVID-19 pandemic.
The DOLE chief said another wage increase may also have an adverse effect on the labor market.
Senator Risa Hontiveros, meanwhile, said Malacanang should work more closely with lawmakers for new laws and policies to increase workers’ wages and accelerate job creation across the country.
These moves, she said, will help Filipinos cope with runaway inflation.
While she welcomed the wage review order of the DOLE, the opposition senator emphasized that new laws on raising workers’ pay and speeding up the creation of gainful livelihood should be part of the new Common Legislative Agenda (CLA).
CLA bills are measures identified by both Malacanang and members of Congress as priority legislation via the Legislative-Executive Development Advisory Council (LEDAC).
Hontiveros said everyone is affected by inflation, but its worst effects are felt the most by low-wage earners, as well as freelance workers, or those who have lost their jobs or livelihood.
“The wages of workers should be increased. We must be more active in the creation of jobs in the entire country,” she also said.
Swift government response on those issues, the senator stated, is needed, through new laws or executive issuances.
Hontiveros explained that including wage hikes and job creation as part of the priority legislative agenda of the LEDAC ensures that these policy issues will receive immediate government attention and action.
She pointed out that the existing list of around 30 priority bills, as identified in a LEDAC meeting last October, does not include any new proposed laws that will directly raise workers’ pay or foster job creation.
In addition, Hontiveros said that government should also study the implications of proposed wage hikes on the situation of millions of workers in the micro, small and medium enterprises (MSMEs) sector, who are excluded by existing laws from the coverage of minimum wage regulations.
The senator added that while the unemployment rate dropped to 5 percent in September, the latest labor force survey showed a higher underemployment rate of 15.4 percent.