Major business groups appealed to the House of Representatives to think twice about legislating a P200 per day pay hike, saying the bill’s passage will cause inflation to surge further, and urging lawmakers to leave wage determinations to the Regional Tripartite Wages and Productivity Boards (RTWPBs).
“We view the legislation of a national minimum wage hike with significant concern,” said Philippine Chamber of Commerce and Industry (PCCI) President Enunina Mangio.
She pointed out that RTWPBs, composed of representatives from business, labor, and government, were established to set region-specific wage rates based on local cost of living and other factors.
“A blanket national minimum wage does not take into account the differences in the cost of living across regions as well as the unique needs of businesses based on specific industry, location, and type of labor they need. This could lead to business inefficiency and stagnation,” she explained.
“MSMEs [Micro, Small, and Medium-Sized Enterprises] are already operating with tight profit margins. This mandated wage increase will force small businesses to shoulder higher payroll expenses, and for many, especially in low-margin sectors like retail, hospitality, and agri-food, they will be forced to pass these costs onto consumers,” Mangio added.
She emphasized that the inflationary impact of a significant wage hike could diminish the intended benefits by eroding purchasing power and potentially reducing job opportunities.
Similarly, Employers’ Confederation of the Philippines (ECOP) president Sergio Ortiz-Luis, Jr. said a P200 per day wage hike will cost employers in the formal sector an estimated P8.4 billion daily.
He explained that in order to absorb the sudden increase in their workers’ salaries, businesses have no other option but to pass the added cost on to consumers, which, in turn, will inevitably translate to higher inflation.
Ortiz-Luis also noted that many businesses, particularly the smaller ones, may not be capable of paying the additional 30 percent increment in their employees’ salaries.
The business leader pointed out that up to 90 percent of local businesses fall into the “micro” category while some 8 percent are considered “small” firms.
“Any legislated wage hike can only benefit workers in the formal sector, which constitutes only about 16 percent of the country’s 52-million-strong workforce. Meanwhile, the informal sector… the farmers, fishermen, vendors, among others, will not receive a pay hike but they too will have to deal with the inflation surge that will come as a consequence to the P200 [per day] wage increase,” Ortiz-Luis said in a mixture of Filipino and English.
However, Assistant Minority Leader and Gabriela Women’s Party Rep. Arlene Brosas sought to debunk claims of business groups that the proposed P200 daily wage increase will do more harm than good, emphasizing that historical evidence shows wage increases do not lead to significant job losses or economic downturn.
“These business groups are recycling the same old arguments against wage increases, but the facts tell a different story. Previous wage hikes did not cause massive layoffs or business closures,” Brosas said, as she rallied behind Speaker Ferdinand Martin G. Romualdez’s push for a P200 wage hike.
The lawmaker cited that the combined net income of the top 1,000 corporations in the Philippines saw a 7.2 percent increase in combined revenues to P17.8 trillion in 2023, showing their capacity to implement wage increases.
“The argument about losing competitiveness is a false narrative. Productivity has consistently increased while wages have remained stagnant,” Brosas emphasized.