A PHP 200 wage hike proposal is gaining momentum in Congress. Speaker Martin Romualdez announced that the House is ready to receive the bill and send it to the Senate to help workers cope with the increase in the cost of living. However, the business community has expressed concern that it may lead to higher levels of inflation and job losses.
Labor organizations have been asking for an increase in the wage for a number of years. They claim that salaries have not kept up with the increase in the cost of food, housing, and transport. The last wage increase was legislated for 36 years ago. Most workers do not think that there is a need to wait for any longer.
After meeting with the labor leaders, Romualdez said that increasing the minimum wage may help families cope with the increased levels of inflation. He also noted that more money in the pockets of workers may stimulate consumer spending and, in turn, support economic growth.
Business Groups Push Back
The employers have strongly disagreed with the proposal. The Employers Confederation of the Philippines (Ecop) said that a legislated wage increase could end up being more detrimental than useful.
“This will make businesses more cautious,” said Ecop President Sergio Ortiz-Luis Jr. “We are already struggling to compete for investors compared to our neighbors.”
According to Ortiz-Luis, only 16% of workers that are in the formal sector will be affected by this. The remaining 84 per cent, who are farmers, drivers, and informal workers, may experience higher prices without a wage increase.
He also mentioned that businesses may add the labor costs to the prices of their products which will increase the levels of inflation. Some companies, he warned, could reduce employment or even cease operations.
Workers Say P200 Is Not Enough
The PHP 200 wage hike proposal was welcomed by the labor groups but said it is small. The members of the Makabayan bloc of lawmakers advocated for a PHP 750 increase across the board, saying that it would go a long way in addressing the needs of Filipino families today.
This is because the cost of living is a big issue. The year on year inflation rate rose to 2.9% in December from 2.5% in November. The costs of housing, food, and electricity are still on the rise.
The workers claimed that the current minimum wage does not allow them to meet their basic needs. The Metro Manila workers received a P35 wage increase in July 2024 and the daily minimum wage for non-agriculture workers was raised to P645. Many workers stated that this adjustment was not sufficient to make a significant difference.
The Trade Union Congress of the Philippines, the Federation of Free Workers, and Sentro ng mga Nagkakaisa at Progresibong Manggagawa joined in issuing a single statement. They described the PHP200 increase as a good starting point, but they demanded that Congress do more.
Marcos: Wage Hike Proposal Needs More Study
President Ferdinand Marcos Jr. expressed his opinion on the issue. He said that lawmakers have to know more about the consequences of a wage increase.
“As wages rise, some companies may have to lay off workers,” Marcos said. He stressed that small businesses could be the most affected.
The President noted that wage increases are normally recommended by the regional wage boards. These boards review the local living costs and allow for the increases. Marcos recommended that the lawmakers should not circumvent this process.
The wage boards, the House leaders said, are too slow to act. They said Congress has to act to quicken the process.
What Happens Next?
The bill has already been endorsed by the House Committee on Labor and Employment. The next step is for Congress to hold a thorough discussion about the matter. Workers are demanding quick action, but businesses are pushing back.
Now, the lawmakers must act. Do they accept the rise? Or will the worries about inflation dampen the proposal? There is a lot of controversy still.)
