Latest news with #WageRationalizationAct
The Star
2 days ago
- Business
- The Star
Killing of P200 pay hike bill also kills bid for living wage in Philippines
MANILA: To have a basic but decent standard of living, a local think tank stressed the need for a P1,217 (US$21) living wage in Metro Manila, where most workers are compelled to make do with a minimum wage of P608 to P645. Outside Metro Manila, the minimum wage is also way lower than the P872 to P2,030 living wage, which Ibon Foundation computed based on the government's wage and inflation data. This was the reason that the proposed P100 or P200 wage hike would have been an important step toward a living wage, not only in Metro Manila but all over the Philippines, the think tank said. It pointed this out as 'minimum wage earners will feel immediate benefits and should be able to look forward to a living wage that actually raises their families' standard of living to a decent level.' But since the 19th Congress ended without the Senate and House of Representatives agreeing on how much the wage hike should be, workers will not have anything to expect, not even P50. The P100 wage hike proposal in the Senate was approved last year, Feb 19, while the House of Representatives approved its bill, proposing a P200 wage hike, on June 5. It would have been the first legislated wage hike since 1989, when the Wage Rationalization Act was signed and created the Regional Tripartite Wages and Productivity Boards. But Senate President Francis 'Chiz' Escudero said House Bill No. 11376 and Senate Bill No. 2534 were not a priority of the Legislative Executive Development Advisory Council. Last year, President Ferdinand Marcos Jr., declining to certify the bills as urgent, asked the Regional Tripartite Wages and Productivity Boards to initiate a review of minimum wages. The regional boards in Metro Manila, Cordillera Administrative Region and Mimaropa, among others, approved wage hikes, but only worth P35 to P40, effective last year. 'As pointed out by the government's economic managers, an across-the-board wage hike could have 'dangerous repercussions' on the economy, saying that it could lead to higher inflation, and even jobless rates. They stated on June 11, a few days after the House of Representatives approved its bill, that a P200 increase could raise inflation by two percentage points, while a P100 hike may lead to an increase of 0.7 percentage points. Likewise, they estimated that a P200 wage hike would lead to a 0.6 percentage points increase in joblessness, and a 0.2 percentage points increase if the wage hike is P200. This, as MSMEs, or micro, small and medium enterprises, which constitute over 90 per cent of all businesses, and who considerably depend on minimum wage workers, 'may struggle.' The proposed wage hike, they said, may lead, as well, to higher production costs, which could result in higher prices that may disproportionately affect low-income households. But for Ibon Foundation, the government can intervene if it is concerned about MSMEs that could not shell out an additional P2,000 to P4,000 for every worker a month. It said 'contrary to government misgivings and employer complaints, a P200 wage hike is feasible and takes up just a small portion of company profits: 11.1 percent for large; 9.1 per cent for medium, and 12.9 per cent for small businesses.' A wage hike of P200 would be 15 per cent of the profit of micro businesses. Ibon Foundation stressed that any large increase in minimum wage would bring 'substantial relief to wage earners and their families by increasing the households' purchasing power.' 'Wage hikes also help boost the informal economy, where workers spend their earnings, and overall they are a strong driver of economic activity and more inclusive growth,' it said. - Philippine Daily Inquirer/ANN
Filipino Times
09-06-2025
- Business
- Filipino Times
Business groups warn P200 wage hike may hurt MSMEs, push layoffs
Business leaders and industry groups are urging lawmakers to reassess the proposed P200 daily wage increase approved by the House of Representatives, warning of dire consequences for micro, small, and medium enterprises (MSMEs), as well as the broader economy. In a statement released Sunday, the Management Association of the Philippines (MAP) said it supports measures to improve the welfare of minimum-wage earners, but cautioned that a legislated P200 increase could do more harm than good. 'We call on the bicameral conference committee to conduct further consultations with all affected sectors, like employers, employees, consumers, and government agencies before reaching a decision,' MAP said. The group emphasized the importance of considering inflation and business sustainability in policymaking, especially as many MSMEs are still struggling to recover from recent economic disruptions. 'Our basic problem is not low wages, but high costs. We urge the government to focus on reducing food, power, transportation, and housing costs to make our country more competitive,' it added. The MAP also called on employers to share the burden, urging businesses to help workers by covering mandatory contributions and sharing at least 20% of their net income before tax. The Philippine Retailers Association (PRA) echoed the concerns, warning that a mandated P200 daily wage hike could trigger layoffs, particularly in the MSME segment that comprises around 70% of retail employment. 'This will cause layoffs in the retail sector,' said PRA president Roberto Claudio, noting that salary distortions across company hierarchies could force businesses to increase pay beyond minimum-wage levels. The group reiterated its support for the Philippine Chamber of Commerce and Industry's (PCCI) position to leave wage adjustments to the Regional Tripartite Wages and Productivity Boards, which are mandated to assess economic conditions across regions. The Federation of Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII) also raised concerns over a one-size-fits-all approach to wage increases. 'We respectfully urge policymakers to consider a more balanced, consultative, and region-sensitive approach in determining wage adjustments,' said FFCCCII president Victor Lim. Last week, the House of Representatives approved House Bill No. 11376 on third and final reading, with 171 affirmative votes and only one dissenting. The bill mandates a P200 daily increase for all minimum wage workers in the private sector, regardless of employment status or industry. The bill also retains the authority of the Regional Tripartite Wages and Productivity Boards to implement additional increases as needed, under the existing Wage Rationalization Act. The Senate is expected to deliberate on the measure soon, with growing calls from the business community for a more deliberative and regionally responsive process.
