Business groups buck P200 legislated wage hike

MANILA, Philippines —  Business organizations yesterday expressed their opposition to the proposed legislated P200 across-the-board daily wage increase, warning of its damaging effects on the economy if implemented.

In a joint position paper, the Employers Confederation of the Philippines, Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Philippine Hotel Owners Association, Philippine Association of Legitimate Service Contractors, Philippine Retailers Association, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., Philippine Constructors Association Inc., People Management Association of the Philippines and the Semiconductor and Electronics Industries in the Philippines Foundation Inc. said they strongly oppose the proposed wage increase recently approved by the House committee on labor.

“While we acknowledge and respect the desire to improve the welfare of workers, we believe that the sweeping nature of this proposal will have devastating effects on business owners, particularly small and micro enterprises, and the Philippine economy in its entirety,” the groups said.

They said micro, small and medium enterprises (MSME), which account for 99 percent of businesses in the country, are already struggling with rising operational costs, limited access to credit and the ongoing challenges following the COVID-19 pandemic and rising inflation.

“Mandating a blanket wage increase of P200 a day will disproportionately burden these businesses, many of which are operating with slim margins and lack the financial flexibility to absorb such a significant increase in labor costs,” the groups said.

With approximately 70 percent of the Philippine workforce in the informal economy, the groups said these workers would not benefit from the wage hike and may even be driven further into the margins of the economy.

Another concern raised by the group is the potential for wage distortion or the sharp discrepancy between the wages of workers with similar skill sets and responsibilities, which can cause disruption in pay structures and lead to unfair wage disparities.

“This could create an imbalance, leading to dissatisfaction