Philippines Employers Concerned Over Impact Of Wage Surge


The Employers Confederation of the Philippines (ECOP) has cautioned that a planned P150 (US$2.65) statutory wage increase might result in a 30% increase in employer expenditures, with micro, small, and medium companies (MSMEs) suffering the largest burden.

The ECOP’s Chairman, Edgardo Lacson, emphasised that any wage adjustment automatically results in a 30% increase in employer expense, covering increased payroll costs for Social Security System (SSS) contributions, the PhilHealth insurance scheme, overtime pay, and employee retirement benefits.

Lacson also noted that pay increases tend to cause inflation since manufacturers pass on greater labour expenses to consumers through higher pricing.

Additionally, he noted that informal employees who are not protected by minimum wage rises would suffer, he noted.

Lacson warned that a P150 wage rise, as suggested in Senate Bill 2002, might hurt the Philippine economy and urged for more sustainable solutions to assist employees cope with growing living costs.

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Ma. Flordeliza Leong, Vice-President of the Philippine Exporters Confederation, shared Lacson’s worries, pointing out that pay increases intensify inflationary pressures.

Leong and Lacson advocated focusing on laws that encourage job creation and attract investment, such as assigning a greater budget to the Department of Trade and Industry to boost MSMEs and expanding financial assistance options for struggling businesses.

Other business organisations, such as the Philippine Chamber of Commerce and Industry (PCCI) and the Federation of Filipino Chinese Chambers of Commerce and Industry (FFCCCII), have expressed worry that rising employment costs may hinder foreign investment.

Lastly, the planned wage hike, according to PCCI President George Barcelon, might make the Philippines less competitive in the worldwide market.

President of the FFCCCII  said that labour costs are now a competitive advantage for the country and efforts should be geared towards sustaining this edge.

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