Philippines Wage Hike Blocked As Companies Explore Alternatives



Representatives from the Philippines House of Representatives are hesitant to support the P100 (US$1.79) statutory wage rise due to concerns about how it will impact employers.

House’s Deputy Majority Leader, Representative Janette Garin, emphasized the need to ensure that employers can sustain compensation increases in the long term. Garin emphasized the importance of considering organizations’ capacity, especially that of micro, small, and medium-sized businesses (MSMEs), which play a significant role in the nation’s economic sectors, when implementing the popular and well-received legislation.

Garin emphasized the problem that most organizations are MSMEs, and he raised concerns about the possible fallout from this, including company closures brought on by the increased financial strain. In order to comply with the demands of the proposed salary increase, she also raised the idea of possibly downsizing the workforce.

Representatives for economics Joey Salceda, Stella Luz Quimbo, and Deputy Speaker David Suarez echoed Garin’s worries when they said they were hesitant to approve the bill because they were worried about how it may negatively impact businesses, especially MSMEs.

Related link: Philippines Outcry Over Minimum Wage Hike Bill

Salceda emphasized the necessity for response without unintended consequences and the procedures now in place through regional wage boards. Quimbo issued a warning about the possibility of inflationary pressures brought on by businesses passing on the greater costs to customers, negating the purpose of wage increases.

While acknowledging the value of boosting employees’ purchasing power, Labor Secretary Bienvenido Laguesma emphasized the need for a thorough analysis of the proposed legally mandated pay increase. He emphasized the necessity for thorough investigation by highlighting potential consequences on GDP growth, inflation rates, and employment levels.

However, a number of business organizations rejected the proposal, claiming that regional wage boards should make the objective decisions about wage changes. Among them was the Philippine Chamber of Commerce and Industry (PCCI). According to Philstar, business associations warned lawmakers about the possible harm to MSMEs and unpaid workers and urged them to concentrate on comprehensive strategies for reducing economic inequality.

Leave a Reply

Your email address will not be published. Required fields are marked *