File photo for reference only

 

The Department of Labor and Employment (DOLE) has called for a fair and data-driven approach to the ongoing discussions surrounding the nationwide wage hike proposals. This approach aims to ensure worker welfare is safeguarded without compromising the country's economic stability.

 

DOLE Secretary Bienvenido Laguesma highlighted that the department has provided Congress with technical inputs on the matter and emphasized the importance of continuous dialogue among labor, employers, and government entities. The current proposal under consideration is a P200 increase in the daily minimum wage.

 

In his Labor Day message, President Ferdinand Marcos Jr. supported a meticulous and comprehensive review of wage proposals. He advocated for a balance that delivers long-term benefits without risking jobs and investments.

 

Business groups have voiced concerns over the potential negative impact of a uniform wage hike on micro, small, and medium enterprises (MSMEs). Given that MSMEs constitute over 99 percent of businesses nationally, the fear is that the additional financial burden could lead to layoffs or increased consumer prices.

 

Laguesma reiterated that wage-setting authority remains with the Regional Tripartite Wages and Productivity Boards (RTWPBs). These boards assess factors such as inflation, the cost of living, and employers’ ability to pay before setting region-specific wage levels.

 

While Congress holds the power to legislate wages, the executive branch, through DOLE, offers technical support and policy insights to aid in legislative discussions. "As part of the executive, we provide technical support and act as resource persons. Whether our recommendations are adopted or not, we respect the legislative process," Laguesma stated.

 

The Ibon Foundation, an independent think tank, emphasized the equity aspect of higher wages, citing the widening gap between workers’ earnings and corporate profits. They pointed out that current wages haven't kept pace with the rising cost of living, advocating for policies that fairly distribute economic benefits.

 

Aside from wage discussions, DOLE continues to enhance programs for low-income and vulnerable workers, focusing on employment facilitation, skills development, and social protection services.

 

Wage determination in the Philippines is governed by Republic Act No. 6727, or the Wage Rationalization Act, which empowers RTWPBs to set region-specific wages based on economic conditions.

 

As of May 2025, the National Capital Region (NCR) maintains the highest minimum daily wage at P645, following a P35 increase under Wage Order No. NCR-25, issued in July 2024. Several wage petitions are still pending across different regions, with labor groups urging that wage policies should reflect the true cost of living and promote dignified employment.

 

  Adapted by ASEAN Now from Manila Bulletin 2025-05-07

 

 

There is no doubt about it that wages are alarmingly low for even middle class, well educated employees, but 200 pesos is nearly a 30% increase, and while any increase will apply to minimum wage earners, it means that all employees will require to see some distortion effect - a rising tide lifts all ships, so to speak.  The reality is that most small companies cannot absorb that so the cost has to be passed on to the consumer - or layoffs.