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Marcos: P200 wage hike may hurt businesses, fuel inflation, needs review

Dominique Nicole Flores - Philstar.com
Marcos: P200 wage hike may hurt businesses, fuel inflation, needs review
This undated photo shows an individual counting Philippine peso bills.
The Philippine STAR / Walter Bollozos

MANILA, Philippines — While the House of Representatives advances a bill proposing a P200 daily wage hike, President Ferdinand Marcos Jr. remains on the fence, saying that the issue “still deserves a great deal of study.”

On Friday, January 31, reporters asked Marcos for his thoughts on the proposed legislative wage hike, expressing some confusion since the Regional Tripartite Wages and Productivity Board (RTWPB) already sets the minimum wages.

“The thing is we have a tripartite board that actually determines the increase in the wage increase. So we still have to study how that will work together because the tripartite body was [a] creation of Congress din,” Marcos said in an ambush interview. 

“Sila ang nagbuo niyan. Nagsulat sila ng batas at nagbuo ng ganyang klaseng entity. ‘Yan ang trabaho nila para alamin kung ano ang dapat maging minimum wage,” he added.

(They created that. They wrote the law and established that kind of entity. It’s their job to determine what the minimum wage should be.)

For him, it is unclear how they could “work together,” but later said the government will “try to resolve” the concern on minimum wages given the rising cost of goods and services.

The inflation rate in 2024 reached 3.2%, according to the Philippine Statistics Authority, hitting the upper end of the government's target range of 2-4%. This was largely driven by rapid increases in the cost of housing, water, electricity, gas and fuel.  

However, Marcos empathized with business owners, particularly smaller enterprises, who have voiced concerns that their operations may be affected because they would not have enough capital to pay their employees with the increased wage. 

“There's not only one side to this question, there are many sides to it. The employers are worried na sinasabi … ‘pag tinaas ‘yung minimum wage, mababawasan ang kanilang empleyado. Ganu’n pa rin yung pera nila,” he said.  

(The employers are worried, saying that if the minimum wage is increased, they will have to reduce their employees. Their money will still be the same.)

The Employers Confederation of the Philippines (ECOP) shared this sentiment, highlighting potential investment losses and the possibility that the wage hike could be counterproductive.

Marcos explained that an increase in wages doesn't necessarily mean businesses will have more funds to pay workers. 

Citing the views of some economists, he said a wage hike could be inflationary, with the cost of goods and services rising to offset the added expenses from higher wages. 

Meanwhile, other economists argue that higher wages are essential to boost productivity and increase disposable income which would drive local spending, essentially supporting economic activity.

“Pero palagay ko naman (But I think) there is a way to increase that but we have to resolve the legal issues, we have to resolve the economic issues. So it still deserves a great deal of study,” Marcos added. 

The P200 across-the-board increase in daily minimum wage for private sector workers was a compromise agreed upon by House lawmakers proposing increases from as low as P100 to as high as P750. 

RELATED: P200 wage hike bill makes headway in Congress

The substitute bill consolidating four House bills was approved by the House Committee on Labor and Employment on Thursday, January 30, warranting a second reading at the plenary. 

The Senate, proposing a P100 wage hike, passed their counterpart measure on Feb. 19, 2024. 

Economic think tank IBON Foundation estimates the average family living wage in December 2024 at P1,224 daily. However, most minimum wage earners take home less than half of what is needed for a decent standard of living.

FERDINAND MARCOS JR.

HOUSE OF REPRESENTATIVES

WAGE HIKE

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