Business Groups Warn of Inflation, Job Cuts Over Proposed ₱200 Wage Hike

Leading business organizations in the Philippines have voiced strong concerns over the potential economic fallout of the proposed ₱200 daily minimum wage hike for private sector workers, warning of inflationary effects and job losses, especially among small enterprises.

The Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines (ECOP), and Makati Business Club (MBC) said the House-approved across-the-board wage hike lacks consideration for its broader impact—especially on micro and small enterprises (MSEs), which account for 96% of businesses.

PCCI emphasized that higher wages will drive up the cost of goods and services, potentially triggering inflation that would hurt informal workers, who make up 50-60% of the population and are not covered by minimum wage laws.

ECOP President Sergio Ortiz-Luis Jr. noted that only 10% of workers are minimum wage earners, leaving the rest vulnerable to inflation without any wage relief. He warned that small businesses unable to absorb increased labor costs may resort to layoffs.

The MBC added that the 31% to 44% increase across regions could reduce the Philippines’ competitiveness compared to neighbors like Vietnam and Indonesia, possibly deterring investors.

The business groups also criticized the proposed legislation for bypassing the Regional Wages and Productivity Boards (RWPBs), which were designed to set location-specific wage adjustments based on local conditions. They argued this undermines the established tripartite wage-setting process.

Malacañang and Labor Secretary Bienvenido Laguesma both acknowledged the concerns. Laguesma warned that a steep wage hike could lead to job informality, compliance issues, and investor hesitation.

Congress has until June 13 to reconcile the House and Senate versions of the bill before sending it to the President.