MANILA, Philippines — The P100 minimum wage hike for private sector workers has been approved on third and final reading by the Senate, with 20 affirmative votes and no negative votes or abstentions.
Senators Imee Marcos, Lito Lapid, Cynthia Villar and Mark Villar were not present at the session hall and thus did not cast their votes.
Members of the House of Representatives have been cool to legislating a wage increase, dismissing it as posturing by senators ahead of the 2025 midterm elections.
The law leaves wage-fixing to regional tripartite wages and productivity boards, where the capability of the business sector to implement a wage increase is considered.
Employers have warned that a legislated wage hike across the board could lead to job losses and business shutdowns, and fuel inflation as the cost of the wage hike is passed on to consumers.
Sen. Bong Go, one of the co-authors of Senate Bill 2534, commended the bill’s sponsor Sen. Jinggoy Estrada and Senate President Juan Miguel Zubiri for their drive to help Filipino workers.
“It is the goal of this measure to provide for a living wage that allows our Filipino workers to earn enough for a satisfactory standard of living and prevent them from falling into poverty,” Go said.
He urged the rich to distribute their income to the poor.
“I will continue to stand in solidarity with every proposal that we submit to affirm the welfare and rights of our Filipino workers,” he added.
Sen. Francis Escudero clarified that the proposed measure will not affect the Wage Rationalization Act of 1989, the Barangay Micro Business Enterprises Act of 2002 or small companies that only have 10 employees or those with an investment of P3 million or less.
Estrada said “the last legislated wage hike that was implemented in the country dates back to 1989.”
Sen. Grace Poe said that while a P100 wage hike is insufficient, it has been a long time since a legislated wage hike was implemented.
Senate Majority Leader Joel Villanueva said “the legislated wage hike is a good start” for what he dreams of “giving all workers a living wage.”
Gabriela party-list Rep. Arlene Brosas yesterday lauded the Senate for passing SB 2534.
“Although the P100 increase in wages is not enough to reach the P1,193 family living wage, this is an initial step toward putting the spotlight on the plight of the workers who have long been calling for a significant wage hike,” she said.
Brosas urged the House of Representatives to prioritize House Bill 4898, which institutes a national minimum wage based on the family living wage, and House Bill 7568, which seeks a P750 across-the-board wage increase for private sector workers.
The two measures can be merged to institute a P1,100 uniform national minimum wage, she added.
In a study last month, research group IBON Foundation found that a family of five in the National Capital Region needs P1,193 daily or P25,946 monthly to live decently. However, the existing minimum wage in the region is still pegged at P610 or only half of the wage standard.
‘Food prices to go up’
However, according to the Philippine Chamber of Agriculture and Food Inc. (PCAFI), food prices might increase if the legislated across-the-board P100 wage hike pushes through as it would drive up production costs.
“What we lament is that it seems that farmers are not part of the discussion on the minimum wage proposal. Farmers, who are not formally employed, will not benefit from the proposal,” PCAFI president Danilo Fausto yesterday told The STAR.
“We wish to request the government that if the formal laborers will be given a P100 per month (benefit), then those who are not in the formal labor force should also get a benefit to have a fair treatment,” he added.
Consumers would ultimately shoulder the price burden as the increase in production costs would just be passed on across the value chain, he noted.
Farmers are not covered by the minimum wage hike but certain farms are impacted by such a measure since they employ workers covered by it, he explained.
Fausto proposed more support for farmers, either through higher subsidies or cash assistance, to mitigate possible price increases resulting from the minimum wage hike.
The benefit could also include fertilizers or irrigation, he said.
Farm owners could be discouraged from expanding production and be forced to lay off workers, he added.
An example, Fausto said, is the rice value chain, particularly rice mills that employ drivers and mill operators. Higher wages would just be passed on by the millers, resulting in higher rice prices.
“When you increase the cost of inputs, you will also raise the price of your goods to recoup or cover the additional costs you incurred,” he said.
“(Senators) are doing the other way around. The government wants to arrest inflation and food prices but it might be doing the opposite. The wage hike has a multiplier effect on the costs of operations across value chains,” he added.
Philippine Institute for Development Studies senior research fellow Roehlano Briones agreed that increasing the minimum wage could increase food prices “but not by much” since compliance with the minimum wage in the agriculture sector is “low.”
The agriculture sector employs about a quarter of the country’s labor force or around 12.32 million people as of December 2023.
Latest Philippine Statistics Authority data showed that the average wage paid to agricultural workers in 2022 reached P301.14 daily, about 5.3 percent higher than the P285.92 per day recorded in 2021.
Meanwhile, the present minimum wage in agriculture ranges from a low of P316 to a high of P573 depending on the region, according to the Department of Labor and Employment.
Local economy to be boosted – labor group
Contrary to projected company closures and mass displacement of workers, a P100 legislated wage hike would boost the local economy, according to a labor group.
Partido ng Manggagawa (PM) and other labor groups are pushing for the passage of wage hike bills before Congress.
Workers’ wages circulate directly into the local economy, bolstering the income of neighborhood stores, PM noted.
“The more than P8-billion sales generated by neighborhood sari-sari stores in 2023, as reported by analytics group Packworks, reinforces our claim that a uniform increase in the national minimum wage would neither kill micro enterprises nor lead to massive unemployment,” said PM chair Renato Magtubo.
Packworks’ report disproved an employers’ group’s projection of a “catastrophe” for small businesses if minimum wages are increased by P100 or higher, Magtubo added.
The analytic research also pointed to escalating sales transactions between neighborhoods from 2022-2023, coinciding with slight adjustments in minimum wages ordered by the regional wage boards during that time, he noted.
There is no correlation between inflation and the sales trend in sari-sari stores based on the report, belying further the Employers Confederation of the Philippines’ sensational “wage hike = high inflation” economic blackmail, Magtubo said.
Of the 1.3 million sari-sari stores nationwide, he said 75 percent are owned by women and these establishments play a crucial role in sustaining local economies.
“Workers often rely on ‘utang-bayad-utang-bayad’ (debt-payment) transactions. Thus, their capacity to pay and buy more directly impacts the viability and sustainability of neighborhood stores,” Magtubo added.
The National Anti-Poverty Commission (NAPC) yesterday expressed support for the wage hike, noting that the rising prices of goods have eroded workers’ pay.
“Workers are only seeking salary increases that will take the place of earnings lost to inflation. That means the real value of their pay is no longer suitable because of inflation,” NAPC formal labor and migrant workers alternate sectoral representative Danilo Laserna said during the Bagong Pilipinas public briefing aired over state-run PTV. — Jasper Emmanuel Arcalas, Sheila Crisostomo, Mayen Jaymalin, Alexis Romero