Trade and workers’ groups take opposing views on the need for an increase in the minimum wage amid ongoing discussions on the proposal for a P150 across-the-board wage increase that is contained in a bill in the Senate.

Eight business groups, in a joint statement on Friday afternoon, argued that the wage hike would only benefit 8 million formal workers among the 50 million labor force.

Informal workers, which comprise the majority, will not feel any impact on their economic state if the bill is approved. Instead, they may clamor for ‘ayuda’ or government aid.

Proposals for a wage hike will have an adverse impact to businesses, 98 percent of which fall under the category of micro, small and medium enterprises or MSMEs.

Adverse consequences

“If the proposal for increased wages is approved, these employers may have to further increase the prices of their products, reduce the number of their workers, or simply close down,” the statement reads.

The statement was signed by representatives of the Philippine Chamber of Commerce and Industry, the Employers Confederation of the Philippines, Philippine Exporters Confederation Inc., Federation of Filipino-Chinese Chambers of Commerce and Industry, IT & Business Process Association of the Philippines, Philippine Hotel Owners Association, Foreign Buyers Association of the Philippines, and the United Port Users Confederation of the Philippines Inc.

In a separate statement, NAGKAISA chairperson Sonny Matula said the welfare of workers and businesses should go hand-in-hand, and that raising the basic wages could bring long-term benefits to the country’s economy.

“It is vital to recognize that the well-being of workers and economic growth are interconnected. By ensuring fair wages for a significant portion of the workforce, we can create a positive ripple effect that stimulates economic activity, increases consumer spending power and fosters social progress,” Matula said.

“The 16-percent of workers who will experience increased wages will contribute to a healthier economic climate, benefitting businesses and workers alike,” he added.

While businesses argue that a legislative wage hike could hamper the implementation of laws such as Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act which lowers the tax rate for businesses, Matula argued that the wage hike could attract more businesses and investors.

“A workforce with higher wages projects stability and helps attract investments. Investors are drawn to countries or regions where workers have decent wages, as it signifies a stable and growing consumer base,” he said.

Two pending bills seek a P150 wage increase including House Bill Number 7871 which eyes a wage recovery increase that according to bill author and Trade Union Congress of the Philippines Representative Raymond Mendoza, “aims to recover the purchasing power of current wages” amid the 34 years of no significant wage increase following the passage of the Wage Rationalization Act in 1989.

If the proposal for increased wages is approved, these employers may have to further increase the prices of their products, reduce the number of their workers, or simply close down.

Another bill, Senate Bill Number 2002 which was filed by Senator Juan Miguel Zubiri, seeks a P150 wage hike.

The current minimum wage is at P533 and P570 for agricultural and non-agricultural work in Metro Manila, respectively, while the lowest minimum wage is at the Bangsamoro Region in Muslim Mindanao, which respectively stands at P306 and P341.