The country's unemployment rate could rise if the government approves the proposed daily P150 increase in minimum wage for private sector workers nationwide, the Management Association of the Philippines said.

MAP president Benedicta Du-Baladad said companies might lay off employees to save on operations costs amid the unpredictability of consumer behaviors.

"I think there will be a rising unemployment rate because you have a limitation on your revenue. But what companies can control to afford are their labor costs," she told the DAILY TRIBUNE's Straight Talk.

Senate President Juan Miguel Zubiri is pushing a higher minimum wage through his Senate Bill 2002, or the Across-the-Board Wage Increase Act of 2023.

He said the new wage level will help narrow the gap between the rich and poor and allow the latter to cope with inflation.

However, Baladad said the government should also consider the effects of the wage proposal on employers, especially those who run small businesses and have limited financial resources.

"We need to make a balanced decision based on the financial capabilities of employers. Other businesses might become completely illiquid and close down, resulting in unemployment, which is a bigger problem," she said.

Zero profit

Baladad advised the government to find alternative ways to improve the conditions of workers while ensuring the growth of businesses for more job opportunities.

"No company wants to sell its products or services to earn zero profit. Perhaps, the solution to the labor problem is not to increase the minimum wage," she said.

Baladad said the government should reach out to private employers' groups to brainstorm ideas for navigating the labor issue for fairer benefits to both employers and employees.

"It's really a chicken and egg situation," she stressed.

Private sector workers in the National Capital Region have the highest daily nominal wage rate at P570. In contrast, those in the Bangsamoro Autonomous Region in Muslim Mindanao have the lowest rate at P316.