The Employer’s Confederation of the Philippines, or ECOP, has termed the passage of a Senate bill seeking a P100 daily minimum wage increase for private sector workers as “out of sync with reality.”

In an interview on Viber on Thursday, ECOP chairperson Ed Lacson also dubbed the measure, which passed on second reading the other day, as “anti-climactic,” while being “outrageous and anti-economic progress.”

The Senate bill “will be the proverbial last straw to break the camel’s back,” Lacson said, ruing that it comes after a series of recent wage orders from the tripartite regional wage boards across the country.

He warned that many micro, small and medium enterprises may just shut down if the law is passed as the MSME sector will be hardest hit from ever increasing operational costs.

“The senators want to play hero to the alleged ‘kawawang’ (pitiful) workers ala Robin Hood. They call this their gift to the suffering employees, but their generosity is not coming from their own pockets or pork barrel,” Lacson said.

Furthermore, he said, lawmakers want to take back from the regional tripartite wage boards the power, which was earlier given to them by the Senate, to grant wages according to each locality’s needs.

“This makes the senators an Indian giver in aid of election. The senators (even) ignored the inflationary impact of the P100/day increase on informal sector workers numbering 16 million, who are not covered by any wage increase orders,” Lacson said.

Also, he said, the additional P100 a day will force many companies to close down, lay off workers, resort to shifting schedules and forced vacations without pay, among other things. The same will hurt employees who are on a no-work-no-pay basis, he explained.

“The senators must know that any wage increase carries an attendant increase of 30 percent in payroll cost due to the automatic rise in overtime pay, retirement, holiday pay, and statutory contributions to SSS (Social Security System) and PhilHealth. The wage increase will also distort the pay scale of companies that are mandated to raise salaries of non-minimum wage workers using a formula provided by law,” he said.

On 14 February, Senate Bill 2534 authored by Senate President Juan Miguel Zubiri and lodged under Committee Report 190 was approved by the chamber as its “Valentine’s gift” to workers.

Meanwhile, House Deputy Majority Leader Janette Garin said the House of Representatives is seeking to legislate a P350 hike for minimum wage earners, but admitted they need to consider the struggling MSMEs.

In a press conference on Thursday, Garin said that as much as the House wants to enact a P350 wage increase, it should not be at the expense of small entrepreneurs who are still getting back on their feet after the Covid-19 pandemic.

“The intentions are good, but the implementation is one big question. Because it also goes into the pockets of businessmen which in terms of income is not really that much,” she pointed out.

Quimbo said private companies would simply tack the supplemental cost on their goods and services.

In June 2023, the Regional Tripartite Wages and Productivity Board-NCR granted a P40 pay increase for minimum wage earners in Metro Manila.

The salary hike that took effect on 16 July 2023 brought the minimum wage in the NCR to P610 from the prior P560 for the non-agriculture sector, and P573 from P533 for those in the agriculture sector.