P35 wage hike could affect up to 140,000 workers — NEDA

The P35 increase in Metro Manila's daily minimum wage is estimated to affect up to 140,000 workers and could further affect the country's unemployment rate, National Economic Development Authority (NEDA) Secretary Arsenio Balisacan said on Tuesday.

Balisacan said this during a press briefing in Malacañang after the Philippine Statistics Authority said the country's jobless rate stood at 4.1 percent in May 2024.

In the briefing, Balisacan said that the assessment is still relatively small, especially considering the latest unemployment rate, despite slightly affecting the national output gross domestic product (GDP).

"Our estimates so far suggest that the national output GDP would be impacted negatively but it's a very small impact. It's just one-tenth of one percent," Balisacan said.

"The focus as economic managers is not so much on the employment per se, but the quality of jobs," Balisacan added. He emphasized the importance of investments to generate jobs that provide "decent earnings" and help lift Filipinos out of poverty.

He downplays concerns about rising unemployment, stating the latest unemployment rate is slightly higher than the 4 percent recorded in April but lower than the 4.3 percent in May 2023.

"That number is already actually very low," he said, adding that employment data should not be compared on a month-on-month basis due to seasonality factors.

For so long as those wage adjustments are not too high to discourage investments or constrain the country's economy, Balisacan said the wage hikes are welcome.

''And the data that we have seen is that as of March, April this year — those adjustments are simply adjusting to the level of inflation, and a little bit more so that the purchasing power of workers, wages, and salaries will not fall. And that should not worry the business community,'' he said.

The Regional Tripartite Wages and Productivity Board in the National Capital Region (RTWPB-NCR) recently approved a P35 daily increase in the minimum wage. This adjustment raises the daily wage to P645 for non-agriculture private sector workers and P608 for those in agriculture, service, or retail sectors in Metro Manila.

The new rates are set to take effect on 17 July.

Labor Secretary Bienvenido Laguesma, who was present during the press briefing, clarified that the hike applies only to the minimum wage, "the entry level, the floor level." He emphasizes it protects workers from "undue low pay."

Laguesma acknowledged the potential impact on businesses, particularly micro and small enterprises. He assured that wage boards consider "the needs and interests of the workers and their families" alongside business concerns.

While acknowledging the 20,000 workers affected by last year's adjustment, Laguesma assured that the recent P35 increase aims to "maintain the employment level and sustain the growth of the economy." He highlighted considerations for inflation and overall economic impact.