Proposed ₱200 daily wage hike advances in House, reflecting 31% increase

After nearly two years of being stalled, the proposed law for an across-the-board wage hike finally hurdled the House committee on labor and employment on Thursday, with a twist— increasing the raise from the initial P150 to P200.

The swift deliberation and unanimous approval of the unnumbered bill—a consolidation of four similar measures—followed a meeting between Speaker Martin Romualdez and other House leaders with major labor groups earlier this week to pass the longstanding clamor for a legislated wage hike for workers in the private sector.

The P200 increase in the daily salary was a consensus reached during the closed-door meeting.

The proposed “P200 Daily Across-the-Board Wage Increase Act” will legally mandate employers in the private sector, whether agricultural or non-agricultural, to provide an additional P200 to the daily salary of their workers.

If passed into law, employers found to be non-compliant and violating this Act will be fined up to P100,000 and may face jail time of up to four years.

The bill also seeks to prohibit employers from offsetting the increase with previously granted wage adjustments unless these were explicitly anticipated under collective bargaining agreements. Existing benefits and allowances cannot be reduced as a result of the pay hike.

During the brief deliberation, Gabriela Rep. Arlene Brosas, one of the bill’s proponents, stressed that while the bill is a positive step forward, she believes that the government could do more by further increasing the proposed P200 daily salary hike.

“The P200 increase is still far from providing our workers with a family living wage that can sustain the basic needs of every Filipino family,” she lamented, citing data from economic think tank IBON Foundation, estimating that the family living wage should be averaged at P1,207 per day.

Allaying the fears of employers, OFW Rep. Marisa Magsino, meanwhile, explained that the looming wage hike will prevent employees from resigning since they will be provided with fair compensation.

The last wage increase was more than three decades ago when Congress enacted the Wage Rationalization Act of 1989 (Republic Act 6727).

Efforts to have another salary raise have been religiously made years after, but all were unsuccessful due to various factors, with concerns mainly from business sectors, which are said to be at the receiving end.

According to Deputy Speaker and TUCP Rep. Raymond Democrito Mendoza, despite the enactment of RA 6727, which he said augmented the minimum wage by 40 percent, there was no massive inflation, wave of unemployment, or collapse of businesses.

“Today, everything is going up—food, electricity, water, fuel, and even transportation—except workers’ wages,” said Mendoza, also one of the proponents, during the deliberation.

The lawmaker argued that the legislated wage hike is “long overdue” and that workers must be granted this much-needed raise, citing regional minimum wages that are below the poverty line.

Mendoza expressed optimism that the P200 wage hike would lift about 5 million minimum wage earners out of poverty.

The Senate, in February last year, had already passed a P100 legislated wage increase for private employees. However, some lawmakers, such as Albay Rep. Joey Salceda and Marikina Rep. Stella Quimbo—both seasoned economists—expressed reservations about the wage hike, arguing that it will not be felt in the long run since prices of goods and services are likely to go up subsequently after the salary increase.

The Employers Confederation of the Philippines (ECOP), the country's biggest trade organization, has religiously rejected the clamor for the wage hike, citing its disadvantage for MSMEs, which it claimed will be severely affected by the increase but won't get anything in return.

Further, ECOP asserted that the proposed wage hike will also hit farmers, fisherfolk, market vendors, and some in the informal sector, which accounts for 84 percent of the labor force.

Some employer groups have also opposed the calls for legislated wage hikes for fear that they may have to lay off workers or force small businesses to shut down.

Romualdez, however, guaranteed that they would ensure that the House’s proposal for a wage hike would cater to the needs of both employees and employers by intending to provide the latter with wage subsidies and exemptions for struggling MSMEs.

The current minimum wage for private workers in the National Capital Region is pegged at P645 following the last P35 increase approved in July last year.

If the proposed P200 daily minimum wage hike is approved, this will raise the daily minimum wage to P845.