An increase in the mandated wages that legislators are pushing during an election year will be subjected to a serious review to prevent a further slowing of growth.

The proposed P200 daily pay hike needs further review, President Ferdinand Marcos Jr. said Friday.

Growth skidded to 5.6 percent for last year mainly as a result of low output in the agriculture sector, where the majority of micro, small and medium enterprises (MSMEs) are found.

“The thing is we have a tripartite board that actually determines the increase in wages. So, we still have to study it further to see how that will work together,” Marcos said in a chance interview in Pasay City.

“So, now with this, I don’t know how that’s going to work together. But we will see. We will try to resolve that because as you know it’s very clear that prices are rising, inflation is still there. We haven’t been able to curb it completely,” he added.

Higher wages translate to an increase in consumer spending that pushes prices up if the productivity of industries does not grow in parallel.

The House Committee on Labor and Employment on Thursday approved a substitute bill mandating a P200 daily across-the-board wage increase for private sector workers.

Across-the-board hike

The measure requires all private businesses, regardless of size and industry, to implement a P200 daily pay hike upon enactment.

The bill bars employers from offsetting the increase with previous wage adjustments unless explicitly anticipated under collective bargaining agreements.

Senator Joel Villanueva, who chairs the Senate Committee on Labor, Employment, and Human Resource Development, on Friday hoped that Marcos will certify the bill as urgent, stressing that economic growth must translate into tangible benefits for the workforce.

Marcos expressed his concern that the wage hike will have a serious impact on MSMEs.

“There’s no problem with corporates, those big corporations, they can handle it. No matter what increase you put on them, they can handle it. But the small ones, that’s what others are worried about,” Marcos said.

“But I think there is a way to increase that but we have to resolve the legal issues, we have to resolve the economic issues. So, it still deserves a great deal of study. So, it still deserves a great deal of study,” he added.

House cedes delay

Rizal Representative Fidel Nograles, chairperson of the House Committee on labor and Employment, admitted there was indeed a delay in the approval of the bill, but he attributed it to the series of consultations with various stakeholders, as well as employers’ groups, who have been reportedly not receptive to the clamor for wage hike.

“The wage hike bill is a much-needed measure that could bring relief to millions of minimum wage workers across the whole country. It’s more important that we stand up and unite to finally enact this than fighting,” the House leader stated.

The panel on Thursday unanimously approved an unnumbered bill for the proposed P200 across-the-board wage hike, a consolidation of four similar measures, with some of which had been pending at the committee for nearly two years.

The bill’s approval came one day after a meeting between Speaker Martin Romualdez and other House leaders with major labor groups earlier this week.

Critics suspected that the approval of the proposal was a political play considering the heated debates over the 2025 national budget and the upcoming elections.

Nograles, nonetheless, explained that the delay in the processing of the bill was due to “intense discussions and examinations.”

“We need to give sufficient opportunities to all groups, investors, employers, workers and our government,” he told the media.

According to Sergio Ortiz-Luis Jr., president of the Employers Confederation of the Philippines (ECOP) — the country’s biggest trade organization — Congress’ “unpredictable” decision for a legislated wage hike may “frighten” investors, leading to capital flight.

“Their remedy for that (wage hike) is they will increase their prices of goods if the market can afford it, or if not, reduce workers. Otherwise, [businesses] will just close,” he lamented.

The Employers Confederation of the Philippines has continuously opposed mandated wage increases, citing its disadvantage to MSMEs, which he claimed will be severely affected by the increase but won’t get anything in return.