The Employers Confederation of the Philippines (ECOP) and other business groups on Thursday criticized the passage recently of the P200 daily wage hike bill by the House of Representatives.

ECOP warned that if enacted into law, the wage hike could trigger economic instability, especially for micro, small and medium enterprises (MSMEs), many of which would fold up, leading to job losses.

But labor groups led by the Trade Union Congress of the Philippines (TUCP) urged President Ferdinand Marcos Jr. not to veto the bill but to make it part of his legacy.

On Wednesday, the House of Representatives approved on final reading House Bill 11376, or the Wage Hike for Minimum Wage Workers Act, with a vote of 171-1-0.

“Labor and its supporters in Congress are clutching at straws. They know fully well that the bill on the P200 minimum wage increase is dead in the water as President BBM and all economic managers have unanimously and strongly objected to a legislated wage increase for its dire impact on the economy,” said ECOP chairman Edgardo Lacson in a Viber message.

Lacson reiterated that wage-setting should remain under the purview of the Regional Tripartite Wages and Productivity Boards (RTWPB) which were created by law and mandated to determine the appropriate wages based on regional conditions.

“Congress is trying to earn brownie points with labor and washing its hands of this issue by passing the P200 wage bill and transferring the onus to the executive branch,” he said.

The Philippine Chamber of Commerce and Industry (PCCI) echoed the sentiment, warning the hike would disproportionately affect informal workers—who comprise 50 to 60 percent of the labor force—and businesses outside Metro Manila.

“The wage hike will lead to higher labor costs, consequently resulting in higher costs of goods and services, and inflation,” PCCI president Enunina Mangio said.

“Even as the benefit will only be enjoyed by workers in the formal sector, the inflationary effect will erode purchasing power, negating the wage hike’s intended benefit,” he added.

Marcos legacy

Malacañang responded by saying that all stakeholders will be heard before the President makes a decision.

“We will look at the economic implications of this and how to resolve this with the opinion of the wage boards, since the wage boards are also the creation of Congress. So, all concerns of all stakeholders will be scrutinized and considered,” said Palace Press Officer Claire Castro.

Despite the strong opposition of business groups, TUCP, the country’s largest labor federation, appealed to Marcos to sign the bill once it reaches his desk.

House Deputy Speaker Democrito Mendoza of TUCP Party-list said the proposal represents the first legislated wage hike in nearly four decades and would be remembered as a key achievement of the Marcos administration.

“You know, the previous administration raised the salaries of policemen and, of course, the AFP. This time, this would be the legacy of President Marcos, BBM, that he raised the salaries of all five million minimum wage earners,” Mendoza said.

The last legislated wage increase was in 1989 with the enactment of the Wage Rationalization Act. Since then, wage hikes have been left to the RTWPBs.

Mendoza argued that the current daily minimum wage of P645 in Metro Manila falls far below the poverty threshold, citing studies pegging a living wage at P1,200 per day.

“It has already passed both houses of Congress. We’re just waiting for the President’s go-signal. So, Mr. President, if it reaches your table, do what is right for your legacy,” he said.

House open to compromise

The proposal now goes to a bicameral conference committee to reconcile the differences between the House version, which proposes a P200 hike, and the Senate’s version under Senate Bill 2534, which calls for a P100 increase.

Gabriela Rep. Arlene Brosas, one of the bill’s proponents and a bicameral panel member, said the House is open to a compromise.

“Once we agree on an amount, it will be quick; we can move forward, and the bill can go to the President’s table. Remember, this is historic,” said Brosas. “Ultimately, all we want is for the workers to benefit... whether it’s P200 or P100.”

ECOP president Sergio Ortiz-Luis Jr., however, pointed out that only 10 percent of the 52 million-strong workforce are minimum wage earners, leaving out farmers, fisherfolk, vendors, and informal workers.

“Legislated wage hikes will harm MSMEs the most,” Ortiz-Luis said. “They will have to cut costs—often by laying off workers or closing down.”