Legislated wage increase — Compassion beyond reason and reality

When Alexander Pope wrote in the eighteenth century: “Hope springs eternal in the human breast,” it was meant to urge those with good intentions to relentlessly pursue their dreams at any cost.

But legislators who repetitively file, refile, and refine bills mandating unreasonable and unaffordable wage hikes have interpreted Alexander Pope’s maxim in a twisted way.

On 6 June 1989, 35 years ago, Congress enacted Republic Act 6727 entitled the Wage Rationalization Act, judicially delegating the authority to set wage levels to the Regional Tripartite Wages and Productivity Board or RTWPB. This was in recognition of the wisdom of delegating such power to a broader consultative body without political or partisan interference.

However, on 6 June 2025 or two days after the bicameral conference committee failed to pass the P200 and P100 minimum wage increase per House Bill 11376 and Senate Bill 2534, respectively, a copy-paste HB 11376 was immediately filed to revive the P200 per day nationwide minimum wage increase.

This showed the dogged tenacity of Congress to pursue its political desire for a legislated wage increase despite the dire warning of a financial disaster by all the economic managers.

Congress uses its retained override plenary legislative power to legislate national wage increases if the RTWPB fails in its duty, or when they deem it necessary for the national interest or social justice. However, RA 6727 clearly entrusts the evaluation of RTWPB performance to the Department of Labor and Employment’s National Wages and Productivity Commission (NWPC), not to Congress.

Since the passage of RA 6727, the Philippines has enjoyed sustained economic growth, evidenced by consistent increases in GDP, interrupted only during periods of global economic shocks.

Presently, we are facing economic and financial turmoil from the wars between Russia-Ukraine and Israel-Hamas-Iran, and the inconclusive outcome of the US bombing of Iran’s nuclear facilities. Yet, the combined impact of these wars remains a potential risk to our financial health and economic programs.

In our part of the globe, the imminent threat of territorial conflict with China over the West Philippine Sea is also a potential threat to our economic stability.

But the unceasing attempts by Congress, no matter how unsuccessful, to legislate a wage increase is a clear and present danger to our economic health as it seriously unsettles business and prevents new investments.

The recent failure of the P200 per day wage increase bill has hardly diminished the lust of Congress as it refiled immediately and automatically a similar bill disregarding the result of the performance evaluation by the NWPC as mandated by RA 6727 or the Wage Rationalization Act.

Perhaps Congress is sincerely driven by a noble desire to uplift the approximately five percent, or nearly four million, minimum wage earners out of the estimated 80 million workers (50 million in the formal and 30 million in the informal sectors).

There is a nagging suspicion that the lawmakers are pushing the legislated wage increase in aid of their election. But however unfounded this impression, they need to be reminded of the irreparable damage to the Philippine economy the arbitrary act of their deceptive generosity will cause.

It is like watching a Japanese kabuki play full of drama and deception with the legislators acting as champions and saviors of the “oppressed” workers ready to enact poorly studied wage laws that ignore economic realities and pander to populist praises.

Besides, a legislated wage increase violates the spirit of RA 6727 and insisting on passing the bill simply because it has the power to do so is not just hubris but legislative arrogance and an overreach pretending to be an act of compassion for the “suffering” workers.

Although wages need to be adjusted in line with economic realities, it must be in the manner that considers productivity, regional disparities, and long-term economic resilience.

Leadership demands wisdom, restraint, and fidelity to existing processes, as mandated by law, that protect both workers and enterprises. When these established processes and institutions, like the RTWPB and NWPC, are bypassed in favor of populist policies, the risks to the country’s economic stability and people’s livelihoods become not only real, but imminent.

What may appear as compassion in the short term can undermine investor confidence, disrupt jobs creation, and erode the very foundations for long-term growth and prosperity.