Malacañang on Tuesday defended the approved P85 daily wage increase for minimum wage earners in Metro Manila, saying wage adjustments must balance the welfare of workers with the capacity of employers to absorb higher labor costs.

Speaking at a Palace briefing, Presidential Communications Office Undersecretary and Palace Press Officer Claire Castro said the government recognizes the plight of workers but must also consider the financial capability of businesses.

"Tayo naman po ay kumikilala sa kalagayan ng ating mga manggagawa, pero binabalanse rin po ito sa kakayahan ng ating mga employers. Mahirap po na magbigay bigla ng malaking suweldo, tapos hindi rin kakayanin ng employers," Castro said.

Castro was responding to the Trade Union Congress of the Philippines (TUCP), which criticized the P85 increase as inadequate despite Labor Secretary Francis Tolentino describing it as "historic."

The labor group argued that the increase fails to offset the decline in workers' purchasing power and noted that the adjustment would be implemented in two tranches.

Castro warned that imposing a substantially higher wage increase could force businesses to reduce their workforce.

"Magle-lay off ng employees, mas mawawalan ng trabaho ang iba nating mga kababayan, mas maraming magkakaroon ng unemployment," she said.

She added that proposals for a P200 legislated daily wage hike fall under the jurisdiction of Congress, while the Regional Tripartite Wages and Productivity Board (RTWPB) is responsible for determining appropriate regional wage adjustments.

"Kung ano lang po ang nakikita at naa-assess ng Regional Tripartite Wages and Productivity Board, iyan po ang ibinibigay," Castro said.

According to Castro, more than 1.1 million minimum wage earners in the National Capital Region are expected to benefit from the wage order approved by the Department of Labor and Employment and the RTWPB.

She said the increase is consistent with President Ferdinand Marcos Jr.'s directive to improve the wages of Filipino workers.

Under the wage order, the increase will be implemented in two phases. The initial P60 increase will take effect on 19 July, while the remaining P25 will be implemented in January 2027.