The Federation of Philippine Industries (FPI) and the Philippine Chamber of Commerce and Industry (PCCI) are urging a balanced approach to the newly approved P85 daily minimum wage increase in Metro Manila, warning that higher labor costs could add pressure to businesses already facing elevated energy, logistics, and financing expenses.

The groups said the wage adjustment should be matched with measures that improve productivity and reduce the cost of doing business to ensure companies, particularly micro, small, and medium enterprises (MSMEs), can continue creating jobs and investing for growth.

Despite the concerns, the FPI pointed to signs of recovery in the manufacturing sector, with the S&P Global Philippines Manufacturing PMI rising to 50.9 in June 2026 from 50.8 in May, marking a second consecutive month of expansion after April’s contraction.

FPI Chairperson Elizabeth H. Lee said the improvement shows that manufacturers remain resilient despite mounting challenges, but warned that businesses are still absorbing the effects of accumulated cost pressures.

“Businesses are weighing the cumulative toll of recent cost pressures,” Lee said.

The NCR wage board approved the P85 increase, which will be implemented in two phases: P60 in July 2026 and P25 in January 2027.

Lee said businesses recognize the need to support workers amid rising living costs but stressed that wage adjustments must be considered alongside other economic pressures.

“We recognize the legitimate basis for the wage adjustment: the cost of living for workers has genuinely risen, and the wage board acted within its mandate. At the same time, this increase compounds with other pressures already weighing on manufacturers this year — elevated energy and logistics costs, tighter financing amid continued BSP monetary policy, and global trade uncertainty. We must keep that in mind,” she said.

PCCI President Perry A. Ferrer likewise acknowledged the government’s authority to set wage policies and reaffirmed employers’ commitment to comply with the order, while emphasizing the need to consider business capacity.

“We affirm our commitment to the rule of law and call upon all employers in the region to comply fully with the Wage Order upon effectivity. While we recognize the legitimate aspiration of Filipino workers for better wages amid the continuing rise in the cost of living, we believe that wage determination must take into account the capacity of enterprises —particularly micro, small, and medium enterprises (MSMEs)— to absorb significant increases in labor costs while preserving jobs, maintaining business, and sustaining investments,” Ferrer said.

The PCCI warned that wage increases without corresponding productivity gains and lower operating costs could affect competitiveness, fuel inflation, and discourage investments.

“More than wage increases, we hope that our government will address the growing inflation - lowering the cost of basic commodities, transportation, gasoline, and other necessities- so that gains will benefit all Filipinos and not only selected sectors,” Ferrer added.

FPI and PCCI both stressed that continued dialogue among government, employers, and workers will be essential to maintaining economic growth while protecting livelihoods.

“June's PMI uptick shows Philippine manufacturing can still grow under pressure. However, sustaining that growth means supporting workers while preserving businesses' ability to invest, employ, and compete. We cannot treat one factor in isolation,” Lee said.