Economists opposed renewed proposals of an above-P50 wage hike by some senators in the 20th Congress for private-sector workers nationwide, stressing this would push up inflation by over 4 percentage points.
Senators Christopher “Bong” Go and Robin Padilla have suggested raising the minimum wage by P100 and P150, respectively.
This, despite the recently approved P50-hike by the Regional Tripartite Wages and Productivity Board for workers in the National Capital Region.
Not beneficial
University of Asia and the Pacific Economics professor Victor Abola said a P100 increase would not be very beneficial as he projects this would raise the prices of goods and services already up by 3 to 4 percentage points.
“It’s about time these politicians stop their negative meddling with the economy, especially, when it’s not their money that’s involved,” he said.
Abola added that businesses would be forced to close shops as owners would struggle to sustain payments for higher wages.
“Employment has already tended to flatten in the first half of 2025. Moves like the one proposed provide more blows to entrepreneurship in the Philippines,” he said.
According to the Philippine Statistics Authority, the average employment rate in the first four months of the year stood at 96 percent, lower than last year’s 96.2 percent.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said a higher wage would further shrink profits of local businesses amid competition against foreign firms offering cheaper consumer prices.
Foreign firms discouraged
With higher wages, economists said foreign companies will be discouraged to expand operations in the country and hire local workers.
“If competition is intense, some businesses would absorb the additional labor costs, narrowing their profit margins,” Ricafort said.
“Many of our goods are already imported, even agricultural goods and we could lose our competitiveness,” said Philippine Chamber of Commerce and Industry Chairman George Barcelon.
Given the decreased business activities, Abola said the country’s overall economy will slow down.
Too high already
“The P50-hike is already too high for the Philippine economy which has slowed down since the second quarter of 2024,” he said.