By Kenneth Christiane L. Basilio, Reporter
THE HOUSE of Representatives on Tuesday affirmed on its third and final reading a proposal aiming for a P200 universal minimum wage increase for employees in the private sector, despite fears over its possible inflationary consequences and negative effects on small enterprises.
Legislators voted 171-1-0 in favor of House Bill No. 11376, clearing the path for the chance of the first legislated wage increase since the late 1980s, when legislation established regional wage boards to set salary levels.
In February, Congress members passed the bill on its second reading, while the Senate approved a related bill proposing a P100 wage rise the previous year.
Nevertheless, the House’s endorsement of the wage increase occurs just days before Congress adjourns for the final time on June 13.
Following the endorsement, the Trade Union Congress of the Philippines (TUCP) called upon the leadership of the House and Senate to swiftly assemble a bicameral conference committee to reconcile conflicting aspects of their respective bills.
“I urge all my fellow bicameral committee conferees — my counterparts in the Senate and my colleagues in the House — let’s finalize this, and finalize it now,” Deputy Speaker and TUCP Party-list Rep. Raymond Democrito C. Mendoza stated in the announcement. “We have moved beyond debating whether we will enact a legislated wage increase, but rather focusing on how substantial that wage increase will be.”
“Whether it ends closer to P100 or P200, this will represent the most significant wage elevation in nearly four decades,” he added.
In the Philippines, minimum wages are determined regionally through wage boards, but lawmakers contend that the system offers slow and insufficient increases that fall short of keeping pace with rising expenses.
Approximately 55% of Filipino families consider themselves impoverished, based on an April survey conducted by Social Weather Stations. Data from the Philippine Statistics Authority in 2023 indicated that a family of five requires at least P13,797 each month or P460 daily to get by.
Advocating for a legislated wage increase would give a “genuine boost” to achieving a sustainable living wage, said Federation of Free Workers President Jose Sonny G. Matula prior to the bill’s endorsement, asserting that it is “pro-worker, pro-poor, and pro-local economy.”
“A legislated wage increase interrupts the cycle of barya-barya (small change) adjustments from regional wage boards,” he mentioned in a Viber message. “For minimum wage laborers nationwide, this signifies a meaningful enhancement to daily survival — a step towards a livable wage.”
However, only five million workers would gain from the wage increase, Sergio R. Ortiz-Luis, Jr., president of the Employers Confederation of the Philippines, remarked before the bill’s endorsement.
“Only 10% of workers would be impacted by the legislated wage elevation,” he stated in a phone call, observing that most employees belong to the informal sector. “The majority are, for instance, farmers, fisherfolk, tricycle and jeepney drivers, and market vendors.”
Nearly 50 million Filipinos were employed as of March 2025, according to government records.
Companies might find it challenging to adapt to a legislated wage increase, which could lead them to increase the prices of goods and services they offer, potentially fueling inflation, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, stated before the bill’s approval.
“Businesses could transfer the increased labor costs to consumers through higher prices,” he commented in a Viber message. “However, the inflationary effect would depend on the magnitude of the wage increase and whether it is implemented gradually or accompanied by productivity improvements.”
An immediate wage rise could compel companies to reduce their workforce, resulting in layoffs and diminished hiring, he noted. “Micro, small and medium enterprises (MSMEs) may find it difficult to cope with increased wage obligations.”
MSMEs represent over 99% of all businesses in the Philippines and account for 67% of the nation’s total employment, as per the United Nations Development Program.
The Labor Department may offer incentives to small businesses to assist them in adhering to the legislated wage increase, as suggested in the proposed law. Enterprises with fewer than 10 employees might also be exempted from this measure.
The government may incur a cost of P1.5 billion monthly if it opts to subsidize small businesses to ensure compliance with the proposed wage rise, according to Mr. Ortiz.
“It could amount to as much as P50 million daily,” he remarked. “Where will that funding originate?”
Legislators should instead permit regional wage boards to manage salary adjustments, Mr. Ortiz argued. “There are regional wage boards that adjust wages annually.”
Congress should also consider executing a phased legislative wage increase or a region-based approach to balance the interests of businesses and laborers, suggested Mr. Rivera.