BIG business groups are sounding the alarm over the proposed ₱200 daily wage hike passed by the House of Representatives, saying it could lead to layoffs, especially among small businesses.
The Philippine Retailers Association (PRA), the country’s largest group of retailers, said the proposal would hurt micro, small and medium enterprises (MSMEs), which make up most of the retail sector.
“This will cause layoffs in the retail sector, especially in the MSME retailers, which comprise almost 70 percent of retail employment,” PRA president Roberto Claudio.
Claudio also warned the increase would create problems within companies, even for workers earning more than minimum wage.
“It will create salary distortions up the ladder. Companies will be forced to increase wages across the board,” he said.
Because of this, the PRA is backing calls to let regional wage boards handle wage increases, not Congress.
“We support the appeal of the Philippine Chamber of Commerce and Industry (PCCI) to let the wage boards decide what’s appropriate in each region,” Claudio added.
The PCCI had earlier said a nationwide wage hike could override the role of the Regional Tripartite Wages and Productivity Boards and hit small businesses the hardest.
Other business groups are also worried. The Employers Confederation of the Philippines and the Philippine Exporters Confederation Inc. have both said the move could do more harm than good.
The Makati Business Club (MBC) pointed out that the hike could also lead to higher prices and weaken the country’s competitiveness.
“This wage rise represents 31 percent in Metro Manila, where the existing daily wage is ₱645. It’s 37 to 44 percent in Calabarzon,” the MBC said in a statement.
Instead of raising wages across the board, the group said the government should focus on lowering the cost of basic goods, especially food.
“We are not against wage hikes. But these should be handled by regional wage boards, which consider the cost of living in each area. There’s no compelling reason for Congress to bypass them,” the MBC added.
On June 3, the House approved on third and final reading a bill mandating a ₱200 increase in the daily minimum wage nationwide. The Senate still has to vote on the measure.
