Wage hike in the Philippines will displace up to 140,000 employees

A P35 (US$0.60) wage increase in the National Capital Region of the Philippines could affect up to 140,000 private sector employees, increasing the region’s unemployment rate.

Despite the potential displacement of up to 140,000 employees, the wage hike in the Philippines is expected to stimulate job creation, as shared by Socioeconomic Planning Secretary Arsenio Balisacan at a press briefing at Malacañang.

Balisacan, who heads the National Economic and Development Authority (NEDA), has commented the number of employees who may be affected by the wage increase is not as big as one would expect if the rate adjustment had been much higher.

“For so long as the economies are expanding because of other things, like investments are coming in, then the offsets would be there…the economy can still grow,” he said.

Balisacan commented that the wage adjustment is “quite reasonable” and “good enough” to ensure that employees are still able to purchase the things they need.

The Regional Tripartite Wages and Productivity Board recently approved an increase of P35 in Metro Manila, bringing the minimum wage to P645 (US$11.04) for non-agriculture employees.

According to Balisacan, employees who may be laid off because of this wage adjustment will still be able to find new jobs due to a growing economy and a robust labour market, with more than 600,000 new jobs available this year.

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“As our economy continues to grow at 6-7% this year, that will be accompanied by quite a lot of jobs,” the NEDA chief said, as reported by The Philippine Star.

The unemployment rate has slightly increased by 0.1% in May this year, based on the preliminary results of the Labour Force Survey released by the Philippine Statistics Authority (PSA).