Bill to raise the daily minimum wage meets backlash in the Philippines

Employers in the Philippines are criticising a new Senate bill that seeks to raise the daily minimum wage in the private sector by P100 (US$1.78), citing possible damage to micro and small businesses while dampening investors’ appetite.

The Employers Confederation of the Philippines (ECOP) has said the proposal will hurt micro and small enterprises, while also incurring another round of inflation that will drive foreign investors away.

“With the wage increase, they will be affected by the increase in prices, but they won’t be among the beneficiaries of the higher pay,” ECOP president Sergio Ortiz-Luis Jr. said. He deemed it unfortunate since the current rate of inflation had fallen and the new increase in wages would mean an increase in prices by at least 2%. 

Micro businesses, which comprise 90% of enterprises in the Philippines, could no longer afford to pay employees higher salaries, Ortiz-Luis Jr. pointed out. The new proposed wage hike would also make the Philippines have one of the highest wages in the region, something which would affect the appetite of investors, Ortiz-Luis Jr. noted.

Senate Bill 2534, which pushes for a P100 (US$1.78) minimum wage increase for private sector employees, has already reached the Senate plenary and is sponsored by Senator Jinggoy Estrada, Chair of the Senate Committee on Labour, Employment and Human Resources Development, reported The Philippine Star.

READ MORE: Minimum wage in the Philippines not sufficient for employees

“After consideration of the existing socio-economic conditions and positions of various sectors, it is incumbent upon us to propose a daily pay hike to help alleviate the burden of Filipinos in the face of soaring prices of basic commodities and the rising cost of living,” said Senator Estrada. “We cannot turn a blind eye to the injustice to and the economic conditions of our employees, who are considered the lifeblood of the economy.”