The Philippines’ DOLE cautions against nationwide wage increase

Labour Secretary Bienvenido Laguesma stresses the need for balance in wage increases and urges for Congress action amid rising commodity prices.
By: | May 10, 2024

The Department of Labour and Employment (DOLE) of the Philippines reiterated its caution to legislators regarding the potential adverse effects of implementing a nationwide legislated wage increase.

Labour Secretary Bienvenido Laguesma warned of the possible repercussions such as employee displacement, inflation in essential commodities, and a decline in economic growth.

Laguesma urged employers to brace themselves for mandated salary hikes by the various Regional Tripartite Wages and Productivity Boards (RTWPBs). However, he also highlighted the challenges, noting that compliance might be difficult for many micro, small and medium enterprises (MSMEs) which constitute a significant portion of organisations in the Philippines.

Emphasising the necessity to strike a balance between the needs of employees and the capacity of employers to provide salary increases, Laguesma underscored the importance of allowing organisations reasonable returns on their investments and opportunities for expansion. And despite calls from several labour groups for a legislated wage hike amidst rising commodity prices, Laguesma emphasised that the existing wage hikes granted by RTWPBs might not suffice, thus urging Congress to expedite pending legislation on wage increases.

READ MORE: Labour groups urge immediate wage hike in the Philippines

Laguesma also revealed that RTWPBs would commence an annual review of minimum wage rates, with the National Capital Region slated to begin on May 16, followed by other regions between July and August. After the review, new wage orders are expected to be issued.

Furthermore, DOLE asserted that the country’s employment situation is showing signs of improvement, despite a slight increase in the number of unemployed in March. Laguesma attributed this increase to the significant number of new entrants to the labour force, while noting a decrease in underemployment, indicating a trend towards providing better quality employment opportunities, reported Philstar.