The 19th Congress ended its session without the House of Representatives ratifying the proposed bill to raise the minimum wage, missing the chance for President Ferdinand Marcos Jr.’s approval.
The House had proposed a ₱200 daily wage increase, while the Senate recommended a ₱100 hike.
However, both chambers failed to reconcile before adjournment.
Last June 4, the House approved the bill granting an across-the-board ₱200 increase on minimum wage, marking the first legislation on salary increase since 1989.
The bill garnered 171 yes votes, zero no votes, and one abstention in last Wednesday’s plenary session; the proposed legislation is expected to impact 5 million private sector workers in the country.
While the bill awaited the Senate and the president’s approval, labor groups and employers remain divided on the possible impacts of the bill.
Divided opinions
The Employers Confederation of the Philippines (ECOP), alongside other employer groups, warns that businesses will suffer the brunt of compensating and thus resort to firing employees.
According to ECOP President Ortiz-Luis, the measure targets 99% of businesses, as micro, small and medium enterprises (MSMEs) are unable to compensate with employees’ wage increase.
“Eight% is small, 1% is medium, and less than 1% is large. The medium and large, they can afford it, but they are paying more than that. The micro, no way,” Ortiz-Luis said.
In 2025, MSMEs comprise 99.6% of businesses in the Philippines, according to the United Nations Development Program.
Ortiz-Luis also emphasized that the bill will only benefit the formal sector, leaving out individuals working in the informal sector, including fisherfolk, market vendors, tricycle drivers, and jeepney drivers, to name a few.
“The reality is increasing [the] P200 minimum wage and the President knows…this will only benefit about 10 to 16% of the workers,” said Ortiz-Luis, expressing concern over informal workers that will be left behind.
Inflationary Impact
Employer groups also sound the alarm about how the bill could lead to higher inflation rates, as commodity prices are expected to rise.
According to John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, companies will be prompted to raise prices of their goods and services to compensate for the soon-to-be mandated wage hike.
“Businesses could pass on the higher labor costs to consumers through increased prices,” Rivera said via a Viber message. “However, the inflationary impact would depend on the scale of the wage hike and whether it is staggered or accompanied by productivity gains.”
To help business owners keep up with the possible setbacks caused by the wage hike, lawmakers proposed to provide subsidies to employers and companies.
“We recognize the impact of mandating wage increases on micro and small businesses which is why the government must act by providing wage subsidies to ensure that their workers receive fair wages while ensuring the survival of their businesses,” Gabriela Representative Arlene Brosas said in her opening statement during the plenary session.
Long-overdue legislation is dead
Despite receiving clamor on how the bill could worsen inflation and job displacement, lawmakers and labor groups assert the urgent need to increase the country’s minimum wage.
However, even with enough calls and urges from various parts of the labor sector, the 19th Congress ended its session without compromising the needs of the workers.
The last wage increase legislation, the Republic Act 6727 or the Wage Rationalization Act, was passed in 1989, with wages increasing to P89, uniformly set across the regions.
36 years since then, wage hikes are decided per region by respective regional wage boards, with the National Capital Region having a P645 minimum wage—the highest in the country, while the Bangsomoro Autonomous Region in Muslim Mindanao (BARMM) only earns a P361 daily wage.
The proposed wage hike remains far from the P1,225 daily family livable wage suggested by the IBON Foundation, as such, progressive groups, including Gabriela Parttlist, voted yes with reservations to the bill—highlighting that the proposed wage hike is far from ideal.
But despite being ideal, a wage increase is still a wage increase—it could help millions of Filipinos to not starve and have food to eat every day.
And now that the bill was never approved or ratified, it shows the country’s lack of priority for labor workers.
