GOVERNMENT economic managers warned that the legislated across-the-board minimum wage hikes, either 100 or P200, could have dangerous repercussions, including higher inflation, unemployment, and slower economic growth.
Meanwhile, with the 19 th Congress adjourning yesterday, the House of Representatives urged the Senate to immediately convene the bicameral conference committee and reconcile the differing versions of the proposed legislated daily wage increase bills.
A joint position paper by the economic managers of the Marcos administration, including the Department of Trade and Industry and the Bangko Sentral ng Pilipinas, stated that a P200-increase in wages could trigger inflation rate growth of about two percentage points (ppts), while a P100 hike may result in 0.7 ppts.
“The substantial minimum wage increase may lead to higher production costs, which could result in higher prices that may disproportionately affect low-income households,” the paper submitted to Malacañang read.
“Thus, while the government has already achieved bringing year-to-date average inflation down to just 1.9 percent, as the country’s headline inflation rate further slowed to 1.3 percent in May 2025, an across-the-board minimum wage hike may reverse this progress and make high inflation rates reappear,” the economist noted.
Additionally, when wage adjustments are not commensurate with improvements in productivity, they can exacerbate price pressures, they added.
The economists also stressed that managers the “poorest of the poor” are bound to be most vulnerable to inflation.
“A wage hike will inevitably result in higher prices in the goods sold by enterprises who will have to accommodate the wage increase. This will result in the poorest of the poor, who are mostly in the informal sector and do not even make minimum wage, bearing the brunt of the impact of the wage increase,” they said.
The joint statement also said MSMEs, which constitute over 90 percent of all business enterprises in the country and who considerably rely on minimum wage earners, may struggle or not be able to absorb the mandated wage increase per worker, which translates to P4,000 a month given a 5-day work week or P4,800 a month for a 6-day work week.
“To cope, some may increase prices of goods and/or services, reduce their workforce, or worse shut down operations altogether, affecting both employees and the broader economy,” the statement read.
The economic managers also said enterprises may be forced to either stop hiring, lay off or retrench workers, resulting in unemployment.
“Employers—whether employing a lot or a few—will have to factor in the additional cost of production due to the wage hike, and may either stop hiring workers; lay off or retrench employees; or at least reduce work days. This will lead to higher rates of unemployment and underemployment, with an increase in the unemployment rate of about 0.2 percentage points for the P100 increase to 0.6 percentage points for the P200 increase, translating to around 105,000 to 300,000 persons potentially losing their jobs,” they said.
The economic managers also estimated that the across-the-board wage hike will exert substantial downward pressure on gross domestic products (GDP) by 1.6 ppt for a P200 hike and 0.5 ppt for a hike of P100. Both scenarios are predicted to result in the economy missing the lower end of the GDP growth target range.
“It was therefore recommended to the President that the current system of adjusting wages through the Regional Tripartite Wages and Productivity Boards (RTWPBs) be maintained, while strengthening the implementation of the minimum wage law with a focus on having each region more adequately respond to the evolving needs of its workers, and increasing investments that would create more quality jobs,” they said.
“Regional minimum wage setting better reflects local economies, avoids purchasing power disparities, and supports fairer wage distribution. It also ensures inclusivity in the decision-making process, with the use of the tripartite wage-setting that takes into consideration the side of the government and employers aside from workers, as endorsed by the International Labor Organization (ILO),” the economic managers said.
In a formal letter to Senate Committee on Labor chaired by Senator Joel Villanueva, House Committee on Labor and Employment chair Rep. Fidel Nograles cited the urgency of passing the measure, warning that failure to act today would leave millions of Filipino workers “with nothing—despite months of effort and public expectation.”
“The House of Representatives acted swiftly and decisively,” Nograles wrote. “We passed our version of the bill on third reading, submitted the names of our conferees in advance, and have since stood ready to enter into bicameral discussions with our Senate counterparts.”
Nograles pointed out that the Senate only named its conferees last night, limiting the already narrow window for bicameral discussions and ratification.
“If we fail to deliver today, there is a very real danger that our workers will be left with nothing,” he said.
Nograles emphasized that the House strongly prefers a transparent and deliberative bicameral process, “rather than being bamboozled into accepting the Senate version wholesale, without discussion or compromise.”
“That is not how co-equal chambers of Congress are expected to legislate. We cannot and should not be forced into a corner where our only option is to rubber-stamp a version that does not reflect the result of honest dialogue,” he added. “This bill deserves better. The Filipino people deserve better.”
The House warned against any attempt to “circumvent the process by limiting dialogue or bypassing bicameral reconciliation,” saying it would be “a disservice to the legislative process and to the people we are all sworn to serve.”
“With both panels now duly constituted, we appeal for the immediate convening of the bicameral conference committee—today (Wednesday), if we are to meet our deadline. The House panel is ready, willing, and available. All that remains is for our counterparts in the Senate to come to the table,” the letter said.
In closing, Nograles emphasized: “Let history show that we in the House did everything within our power to pass this important piece of legislation. Should it fail to reach the President’s desk before adjournment, the responsibility will be clear to the public.”
Editor’s Note: This is an updated article. Originally posted with the headline “Marcos economic team, BSP oppose P200 wage hike.”
