P100/day wage hike approved by Senate

(MALAYA) A BILL granting a P100-increase in the daily minimum wage of workers in the private sector was approved by the Senate on third and final reading yesterday.

The measure, seen to benefit some 4.2 million minimum wage earners, was passed amid opposition from business groups that said a P100 salary hike is not the solution to challenges faced by Filipino workers.

Sen. Jinggoy Estrada, chairman of the Committee on Labor, said the last legislated wage increase of P89 a day was in 1989 with the enactment of RA 6727 or the Wage Rationalization Act, which effectively declared that wages would be set on a regional basis by regional wage boards.

The P100 legislated wage increase for private minimum wage earners, whether from the agriculture or non-agricultural sector, was passed with a vote of 20-0-0.

Four senators — Manuel Lapid, Imee Marcos, Cynthia Villar, and Mark Villar — were not present at the session when the voting was held.

Estrada defended the passage of the measure, saying a flourishing economy relies on the vitality of its workforce who are considered the lifeblood of enterprises.

“Dapat nating pangalagaan at unahin ang interes ng ating mga manggagawa (We should protect and put priority the interests of our workers) … A higher minimum wage does not only impact the lives of those directly affected but reverberates throughout our communities, stimulating local economies, and ensuring that people would have more money in their pockets to meet their basic needs,” he said.

Senate majority leader Joel Villanueva said the objective of the legislated wage increase is meant to ease the burden of workers amid the rising prices of goods and services.

“Over the years, regional minimum wages have not kept up with the rising prices, and the real value of the minimum wage has fallen 28 percent on average across all regions nationwide. In fact, based on the 2023 poverty threshold, all the regional minimum wage rates are lower than the regional poverty threshold,” Villanueva said in explaining his “yes” vote.

“To alleviate concerns, it was established during interpellations and from various studies and evidence put on record that increasing the daily minimum wage will have very minimal impact on inflation and low probability of causing job losses,” he added.

At least 20 business groups, in a statement last week, asked the Senate to “rethink” the proposed legislated wage increase, saying it will hurt companies while benefitting only a few workers.

Instead of focusing merely on wage increases, the groups said, the Senate should adopt a more comprehensive approach to address economic inequality, including investing in education, skills development, and infrastructure, as well as creating an enabling environment for business growth and job creation.

They said lawmakers should pass laws that would once and for all solve low productivity, poor governance, excessive regulations, worsening poverty, and serious income inequality which characterize a country with a large informal sector.

“Another wage hike through legislation coming at the heels of the recently implemented minimum wage adjustments through the wage boards is not the appropriate solution to address the underlying challenges faced by our Filipino workers,” the groups said.

They said that the legislated wages will affect the micro, small, and medium enterprises and will worsen the plight of the informal sector and it 47-million strong workforce.

At the House, Iloilo Rep. Janette Garin said the P100 daily wage hike approved by the Senate would still be inadequate for a minimum wage earner and would also hurt the micro, small, and medium-sized enterprises because almost 95 to 98 percent of the business enterprises are small businesses.

She stressed the need to balance both employers and employees “as there would be a workforce reduction because companies could not maintain the salary increase costs for their employees.”

There are many bills pending at the House seeking wage hikes ranging from P150 to P750 but the House leadership is eyeing the middle ground which is a P350 a day increase.

Garin said the country needs more foreign investors to increase the salaries of private workers by at least P350 daily and the answer is to open the country’s economy through Charter change (Cha-cha). – With Wendell Vigilia and Gerard Naval