PCCI Opposes P200 Wage Hike as House Approves Bill on Second Reading

The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, has expressed opposition to the proposed P200 legislated wage hike, citing concerns over its potential impact on businesses, particularly micro, small, and medium-sized enterprises (MSMEs). This follows an earlier objection from the Employers Confederation of the Philippines.

Despite pushback from the private sector, the House of Representatives on Monday approved the measure on second reading through viva voce voting. House Bill No. 11376, or the “Wage Hike for Minimum Wage Workers Act,” initially proposed an across-the-board increase but was later revised to apply only to low-income earners in the private sector. The bill includes exemptions for barangay microbusiness enterprises, small retail and service establishments with fewer than 10 employees, and businesses affected by natural calamities or human-induced disasters.

The PCCI called on lawmakers to leave wage adjustments to the regional wage boards (RWBs), arguing that a uniform nationwide increase would not account for economic differences across regions.

“A blanket national minimum wage does not take into account the differences in the cost of living across regions as well as the unique needs of businesses based on specific industry, location, and type of labor they need,” PCCI President Enunina Mangio stated.

She pointed out that cities have higher living costs compared to rural areas, and a standardized wage hike could harm businesses in lower-cost regions.

“Legislating a single wage for all areas can harm businesses in lower-cost regions and [remove] the flexibility of the RWBs to set wages that are aligned with the situation in their local areas,” she added.

Mangio cautioned that while a wage hike may seem beneficial for workers, it could lead to inefficiency and stagnation in businesses, particularly MSMEs, which operate on tight margins.

“MSMEs are already operating on tight margins. The mandated wage hike will force these small enterprises to shoulder higher payroll expenses,” she said.

She further warned that businesses in low-margin industries such as retail, hospitality, and agri-food would be forced to pass on the cost to consumers.

“For some businesses, particularly those in low-margin industries like retail, hospitality, and agri-food, the wage increase will force them to pass on the cost to consumers,” she added.

Additionally, Mangio highlighted concerns over inflation, stating that rising costs could erode purchasing power and potentially lead to job losses.

“Making everyday items more expensive will simply offset the benefits of a higher wage, especially [for] workers in the low-income brackets. But the inflationary effect will bear down more on workers in the informal sector who are not bound by the minimum wage law,” she warned.

She also noted that some microenterprises in the formal sector might shift operations to the informal economy to cut costs. Instead of a legislated wage increase, Mangio pushed for “a comprehensive approach that balances the needs of workers with the capacity of businesses and ensure[s] that MSMEs continue to thrive while still providing fair wages.”

While Speaker Martin Romualdez earlier committed to fast-tracking deliberations on the wage hike—the first legislated increase in 36 years—President Ferdinand Marcos Jr. stressed the need for further study.

“The thing is we have a tripartite board that actually determines the increase in the wage. So, we still have to study it further to see how that will work together. Because this tripartite body was also created by Congress… It is their job to determine what the minimum wage should be,” Marcos said.

“We have to resolve the legal issues; we have to resolve the economic issues. So, it still deserves a great deal of study,” he added.

The Nagkaisa (N1) Labor Coalition challenged Marcos’ position, arguing that Congress retains the authority to legislate a national wage increase despite delegating wage-setting powers to RWBs.

“Congress never surrendered its plenary authority to legislate a national minimum wage,” N1 Chair Sonny Matula stated.

Matula, a labor lawyer, also criticized Marcos’ call for further study, saying the wage hike proposal had already undergone thorough hearings attended by labor advocates and economists.

“[President] Marcos was ‘clearly uninformed’ in calling for a further study of the proposal,” Matula remarked.

As debates continue, the bill moves closer to final approval in the House before heading to the Senate for further deliberation.