10 business groups unite vs P200 legislated wage hike

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Ten business groups unified their opposition to a legislated minimum wage increase of P200 daily, saying the proposal will bring about massive losses to the economy to the detriment of workers.

In a position paper signed by their respective leaders, the groups called on the House Committee on Labor and Employment to consider the adverse effects on businesses, workers, and the economy of the across-the-board Wage Increase Act, which the committee recently approved.

Apart from the Employers Confederation of the Philippines and the Philippine Chamber of Commerce and Industry, the other groups who joined the petition were the Philippine Exporters Confederation Inc., Philippine Hotel Owners Association, Philippine Association of Legitimate Service Contractors, Philippine Retailers Association, Federation of Filipino-Chinese Chambers of Commerce and Industry, Philippine Constructors Association Inc., People Management Association

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of the Philippines and Semiconductor and Electronics Industries in the Philippines Inc. 

Their joint position paper dated February 4 was submitted to committee chair Rep. Juan Fidel Felipe Nograles (4th District, Rizal) a copy of which was given to media on February 5.

The 10 business groups said the wage increase will exert inflationary pressures, force smaller businesses to close down, and eventually lead to job losses.

They said that instead of imposing a one-size-fits all approach, lawmakers should consider more targeted measures that will address the root causes of poverty and inequality.

They proposed measures that could include providing more support for micro, small and medium enterprises, strengthening social safety nets for

workers, and improving access to education and skills training to help workers secure better-

paying, sustainable jobs.

 “We believe that the proposed P200 across-the-board daily wage increase is neither feasible nor beneficial in the current economic environment,” they said. 

During a hearing on January 30, the House labor committee approved the substitute bill to House Bills No. 514, 7568, and 7871.

The measure requires all private businesses, regardless of size and industry, to implement a P200 daily pay hike upon enactment.

“The sweeping nature of this proposal will have devastating effects on business owners, particularly small and micro enterprises, and the Philippine economy in its entirety,” the joint position paper said.

 The groups said mandating a blanket wage increase will disproportionately burden MSMEs, many of which are operating with slim margins and lacking the financial flexibility to absorb such a significant increase in labor costs.

The business groups said about 70 percent of the Philippine workforce engaged in the informal economy, will be left behind by this wage hike. 

They warned of the potential wage distortion — the sharp discrepancy between the wages of workers with

similar skill sets and responsibilities — thus causing disruption in pay structures and leading to

unfair wage disparities. 

The groups also said the mandatory wage hike will place a heavy financial strain on employers, forcing them to pass the increased costs on to consumers in the form of higher prices for goods and services. 

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“This will exacerbate inflationary pressures in the economy, leading

to higher living costs for all Filipinos, including the very workers this bill aims to protect. In the long run, this could undermine the purchasing power of consumers and negatively affect overall economic stability,” the position paper added.

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