‘Only the government possesses the power to cut through the noise, reconcile
discordant viewpoints, and set a clearer, more equitable direction for wage setting.’
THE 19th Congress has come and gone, leaving Filipino workers with the proverbial empty bag of unfulfilled promises of a wage hike.
Despite the House proposing an additional P200 to their daily pay and the Senate a more modest P100, lawmakers failed to agree on a final number as the widely anticipated bill died a quiet death.
The bill was the closest workers had come to such an increase since 1989, a testament to the continuous struggle for a living wage.
Economic managers were quick to paint a dire picture of job losses and spiraling inflation even as they warned that wage hikes could lead to a 0.5-1.6 percentage point drop in GDP and a 0.2-0.6 percentage point increase in unemployment.
Inflation, they cautioned, could jump by 0.7 percent to 2 percent.
Like the President, they recommended just sticking to the regional wage board system.
Researchers at the University of the Philippines School of Labor and Industrial Relations (UPSolair) argue that regional wage hikes have a minimal impact on regional prices. They point to studies in other countries, including one in the US, where moderate wage hikes surprisingly led to lower prices.
UPSolair’s team also asserts that moderate wage increases, akin to the 1989 legislated hike, would not trigger an economic catastrophe of mass retrenchments and runaway inflation. Their own studies conclude that with the right set of policies, the twin goals of wage recovery for workers and low unemployment are achievable.
It’s also worth noting that increased basic wages do not always translate to higher productivity or GDP growth.
Data from 2022 to 2024 reveals that countries with high minimum wages like Singapore and South Korea registered slower GDP growth of 0.8 percent to 3.4 percent compared to the lower minimum wage economies of Cambodia, the Philippines, and Bangladesh, which posted more robust GDP growth of 5.4 percent to 6.3 percent in the same period.
Private sector workers in the National Capital Region receive a minimum wage of P608 to P645 per day, a sharp contrast to rural area workers who average P361 to P470 daily.
While our basic salaries are lower than Singapore, Japan, and South Korea, they remain comparable to Vietnam and Indonesia.
A late 2024 report from Singapore’s Business Times indicated that minimum wages across the ASEAN region are poised for a further increase this year, expected to outpace anticipated inflation.
The report highlighted Malaysia, Thailand, and Indonesia as economies anticipating minimum wage growth, while wages in Vietnam and the Philippines were projected to remain level until the next round of potential negotiations.
While a wage increase was indeed contemplated in the Philippines this year, no serious “negotiations” transpired, with the President and his economic managers effectively walking away from the table.
Amidst clashing opinions and conflicting wage hike models, the urgency of addressing the pitiful pay of Filipino workers remains imperative.
Only the government possesses the power to cut through the noise, reconcile discordant viewpoints and set a clearer, more equitable direction for wage setting.
