Employers call for more reforms to boost productivity following wage hike order

BUSINESS GROUPS said the P85 wage hike for Metro Manila must be accompanied by further reforms to boost productivity and reduce the cost of doing business, to ensure that employers can comply with the order.

Philippine Chamber of Commerce and Industry President Ferdinand A. Ferrer, while signaling his organization’s willingness to comply, called for policies to strengthen enterprise productivity and competitiveness to help firms, especially micro, small and medium enterprises (MSMEs), absorb increases in the cost of labor.

“While we recognize the legitimate aspiration of Filipino workers for better wages amid the continuing rise in the cost of living, we believe that wage determination must take into account the capacity of enterprises — particularly MSMEs — to absorb significant increases in labor costs while preserving jobs, maintaining business, and sustaining investments,” Mr. Ferrer said in a statement.

On Wednesday, the Regional Tripartite Wages and Productivity Board-National Capital Region approved an P85 increase for Metro Manila workers. This would bring the daily minimum wage in Metro Manila to P780.

In a separate statement, the Federation of Philippine Industries (FPI) said manufacturers have been grappling with multiple pressures this year, including elevated energy and logistics costs, tighter financing after the Bangko Sentral ng Pilipinas’ subsequent rate hikes, and global trade uncertainties.

FPI Chairman Elizabeth H. Lee noted that even with the slight improvement in factory activity as signaled by the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), business confidence remains “relatively low” due to global uncertainties magnifying supply chain disruptions and raising input costs.

The Philippine PMI rose to 50.9 in June from 50.8 in May.

“June’s PMI uptick shows Philippine manufacturing can still grow under pressure. However, sustaining that growth means supporting workers while preserving businesses’ ability to invest, employ, and compete,” Ms. Lee said.

Management Association of the Philippines President Donald Patrick L. Lim said higher productivity, stronger economic growth, and better quality jobs will help provide lasting improvements to worker incomes.

“While businesses will respect and comply with the new wage order, many MSMEs will face additional cost pressures that could affect hiring, expansion, and pricing decisions,” he said via Viber.

Over 99% of businesses operating in the Philippines are MSMEs, which must contend with financing constraints, high costs, and greater vulnerability to inflationary pressures.

Mr. Lim cited the need to create an environment of “productivity-driven” wage growth, alongside measures to improve ease of doing business, lower logistics and energy costs, and invest in skills and technology.

“More than wage increases, we hope that our government will address the growing inflation… so that gains will benefit all Filipinos and not only selected sector,” Mr. Ferrer added. — Beatriz Marie D. Cruz