THE Department of Labor and Employment (DOLE) is leaving to lawmakers’ discretion the decision of whether or not to approve the proposed P100-daily minimum wage increase for private sector employees.
However, Labor Secretary Bienvenido Laguesma said the DOLE together with other agencies such as the National Economic and Development Authority (Neda) and Department of Trade and Industry (DTI) have already submitted their technical inputs on the proposed wage hike.
The technical inputs, according to Laguesma, project the possible adverse and positive impact of the legislated wage hike on the employment level, inflation rate, economic growth and operations of businesses.
“At the end of the day, let me just go back to my earlier statement that the enactment of laws is within the jurisdiction of the Congress, both the House of Representatives and the Senate. We just implement them but before that we provide technical inputs,” Laguesma explained.
“If they will listen to us, thank you. If not, and if they think we are very conservative, then we would leave it up to their judgment.
But, at the end of the day whenever a law is passed, our obligation is to implement,” he added.
The Senate on Tuesday opened plenary deliberations on Senate Bill No. 2534 sponsored by Senator Jinggoy Ejercito Estrada, chairperson of the Senate Committee on Labor, Employment and Human Resource Development.
The bill proposes a P100-daily minimum wage increase which is expected to benefit over 4.4 million minimum wage earners.
From the original proposal of a P150 daily wage increase, Estrada said his committee recommended a P100 daily pay hike as almost all regional wage boards have already responded to the workers’ clamor by ordering an increase ranging from P30 to P90 last year.
However, Laguesma cautioned lawmakers on the possible adverse chain reaction on the business sector, particularly on the small and medium enterprises, of the legislated wage hike based on the simulation they conducted.
One possible effect of the proposed increase, according to Laguesma, is the increase in operational expenses of businesses by 15 to 20 percent.
He also warned that the increase might result in the so-called wage distortion, where minimum wage earners would surpass the salaries of average employees because the former will enjoy mandated wage increases.
“Under the law, employers would have to address this issue to prevent demoralization among its employees.
However, Laguesma said it is the Neda which can provide concrete details on the impact of the proposed wage hike on the investors, employment level and economic growth.
Estrada clarified that “while the minimum wage in Metro Manila for the non-agricultural sector consistently recorded the highest basic pay in the country at P610 per day …the actual daily pay is eroded by inflation.”
He noted that the real value of the minimum wage—which reflects the inflation-adjusted rates using the consumer price index—has fallen to P514.50 in the capital as of July 2023 and further decreased to P504 for October 2023, and this scenario is replicated across all regions.
Meanwhile, Laguesma welcomed the recent results of the Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA) showing a record low of 3.1-percent unemployment rate in December 2003 and 4.3 percent in 2023.
“The DOLE is thankful and elated with the latest report coming from the PSA showing a high employment rate.
The said result will serve as an inspiration for us to continue the implementation of DOLE’s programs that are intended to provide more job opportunities,” Laguesma said.