P200 Daily Minimum Wage Increase

As a private citizen and long-time advocate for inclusive business and infrastructure development, I feel compelled to share my personal opinion on the ongoing national debate surrounding the proposed ₱200 legislated daily wage increase. I make this statement as an individual concerned about the welfare of our workers and the sustainability of our business environment, not as a representative of the Pampanga Chamber of Commerce and Industry, Inc. (PamCham), where I formerly served as Chairman and member of the Board.

The Philippines has long lagged behind its Southeast Asian neighbors in terms of per capita income and quality of life. A major reason is that our vast labor force remains trapped in low-wage, high-cost realities. Despite their dedication and productivity, many of our workers still struggle to meet their basic needs. The current daily minimum wage of ₱645 (NCR minimum wage rate) is simply not enough to support a family of four when accounting for rent, food, transportation, education, health care, utilities, and an emergency fund. Studies and even NGO supporters of the wage hike have said that a Filipino worker needs at least ₱1,000 a day to live decently and with dignity.

The proposed ₱200 daily wage increase, while welcome, represents only half of what is truly needed increase. Still, it is a meaningful step that must be urgently and compassionately considered by our lawmakers. I therefore call on the members of the House and Senate Bicameral Conference Committee to pass this measure with sincerity and political will. Now is the time to demonstrate true concern for the Filipino working class whose sacrifices have kept our economy afloat in times of crisis.

However, we must also recognize that this issue is not black and white. Many micro, small, and medium enterprises (MSMEs), which form the backbone of our economy are still recovering from the effects of the pandemic, inflation, and rising operational costs. Mandating a wage increase without support mechanisms may lead to layoffs, reduced hiring, closures, or a shift to informal labor outcomes that ultimately hurt the very workers we are trying to uplift.

For this reason, I strongly propose a shared wage increase scheme, where the national government shoulders 80% of the ₱200 increase, and the employers cover the remaining 20%. This approach strikes a balance between social equity and economic viability.

To fund the government’s share, I recommend repurposing a significant portion of the budget from existing assistance programs such as TUPAD, AKAP, AICS, and other “AYUDA” mechanisms. Instead of giving temporary and fragmented aid, let us invest in a more impactful and sustainable NATIONAL WAGE SUBSIDY PROGRAM that provides direct, reliable support to the working class.

This wage subsidy program should be implemented over a transitional period of at least three (3) to five (5) years. During this time, the government can absorb the larger share of the wage adjustment while the economy and the private sector recover and recalibrate. Once business conditions improve and the workers’ standard of living stabilizes, the government’s financial responsibility can be gradually transferred to the employers, who by then will be in a better position to permanently support higher wages.

Furthermore, we must recognize that investing in the right wages for our working class is not just a moral imperative, it is also a smart economic strategy. When workers are paid fairly and can meet their basic needs with dignity, their motivation, morale, and overall productivity significantly increase. A well-compensated worker is a more committed, efficient, and innovative contributor to the success of the enterprise. This higher productivity redounds to greater operational efficiency, better product and service quality, and increased profitability all of which are beneficial not just to the business sector but to the entire economy.

In addition, a well-compensated labor force becomes a stronger consumer base. Increased purchasing power fuels demand for goods and services, further stimulating business activity and job creation. This creates a virtuous cycle of growth where fair wages lead to higher productivity, which in turn drives profitability and further supports economic expansion.

To ensure fairness and prevent wage distortion, the Department of Labor and Employment (DOLE) or another relevant agency should develop clear implementation guidelines, monitor compliance, and ensure that this shared wage support is delivered efficiently and equitably.

Let us learn from our ASEAN neighbors countries like Thailand, Malaysia, and Vietnam where governments have played an active role in improving worker compensation, leading to stronger internal demand, improved productivity, and sustainable economic growth. If the Philippines truly aims to be among the most progressive and inclusive economies in the region, bold action is not optional, it is necessary.