CARTOON BY: AARON PAUL CARIL
EDITORIAL
₱200 Wage Increase: Just and Realistic?
The push for a national minimum wage hike is back on the national agenda. For the first time since the 1989 Wage Rationalization Act, both houses of Congress considered increases to help Filipino workers—₱100 per day from the Senate and ₱200 from the House. For millions facing rising prices, the move offers hope for a fairer, more livable income.
Supporters of the wage hike argue that it’s long overdue. As of early 2025, wage and salary workers made up over 30 million of the labor force, with around 4 million earning just the minimum. An increase would provide direct, badly needed relief for these workers, many of whom are in contractual or informal jobs, or working in agriculture.
But critics—especially from business groups and the government’s economic team—warn that the picture isn’t so simple. For starters, the cost to employers is more than the ₱200 itself. When the minimum wage increases, so do all related benefits tied to it: Social Security System (SSS) premiums, PhilHealth contributions, 13th-month pay, holiday pay, night differentials, and more. These proportional increases mean that the real cost to employers could be significantly higher.
There’s also what economists call wage distortion. This happens when increasing the minimum wage shrinks the pay gap between entry-level workers and more experienced or senior staff. Companies may feel pressured to raise wages across the board to maintain fairness and morale—not just for minimum wage earners. For small and medium-sized businesses already operating on tight margins, this can be a tough pill to swallow.
That’s where fears of inflation, job losses, and reduced hiring come in. The President’s economic advisers estimate that a ₱200 hike could raise inflation by 2 percentage points, cost 300,000 jobs, and knock down GDP growth by up to 1.6 percentage points. At the same time, some economists caution against assuming disaster. Recent studies abroad, and even preliminary findings from independent economic researchers in the Philippines, suggest the adverse effects of minimum wage hikes might be smaller than we once thought, especially in sectors where labor is already underpaid and demand remains stable. However, more localized and independent research is essential to truly understand what a nationwide increase would do in the Philippine context.
Politics, too, plays a role. While both chambers of Congress seemed on board with raising wages, they ran out the clock and failed to pass a final version before the end of session. Some speculate this was partly driven by election strategies rather than pure policy intent. Still, key senators have vowed to revisit the issue in the next Congress. Others warn that going beyond ₱100 could bring economic strain.
In the end, the debate is about trade-offs: boosting the quality of life for workers while safeguarding business viability and economic stability. It’s not a choice between heart and head—it’s an invitation for all sides to engage in fact-based, honest, and inclusive conversation. Because any solution, to truly work, has to be both just and realistic.