EXPORTERS in Cebu have opposed proposals for a legislated nationwide wage increase, arguing that government should first suspend or reduce value-added tax (VAT) on essential food items and fuel to ease the cost of living.
The position comes as 18 labor groups are seeking a P100 across-the-board daily wage increase for private-sector workers, citing rising prices of fuel, food and other basic commodities.
The Regional Tripartite Wages and Productivity Board (RTWPB) 7 recently declared the existence of supervening events, allowing it to consider the wage hike petition before the usual one-year waiting period following the issuance of the last wage order.
Central Visayas’ high inflation
The board cited persistently high inflation in the region.
Central Visayas recorded the highest inflation rate among the country’s 18 regions for 10 consecutive months. Inflation in the region stood at 10.8 percent in May.
In a position paper dated Wednesday, June 17, 2026, the Confederation of Philippine Exporters (Cebu) Foundation Inc. (Philexport Cebu) said a mandated wage hike would address the symptoms rather than the root causes of inflation, which it said are largely driven by rising food, fuel, transportation, electricity and logistics costs.
“A legislated wage increase is the wrong remedy for an inflation problem,” the group said, adding that government should first reduce taxes that contribute to higher consumer prices before requiring businesses to absorb additional labor costs.
Reduce VAT on food, fuel
Philexport Cebu said suspending or reducing VAT on food and fuel would directly lower household expenses, transportation costs and logistics charges while benefiting a broader segment of the population, including informal workers, farmers, fishermen and pensioners.
The exporters’ group warned that a legislated wage increase could force businesses to adopt hiring freezes, cut work hours, delay expansion plans, accelerate automation or reduce their workforce, particularly among micro, small and medium enterprises (MSMEs) with limited financial capacity.
For exporters, the impact could be more severe as they compete with manufacturers in countries such as Vietnam, Indonesia, Thailand, India and Bangladesh, according to the group.
“Foreign buyers do not automatically pay higher prices because Philippine labor costs have increased,” Philexport Cebu said, noting that higher production costs could weaken the country’s competitiveness in attracting investments and export orders.
Prioritize measures
The group also opposed a uniform nationwide wage increase, saying economic conditions, productivity levels and business environments vary significantly across regions.
It said wage determination should remain under the RTWPBs, which were established to set region-specific wage rates based on local economic conditions.
Instead of legislating wage increases, Philexport Cebu urged government to prioritize measures that would lower the cost of doing business and improve workers’ purchasing power, including reducing electricity costs, lowering logistics expenses, investing in agricultural productivity, supporting MSMEs and preserving the regional wage-setting system.
RTWPB 7 has scheduled a series of consultations on the wage petition, beginning in Cebu City on Thursday, June 25, followed by Bogo City on July 9, Bohol on July 15 and Balamban, Cebu, on July 23. Public hearings are scheduled on Aug. 5 and Aug. 25. / KOC