BUSINESS and labor sectors in Cebu are divided over the P200 daily minimum wage hike bill recently approved on third and final reading by the House of Representatives.
While a labor group supports the measure, business leaders and organizations have warned of its potentially devastating impact on micro, small and medium enterprises (MSMEs).
Labor group AMA-Sugbo-KMU has urged lawmakers to enact the measure before the 19th Congress adjourns on June 13, 2025. It said the increase is necessary to help workers cope with rising prices of basic goods and services such as food, transportation and electricity.
“Lawmakers have a mandate to respond to workers’ calls for a living wage, as this is enshrined in our Constitution. They must also examine the growing wealth gap between poor workers and wealthy business owners and assess the income earned by workers who create the actual products versus the massive earnings of major corporations,” the group said.
Business fears: Inflation, closures
Local business leaders argue that a legislated P200 wage hike poses existential risks to MSMEs, which form the backbone of the Philippine economy.
They warned of inflation, job losses, business closures and reduced competitiveness. Instead of a fixed increase, they are pushing for productivity-driven wage adjustments, upskilling programs and government support through digital transformation and subsidies.
“The business sector, most especially the MSMEs, will be devastated if such a nationally legislated 200 wage increase becomes law,” said Steven Yu, past president of Mandaue Chamber of Commerce and Industry (MCCI).
They also emphasize the role of Regional Tripartite Wages and Productivity Board (RTWPBs) in setting region-specific wages to account for local conditions.
On June 4, the Lower House approved the wage hike measure with 171 votes in favor, one against and no abstentions. Trade Union Congress of the Philippines (TUCP) party-list Rep. Raymond Democrito Mendoza called the approval historic, noting it would be the first legislated national wage hike in 36 years.
“The country’s largest labor center, TUCP, now calls on the Senate and House leadership to immediately convene the bicameral conference committee to reconcile their respective versions — P100 from the Senate, P200 from the House — and produce a final enrolled bill with utmost urgency and resolve,” Mendoza said.
In July 2024, the Senate passed its version of the bill, which provides for a P100 across-the-board wage hike.
The bicameral conference committee will reconcile the two versions before submitting the final measure to President Ferdinand Marcos Jr.
A path forward?
Business leaders advocate alternatives to a legislated hike: productivity-driven wage adjustments, upskilling programmes and government support through subsidies, tax incentives and digital transformation.
MCCI president Mark Ynoc said there is a need for a balanced, evidence-based approach. While acknowledging workers’ right to fair compensation, he warned that businesses still recovering from the pandemic and grappling with inflation may be forced to cut jobs or freeze hiring.
Ynoc proposed performance-based wage adjustments and region-specific wage-setting mechanisms.
In a separate statement, Yu also warned that a blanket P200 wage hike could hurt the business sector. He cited risks such as closures, reduced investments and higher consumer prices.
Yu pushed for skills-based compensation and more investments in education and healthcare to address wage and productivity issues sustainably.
The Philippine Chamber of Commerce and Industry (PCCI) echoed these concerns, saying the proposed hike could increase inflation, harm the informal sector and lead to shutdowns.
It criticized the move as undermining the RTWPBs, which set region-appropriate wages.
PCCI urged Congress to strike a balance between worker welfare and business survival.
“The unilateral wage hike was done without consideration to the impact it will have on the economy — on the price of goods and services, on those working in the informal sector who account for about 50-60 percent of the population, and on the micro and small enterprises that comprise 96 percent of the total number of enterprises in the country,” it said.
The Cebu Chamber of Commerce and Industry (CCCI) also opposed the measure, warning it could strain its predominantly MSME membership.
The chamber recommended a gradual implementation, digital transformation and government support such as wage subsidies and tax incentives. It also called for a multi-sectoral mechanism to address economic challenges and support job-generating businesses.
“The Cebu Chamber stands firm in its commitment to support workers and uphold fair labor practices. However, we believe that such wage policies must be complemented with reforms that enable businesses to remain viable and competitive,” CCCI said.
“We call on our legislators and government agencies to take urgent action in modernizing bureaucratic systems and simplifying tax processes to ensure that businesses, especially MSMEs, will continue to thrive and contribute to local and national economic growth and development,” it added. / CAV, CDF, KOC, TPM