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More than 1.1 million minimum wage earners in Metro Manila are expected to benefit from the "largest single wage adjustment ever granted in the capital region," Bloomberg reported, citing the country’s Department of Labor and Employment.
The increase will take effect in two stages, with 60 pesos to be added on July 19 and the remaining 25 pesos on Jan. 20, 2027.
The daily minimum wage for non-agriculture workers will reach 780 pesos (US$12.73) once the hike is fully implemented. Workers in agriculture, as well as those employed by service and retail establishments with 15 or fewer employees and manufacturing firms with fewer than 10 workers, will see their daily minimum wage rise 13% to 743 pesos.
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People walk in Manila, Philippines. Photo by Unsplash |
The wage hike comes as fuel and basic goods prices in the Philippines have climbed since March amid the fallout from the U.S. war with Iran, fueling inflation and eroding consumers' purchasing power.
Inflation in the Southeast Asian country slowed to 6.8% in May from a three-year high of 7.2% in April, though it remains well above the central bank's 4% upper target.
Metro Manila, which comprises 16 cities, currently has the country's highest legislated daily minimum wage.
The living wage for a typical family of five in the capital region is 1,289 pesos, according to think tank IBON Foundation.
John Paolo Rivera, a senior research fellow at the state-run Philippine Institute for Development Studies, told Nikkei Asia that the higher wage would offer "meaningful relief" to workers by "helping augment purchasing power in a high-inflation environment and supporting household consumption."
But it could also raise costs for micro, small and medium-sized enterprises, which may raise prices or slow hiring in response, he added.
"The overall impact will depend on how firms adjust and whether productivity gains accompany higher wages," he told the financial newspaper.
The Trade Union Congress of the Philippines, meanwhile, criticized the two-tranche implementation and described the increase as "grossly inadequate in the face of the collapse in workers’ purchasing power," as quoted by Bloomberg.
