MANILA, Philippines -- The law that exempts minimum wage earners from paying income tax and increases the exemptions for other salaried workers took effect Tuesday, Senator Francis "Chiz" Escudero said.

Escudero urged the government to ensure the law?s implementation because inflation -- the rate of increase in the prices of basic commodities -- has effectively erased the wage increases recently granted to workers in the Philippines.

"June's 14-year high inflation rate of 11.4 percent has wiped out recent wage increases granted to public and private sector employees," said Escudero, chairman of the Senate ways and means committee, which shepherded the bill into law.

"It's back to zero. As if no wage hike was granted. Inflation has cancelled whatever value was recently added to pay envelopes," he added.

The tax exemption law grants tax breaks of from P3,630 to P25,800 a year, effectively giving fixed income earners P14 billion in additional spending power.

Escudero also projected that wage earners will still have it worse as oil prices continue to increase and are yet to peak.

He warned that the breakdown of the June inflation figures show an across-the-board increase in the prices of commodity goods "at a time when high oil prices, like a powerful storm, have yet to make a landfall."

The 1.4 million state workers will get their 10-percent salary increase this month.

On the other hand, private sector minimum wage workers in 16 out 17 regions, except the Autonomous Region in Muslim Mindanao, got their increases last month.

The daily floor pay now ranges from P196 for agriculture workers in the Bicol region to a high of P382 for a laborer in Metro Manila, who got the biggest hike of P20 a day.

Escudero pointed out that because the prices of services and goods have risen faster than the salaries of those who buy them, the projected additional purchasing power from the salary increases did not materialize.