Phased, selective wage hikes proposed in poor areas

The vice chair of the House committee of appropriations has suggested raising wages in areas where they are given below the poverty threshold, in yet another bid to reconcile competing interests between businesses and rising costs of living.

On Saturday, Laguna Rep. Marlyn Alonte said while she was in favor of increasing wages for minimum earners, it was “necessary to plan this properly so that small businesses are not crippled, which could harm both workers and the economy as a whole.”

She echoed an earlier proposal by Manila Rep. Joel Chua to implement the wage hike in tranches so as to not cause a major shock to the economy.

P100 in tranches

Under that proposal, Chua had recommended rolling out the P100 increase in three stages across three years: P40 in the first year, P40 in the second year and P20 in the third year in the National Capital Region, Calabarzon and Central Luzon regions.

For other regions, Chua had suggested doing a P35-P35-P30 scheme across three years.

READ: Long overdue, labor groups say of pay hike

“If the minimum wage hike is done in two or three installments and in tandem with increases in nontaxable rice subsidies from the government, employers can afford that,” Alonte said.

She pointed out the minimum daily wage in Calabarzon ranges between P385 and P520. She warned that a P100-wage hike in areas where it is already P520 could cripple small businesses. She suggested doing it instead in 2025.

Alonte acknowledged it might be timely for an increase in several fourth- to sixth-class municipalities in the region where the minimum wage is P385.

“A minimum wage hike of P100 in one go will be crippling to many small businesses throughout the [Calabarzon] region and raise labor costs too much for the bigger employers like the locators in the industrial estates and economic zones,” Alonte said.

“P385 is simply too much below the PSA (Philippine Statistics Authority) poverty threshold. The P135 gap between P520 and P385 is too wide,” she added.

According to the PSA, the monthly poverty income threshold for a family of five in the Philippines is P13,797 as of 2023 or P627.15 for minimum basic food and nonfood needs.