Economic team warns of ‘dangerous repercussions’ of P200 wage hike

From left: Finance Secretary Ralph Recto, Sec. Frederick Go of the Office of the Special Assistant to the President for Investment and Economic Affairs, Budget Secretary Amenah Pangandaman, Department of Economy, Planning and Development Secretary Arsenio Balisacan, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona, former BSP Deputy Governor Francis Dakila

MANILA, Philippines — The Marcos administration’s economic managers warned of the “dangerous repercussions” of the proposed P200 legislated wage hike, saying the move could stoke inflation and hurt small businesses.

In a joint statement on Wednesday, economic officials said a P200 increase in wages could raise inflation by about 2 percentage points (ppts), while a P100 hike may add 0.7 ppts.

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“The substantial minimum wage increase may lead to higher production costs, which could result in higher prices that may disproportionately affect low-income households,” they said.

“MSMEs (micro, small and medium enterprises), which constitute over 90 percent of all business enterprises in the country, and who considerably rely on minimum wage earners, may struggle or not be able to absorb the mandated wage increase per worker,” they added.

READ: MAP joins opposition to P200 legislated wage hike