Economic team opposes P200 daily wage increase

Dangerous • Slower growth • Retrenchment repercussions • Hike in prices • Shortened workdays • Inflation to accelerate by 2%

- By DERCO ROSAL

Raising the minimum wage by P200 would have “dangerous repercussions,” including hurting the country’s economy, small business owners, and driving a spike in consumer prices, according to the Marcos administration’s economic managers.

This comes as the public has intensified their call for the immediate signing into law of the P200 daily wage hike for minimum wage earners passed a few days ago by the House of Representatives. The Senate had earlier passed in February 2024 a P100 wage increase.

With the differing versions of the proposed wage hike, the House of Representatives called on the Senate to immediately convene the Bicameral Conference Committee to reconcile the differences.

The Senate and the House need to agree on an amount in a bicam hearing, ratify the resulting harmonized measure and send it to Malacañang for President Marcos' signature.

6% to 8% growth eyed in 2025 the economic team, however, said that enacting a legislated wage increase could hurt the growth of the gross domestic product (GDP), noting that a P200 increase might slow growth by 1.6 percentage points, and a P100 hike by 0.5 percentage points.

As a result, GDP would grow by 4.4 percent and 5.5 percent, respectively.

"Both scenarios are predicted to result in the economy missing the lower end of the GDP growth target range," they said in a joint statement released on Wednesday, June 11. The government is targeting to grow the local economy by six percent to eight percent this year.