The country’s largest business associations, which employ the bulk of formal workers in the Philippines, totally rejected the planned legislated wage hike stating this move is more inimical to the estimated 42 million informal workers in the country as they cannot benefit from such a wage hike. Heads of eight business associations in the country signed a position paper addressed to Senator Jinggoy E. Estrada, chairman of the Senate committee on labor, employment and human resources expressing strong opposition to the bill filed in the Senate seeking increase in daily minimum wage. Senate President Juan Miguel Zubiri has filed a bill seeking to raise the daily minimum salary rate in the National Capital Region by P150 to P720 from the current P570, approximately $10.14. The eight organizations include the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines (ECOP),  Philippine Exporters Confederation, Inc. (PhilExport), Federation of Filipino Chinese Chambers of Commerce and Industry (FFCCCI), IT & Business Process Association of the Philippines (IBPAP), Philippine Hotel Owners Association (PHOA), Foreign Buyers Association of the Philippines (FOBAP), and United Portusers Confederation of the Philippines of the Phils., Inc. (UPCPPI). While the groups agreed with the concern of Estrada and the authors of the bills seeking wage hike on how the effects of inflation have continued to dampen the purchasing capacity of Filipinos, they also explained that a legislated wage hike only benefits a small percentage of the country’s total workforce. “It may appear to be the easier and logical solution, only a small percentage of the total workforce,” they said, pointing out that only 16 percent or about eight million in the formal sector out of the 50 million in total number of Filipino workers will be able to benefit from this proposal. Large firms, however, are capable of paying the wage increase, but they only make up less than two percent of all Philippine companies. “For even as there appears to be this short-term relief to a ‘happy’ few, we also should not ignore that the rising inflation has also negatively impacted businesses,” the groups said. Of the 50 million total workforce in the country, the groups said, 98 percent are micro, small and medium enterprises (MSMEs) that have suffered the brunt of the pandemic and most of which may still be closed to this day. “It is likewise worthwhile noting that these MSMEs are also the employers of the same Filipinos whom these bills are aiming to help. If the proposal for increased wages is approved, these employers may have to further increase the prices of their products, reduce the number of their workers, or simply close down,” the letter dated May 17, 2023 stated. The groups also attached a matrix to show that the Philippines already has the highest minimum wage in ASEAN. The matrix from the National Wages and Productivity Commission showed the Philippines’ $10.14 daily minimum wage rate is second only to Malaysia with $11.16 as of August 2022. Indonesia is third highest with $10, followed by Thailand’s $9.23 and Vietnam’s $6.6.  Singapore has no legislated minimum wage. In terms of inflation, the groups even surmised that the higher prices of goods in the Philippines  compared with the counterpart economies “may in fact already be a direct effect of the higher minimum wages in our country.” In addition, they warned that “This proposal (legislated wage hike) then becomes a sure threat against efforts to invite more investors when the CREATE and other investment-related laws were passed.” They warned that the grimmer picture in the proposal is the staggering 84 percent, who are workers in the informal sector, who be left behind “unhappy” because they cannot partake in the wage hike. “These informal workers are not included in bill, as they are not expected to feel any gain because most of them work on their own with no employer. This 84 percent represents around 42 million workers that include farmers, fishermen, market vendors, jeepney drivers, tricycle drivers, and home-based small entrepreneurs that comprise the silent majority whose situation will worsen with the bill’s passage, as they have to pay higher for their purchases once businesses start to increase prices,” the letter added. “These are the people who will then start trooping to government offices to ask for (additional) ‘ayuda’ when this burden becomes unbearable already. It will then be relevant for them to also be invited and heard in the wage hike hearings as among the stakeholders,” the group said. Instead of a legislated minimum wage salary, the groups reiterated their position that any wage hike should be discussed at the regional tripartite wage board, which has the mandate to adjust wage rates. “For this reason, the business community feels more comfortable that they continue playing this role backed up by years of relevant and on-the-ground information,” the employers added. They also urged the Senate committee to consider getting the assistance of agencies especially those in the Economic Cluster such as the Departments of Trade and Industry and Labor and Employment and the National Economic and Development Authority who can handle the pencil pushing. “Needless to say, such an issue truly needs more time and accurate information to help ensure that efforts are truly responsive to the common good,” they added. They also welcome the creation of the technical working group here the informal sector and agencies mentioned above can also provide inputs. The position paper was signed by PCCI President George T. Barcelon; ECOP President  ECOP Chairman Edgardo G. Lacson; Philexport President Sergio Ortiz-Luis Jr.; FFCCCII President Cecilio K. Pedro; IBPAP President  Jack Madrid; IBPAP President Arthur M. Lopez; PHOA President Arthur M. Lopez; FOBAP President Robert M. Young; and, UPCPI President Nelson M. Mendoza.