A national daily minimum wage of ₱750 could inflict serious economic damage and lead to widespread job losses, according to economists from De La Salle University (DLSU).

In a December 2025 article published in The Philippine Review of Economics titled “Nationalizing the minimum wage: Can the Philippines take the toll?” DLSU economists Justin Raymond S. Eloriaga, Marites M. Tiongco, and Ceasar C. Cororaton warned that a national minimum wage of ₱750—proposed during the 17th Congress in 2018 under the stalled House Bill (HB) No. 7787—would result in a “magnitude of economic contraction.”

They noted that the debate over a national minimum wage intensified following the passage of HB 11376 in 2025, the first legislated wage hike in 36 years, amid concerns that regional wage boards have struggled to keep pace with economic disruptions from the Tax Reform for Acceleration and Inclusion (TRAIN) Law and the Covid-19 pandemic.

However, using a regional partial computable general equilibrium (CGE) model, the economists found that imposing a ₱750 daily minimum wage without productivity gains would trigger a sharp economic contraction, with real gross domestic product (GDP) falling by 8.31 percent and formal employment declining by as much as 64 percent, pushing tens or even hundreds of thousands of displaced workers into the informal sector.

The GDP contraction would be “driven by production losses of 5.8 to 13.8 percent across regions,” they said, adding that massive formal sector job losses—particularly in National Capital Region (NCR) and Cavite, Laguna, Batangas, Rizal, and Quezon (CALABARZON)—would strain already fragile informal labor markets.

Even with productivity gains of up to 20 percent, GDP would still shrink by nearly five percent, while inflation outcomes would vary widely across regions. Poverty reduction under these scenarios remains marginal, while informal workers would suffer significant income losses due to the influx of displaced labor, the economists said, noting that wages in the informal sector could fall by as much as 72.1 percent.

Their study found that only a more moderate, regionally aligned wage increase—paired with productivity improvements—would limit economic damage, underscoring the risks of uniform nationwide wage hikes without complementary productivity and formalization policies. The economists stressed that while raising wages is well intentioned, it could come at the cost of jobs if not carefully designed.

To address the issue, they urged a reform strategy that balances fair wages with job sustainability, cautioning against a one-size-fits-all national wage and instead recommending adjustments based on regional economic capacity. Wage increases, they said, should be paired with productivity-enhancing measures such as skills training for displaced workers, technology support for small and medium enterprises (SMEs), infrastructure upgrades in lagging regions, and streamlined regulations to reduce labor costs.

The economists also called for strengthening—rather than abolishing—regional wage boards, recommending inflation-linked wage adjustments, more frequent reviews during periods of high inflation, broader worker representation, and improved technical support through economic modeling. They emphasized that past wage misalignment reflects institutional weaknesses, not flaws in the regional wage-setting system itself.

In addition, they recommended stronger social protection measures to complement wage reforms, including expanded Pantawid Pamilyang Pilipino Program (4Ps) coverage for working poor households, earned income tax credits, subsidized social insurance contributions, and stricter labor inspections to reduce working poverty.

While minimum wages remain an important policy tool, the economists cautioned that they are a blunt instrument, warning that dramatic increases could produce serious unintended consequences, particularly for vulnerable informal workers. As the Philippines continues its post-pandemic recovery, they concluded that policymakers should avoid quick fixes and instead pursue evidence-based, targeted reforms that promote fair wages, protect jobs, and support inclusive growth.