The annual observance of Labor Day last week once again brought to the fore the urgent concerns of Filipino workers. Protesters and rallyists articulated a sweeping set of demands: a ₱36,000 monthly salary for Salary Grade 1, a ₱50,000 entry-level pay for teachers, a ₱5,000 personnel economic relief allowance, a ₱1,100 national minimum wage, and the abolition of VAT and excise taxes. These calls, while rooted in legitimate anxieties over the rising cost of living, must be weighed carefully against economic realities and the administration’s broader goal of creating “decent jobs” under President Ferdinand R. Marcos, Jr.

There is no question that Filipino workers deserve fair compensation. Inflation has eroded purchasing power, and many households struggle to meet basic needs. The aspiration for a living wage is both just and necessary. However, the challenge lies in ensuring that wage increases are sustainable, productivity-driven, and aligned with the capacity of both government and industry to absorb higher labor costs.

A legislated across-the-board wage hike to ₱1,100 nationwide, for instance, risks unintended consequences. Small and medium enterprises that form the backbone of the Philippine economy may find it difficult to comply, potentially leading to reduced hiring or even business closures. This could undermine the very objective of “decent jobs” by shrinking employment opportunities. A more calibrated approach, anchored on regional wage boards and sector-specific conditions, allows for flexibility while still pushing wages upward.

Similarly, proposals for substantial increases in government salaries, including the ₱36,000 baseline for entry-level positions and ₱50,000 for teachers, must be evaluated within the context of fiscal sustainability. The national budget already carries significant obligations in infrastructure, social services, and debt servicing. While public sector compensation should be competitive to attract talent, abrupt and across-the-board increases could strain public finances unless matched by revenue growth and efficiency gains.

The call to abolish value-added tax (VAT) and excise taxes presents an even more complex dilemma. These taxes constitute a significant portion of government revenue, funding essential services such as education, healthcare, and infrastructure. Eliminating them without viable alternatives could widen the fiscal deficit and compromise the government’s ability to deliver on its commitments. Rather than outright abolition, targeted relief —such as subsidies, tax credits, or adjustments for vulnerable sectors — may offer a more balanced solution.

What, then, are the appropriate responses?

First, government must intensify efforts to control inflation, particularly in food and energy, which disproportionately affect low-income households. Price stability is, in itself, a form of wage protection.

Second, wage adjustments should be linked to productivity and supported by investments in skills development, digitalization, and innovation. Higher wages become sustainable when they are backed by higher productivity.

Third, targeted support mechanisms — such as conditional cash transfers, transport subsidies, and expanded healthcare coverage — can provide immediate relief without distorting the labor market.

Fourth, social dialogue must remain central. Constructive engagement among labor, business, and government can yield solutions that balance equity with economic viability.

Ultimately, the pursuit of “decent jobs” is not achieved through a single policy lever but through a coherent strategy that integrates fair wages, job security, and economic growth. The demands voiced on Labor Day a serve as a powerful reminder of the work that remains. The task before policymakers is to translate these aspirations into pragmatic, sustainable reforms that uplift workers without undermining the foundations of the economy.