Philippine Exporters Confederation Inc. (Philexport) has urged the government to exercise caution in granting another minimum wage increase in Metro Manila, warning that higher labor costs could hurt exporters, micro enterprises, and the broader economy at a time of elevated inflation and slowing global demand.

In a May 25 position paper submitted to the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR), Philexport said it would respect whatever decision the wage board reaches but argued that a mandated wage increase could ultimately undermine business competitiveness and employment generation.

Philexport president Sergio R. Ortiz-Luis Jr., who also heads the Employers Confederation of the Philippines (ECOP), said periodic increases in minimum wages do not necessarily benefit all workers and may widen disparities between employees in the formal and informal sectors.

“Wage-setting must continue to strike a careful balance between protecting workers’ purchasing power and preserving the viability, competitiveness, and sustainability especially of the micro enterprises,” Ortiz-Luis said in the position paper.

According to Philexport, informal workers account for an estimated 72 to 80 percent of total employment and contribute roughly 32 to 34 percent of the country’s gross domestic product (GDP), yet many remain outside the coverage of wage orders and employment benefits.

The group also noted that micro enterprises, which account for about 90 percent of businesses in the country, would bear the brunt of higher labor costs.

Instead of relying on mandated wage increases, Ortiz-Luis said workers’ welfare “is best protected through policies that sustain enterprises, preserve jobs, encourage investments and productivity, and strengthen the competitiveness of Philippine industries.”

The exporters’ group made the appeal as inflation accelerated sharply in recent months. Philippine Statistics Authority (PSA) data showed headline inflation rising to a more than three-year high of 7.2 percent in April from 4.1 percent last March, while Metro Manila inflation climbed to 5.5 percent from 3.5 percent over the same period.

While workers are struggling with higher prices of food, transportation, energy, and other necessities, Philexport said employers are facing the same inflationary pressures through higher operating costs.

“These rising expenditures are particularly difficult for exporters and micro, small, and medium enterprises (MSMEs) that operate within highly competitive global and domestic supply chains, where pricing flexibility is limited and production costs are benchmarked against neighboring Association of Southeast Asian Nations (ASEAN) economies,” the group said.

Businesses are also dealing with weaker global demand, geopolitical conflicts, logistics disruptions, and increasing compliance requirements, it added.

Philexport warned that for labor-intensive export industries, a mandated wage increase could weaken competitiveness, resulting in reduced hiring, delayed expansion plans, shorter working hours, or even business closures.

“As such, we urge the RTWPB-NCR to carefully consider the present economic conditions affecting employers, exporters, and MSMEs before implementing further wage increases,” the group said.

Instead of wage hikes, Philexport proposed strengthening non-wage interventions such as transportation subsidies, food assistance, lower utility costs, tax relief, and other social protection measures.

According to the group, these measures would help improve workers’ purchasing power without adding to the fixed labor costs of businesses.

The RTWPB-NCR began consultations on proposed wage adjustments on May 22 with labor groups. Discussions with employers were scheduled for May 28, while a public hearing is set for June 18.

Labor groups have backed a proposed ₱200 increase in Metro Manila’s daily minimum wage.

The latest wage adjustment in NCR took effect on July 18, 2025, raising the daily minimum wage to ₱695.