Amidst soaring prices of prime commodities triggered by the prevailing energy crisis, Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan warned against plans for an across-the-board wage hike, stressing that wage adjustments should continue to be determined at the regional level.
In a statement, the socioeconomic planning chief clarified that caution is of utmost importance: “We would want all the parties to discuss and agree, particularly between labor and management, and with [the] government also facilitating that process.”
But at the same time, Balisacan asserted that the government’s position regarding salary increases has always been that wages have to be determined at the local level, through the regional wage boards.
Under Republic Act 6727, minimum wages are determined by regional tripartite wage boards composed of labor, employer and government representatives. Lawmakers abandoned the previous practice of legislating wages in 1989 and proponents of the shift said that regional adjustments would better reflect varying economic conditions across the country.
Early this week, several labor organizations urged President Ferdinand Marcos Jr. to suspend or scrap fuel taxes and push for wage increases, citing that the continued rise in oil prices have overburdened workers with the high cost of living due to the high prices of food and basic items.
The labor groups likewise called on the chief executive to use the government’s authority under RA 12316 to expand tax relief, including cutting or suspending excise taxes, and the value-added tax on fuel.
“These measures, alongside higher wages, (a)re needed to ease the impact of inflation and protect workers’ purchasing power,” they pointed out.
However, Balisacan opposed the call while reiterating that differences in cost of living, business conditions and labor market dynamics across regions would make a uniform nationwide wage increase impractical.
“While Metro Manila faces significantly higher living costs, other regions operate under different economic realities. Applying a single minimum wage rate across all regions could create distortions, particularly in areas where businesses operate on thinner margins,” he cited.
He warned that imposing a nationwide wage hike could have unintended consequences for regional economies, including reduced investment inflows and weaker job creation.