MANILA – The proposed P100 minimum wage hike may cause an uptick in inflation and unemployment as well as negatively impact economic growth, National Economic and Development Authority Secretary Arsenio Balisacan said.

Depending on how it is implemented, a P100 pay hike could add about 100,000 to 340,000 to the number of unemployed Filipinos, Balisacan said during the SNAP Conversations 2024 virtual forum.

The Senate on Monday approved Senate Bill No. 2534, which is seeking to increase the daily minimum wage by P100 for workers in the private sector. 

“The P100 wage hike could impact negatively on the unemployment rate, raising that unemployment number from 0.2-0.7 percentage points. That's quite substantial. That will amount to something like 100,000 to 340,000 additional unemployed people,” Balisacan said. 

He said the proposed measure could reverse the gains achieved including those in terms of tempering inflation.

“Our position in NEDA is: it's not the right time. We are working very hard to sustain the momentum in reducing inflation to the target of 2-4 percent and we don't want, the last thing we want, is to reverse those gains that we achieved for the last several months.,” Balisacan said.

Inflation eased to 2.8 percent in January. However, the average inflation rate in 2023 was at 6 percent, above the government’s 2 to 4 percent target range.

But Balisacan clarified that NEDA is not against wage increases.

“We are not saying that we are against any increases in wages. In fact, we would want improvement in wages but we would rather have those wages negotiated at the regional level, because we have established regional tripartite discussions between government, firms, and workers,” he said.

“And the situations across the country are so different and so allowing those negotiations to take place at regional levels would take into account those significant differences in the labor market conditions and economic conditions in those areas,” he added.

Several employers' groups, manufacturers and restaurant operators also opposed the bill since it would be an added cost to companies, which could then be passed on to consumers in the form of increased prices of goods and services.

Layoffs, shutdowns: Lawmaker sees 3 scenarios in P100 wage hike

Labor Secretary Bienvenido Laguesma earlier said that while the Department of Labor and Employment is not against the proposed wage hike, a wage distortion will ensue if the measure pushes through.

P100 wage hike could lead to wage distortion: DOLE

Small, medium-sized enterprises can absorb P100 wage hike: lawmaker