ILOILO City – Thousands of workers in Western Visayas could face the risk of losing their jobs instead of enjoying higher pay as the newly approved P40 to P45 daily minimum wage increase threatens to push financially struggling businesses into layoffs, price increases and possible closure, the Philippine Chamber of Commerce and Industry (PCCI) Iloilo warned.
PCCI Iloilo president Jerduen Dongor cautioned that the wage adjustment, although intended to help workers cope with rising living costs, could have unintended consequences for micro, small and medium enterprises (MSMEs) already burdened by soaring fuel, electricity, transportation and raw material expenses.
“Businesses unable to absorb the additional labor costs could be forced to reduce their workforce, pass the expenses on to consumers or shut down altogether,” Dongor said.
The warning comes as Wage Order No. RBVI-30, approved by the Regional Tripartite Wages and Productivity Board (RTWPB), awaits review and reaffirmation by the National Wages and Productivity Commission (NWPC).
Under the wage order, minimum pay for workers in non-agricultural establishments employing more than 10 workers would increase from P550 to P590 daily.
Workers in non-agricultural establishments with 10 or fewer employees would receive P565, up from P525, while agricultural workers would get P565 from the current P520.
The adjustments represent increases of approximately 7.3 percent, 7.6 percent and 8.7 percent, respectively.
P120,000 in additional monthly expenses
Dongor illustrated the financial burden by citing a business employing 100 workers, where a P40 daily wage increase would translate into P4,000 in additional daily payroll expenses, or P120,000 over a 30-day period.
“So medyo bug-at siya,” he said.
The additional expenses could climb further because employers would also need to consider adjustments in salaries for longer-serving employees to preserve reasonable pay differences.
“The gap sang minimum wage earners naton kag sang aton nga mga empleyado nga medyo dugay na, gamay lang, so need namon mag-increase. Basically, ma-increase tanan,” Dongor explained.
Employers would also have to shoulder corresponding increases in mandatory contributions, including those to the Social Security System (SSS) and Pag-IBIG Fund.
Dongor stressed that these additional financial obligations could be particularly difficult for smaller establishments operating on limited capital and narrow profit margins.
“Ang subong nga tikang nga pasakaan ang minimum wage naton nga P40 to P45, ginatan-aw naton nga dako nga negative nga impact sa mga negosyante, especially sa mga MSMEs naton,” he said.
He emphasized, however, that the chamber was not against improving workers’ compensation.
“This is not a conflict between the employee and employer. Kun kami ang sundon, gusto gid namon ihatag ang maayo nga pangabuhi,” Dongor said.
Higher prices could erode wage gains
Beyond the threat of unemployment, Dongor warned that consumers could face another round of price increases as businesses attempt to recover their higher operating expenses.
Such adjustments could affect the affordability of goods and services, potentially reducing the purchasing power of workers despite their higher wages.
The chamber president said the wage adjustment comes amid persistent economic pressures, including rising fuel prices, increased logistics expenses and the weakening Philippine peso.
He attributed part of the pressure on business costs to the continuing crisis in the Middle East.
“Dako ang epekto sang fuel prices. Ang dollar subong P63 na. This is the lowest value sang peso,” he said.
Dongor explained that a weaker peso increases the cost of imported raw materials and products, further squeezing businesses dependent on foreign suppliers.
“Well, kun naga-export kita, may opportunity man tani. Galing we are net importing, we are not exporting. So amo na ang medyo dako nga challenge sa aton subong,” he said.
Business sector sought smaller increase
PCCI Iloilo had earlier submitted a position paper to the regional wage board recommending a lower adjustment ranging from P0 to P30 instead of the approved P40 to P45.
The chamber also sought the postponement of the increase to give businesses more time to recover from mounting operating expenses.
“Ang amon recommendation didto actually P0 to P30, kay bisan gamay lang tani bala, basta may ara man,” Dongor said.
He maintained that wage adjustments should strike a balance between improving workers’ incomes and ensuring that businesses remain financially viable.
Dongor also suggested exploring performance-based incentives as an alternative or supplementary mechanism for rewarding employees without imposing the same level of mandatory additional expenses on employers.
Gov’t intervention urged
With the wage order already approved at the regional level, Dongor urged the government to provide stronger financial and technical assistance to MSMEs to prevent possible job losses and business closures.
He called for more accessible financing programs, particularly low-interest loans with minimal or no collateral requirements, to help smaller enterprises manage their cash flow.
The government should also expand market access opportunities and provide training programs to improve the competitiveness and productivity of local businesses, he said.
“Ang request naton nga ang government maging supportive man sa mga MSMEs naton kay ang MSME dako gid na nga bulig sa sektor sang ekonomiya,” Dongor said.
He emphasized that timely government intervention could help businesses comply with higher wage requirements without immediately resorting to layoffs, price increases or closure.
Despite the challenges, Dongor assured that PCCI Iloilo would continue assisting the business community.
“Ang commitment sang PCCI, padayon lang gid kita. Kun ano ang masarangan sang PCCI kag sang business sector, himuon gid naton,” he said.
Meanwhile, Department of Labor and Employment (DOLE) Region 6 director and RTWPB chairperson Atty. Sixto Rodriguez Jr. said the wage order was signed and submitted to the NWPC on October 21 for review and reaffirmation.
The increase cannot take effect until the required clearance is secured./PN
