Why the wage hike bill died

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While the Filipino public was focused on the failure of the Senate to proceed with Vice President Sara Duterte’s impeachment trial on the last day of the 19th Congress, the labor sector suffered its own painful loss in the legislature.

On Wednesday, June 11, the legislated wage hike bill languished as the 19th Congress adjourned sine die. Labor leaders from various political standpoints had long lobbied for the bills seeking a daily wage increase of at least P100 for minimum wage earners. It was the closest the sector had gotten to a legislated wage increase since 1989.

It was an uphill battle, since some of the people they needed the most were never on their side — including Labor Secretary Bienvenido Laguesma, and President Ferdinand Marcos Jr.

The Senate approved the bill granting a P100-daily increase in February 2024, while the House of Representatives approved the P200-version on June 4.

Both chambers wanted an increase. It was only a matter of how much. But with the failure to agree in time, the bill fell through the cracks. 

This brings the measure back to square one, as the sector will have to look for new proponents in the 20th Congress who will fight for it until the very end. 

Against odds

Labor leaders had strongly lobbied for the bill for around two years, with it being a key theme in Labor Day protests in 2024 and 2025. Usual calls remained — the end of contractualization, and better observed freedom of association, but Filipino workers were especially fed up with low wages for minimum earners, and the crumbs of increases they received from regional wage boards.

Early on, reporters asked Laguesma where he stood on the proposals. He did not take a definite stance, but warned of economic implications of raising the salaries of millions of minimum wage workers. Still, he said that the labor department’s job was to enforce policy, and so if Congress decided to pass the law, he as the secretary would oblige.

Laguesma sitting on the fence of the debate irked some labor groups. In June 2024, some mounted calls for him to resign.

These calls were heeded — but much later in May 2025, when Marcos called for the courtesy resignations of all his Cabinet secretaries in a bid to “recalibrate his administration.” Labor-related issues often topped public surveys about Filipinos’ top concerns, particularly job creation in April. Though Laguesma was one of the names floated for non-retention, Marcos decided to reject his courtesy resignation. 

For labor lawyer Sonny Matula, Laguesma has his strengths and weaknesses. His organization Federation of Free Workers (FFW) recognizes his pro-worker accomplishments in his career as an arbiter.

“Secretary Benny is an old hand at the department of labor…. In our experience with our cases, he did not leave us behind in the cases which he decided,” said Matula, pointing to his successes for workers in collective bargaining agreement deadlocks.

But as a convenor of the National Wage Coalition, Matula also lamented Laguesma’s conservative stance on the wage hike bill.

The bill was never a priority of the Marcos administration. On Labor Day 2024, the President snubbed calls to certify the bill as urgent, but ordered regional wage boards to initiate a review of their respective minimum wages at least 60 days before the anniversary of their latest wage orders. In simpler terms, he still believed that the current system was working.

A year later, Marcos’ stand remained unchanged.

“The President’s only directive is to follow what is in the Labor Code, and he also gave an order to the Regional Tripartite Wages and Productivity Boards to review the wages of our countrymen in every region,” Presidential Communications Office Undersecretary Claire Castro said in April.

“When it comes to salary increase, we need to hear the sides of employers and employees so that we can give a good and reasonable salary for our countrymen,” she added.

Economic impact

After the House finally passed their version of the bill, Marcos’ economic team — comprised of the special assistant to the President for investment and economic affairs, the Department of Economy, Planning, and Development, the Department of Finance, the Department of Budget and Management, the Department of Trade and Industry — along with the Bangko Sentral ng Pilipinas, put out a position paper opposing a blanket wage increase.

In the team’s computation, they claimed that a P100-daily wage hike would result in a 0.2% increase in unemployment, and a 0.6% increase if the wage hike was P200.

They estimated some 105,000 to 300,000 more Filipinos becoming unemployed if the policy was passed, and a higher inflation rate by 0.7% to 2%.

The team pointed to the wage increases leading to higher production costs, higher prices for goods and services to afford the increased pay, and possible widening of regional disparities, with poorer regions most negatively affected.

“Rather than a one-size-fits all legislated wage hike, we support existing measures such as (i) strengthening the implementation of the minimum wage law to increase compliance; (ii) encouraging collective bargaining system and other voluntary mechanisms at the firm level to promote workers’ welfare, and (iii) strengthening the linkage between wages and productivity,” they said in the paper, which Rappler obtained from Sentro ng mga Nagkakaisa at Progresibong mga Manggagawa (Sentro).

But scholars from the University of the Philippines (UP) School of Labor and Industrial Relations disagreed. In a recent study on possible effects of the wage hike, researchers Czar Joseph Castillo, Adolfo Jose Montesa, and Benjamin Velasco created a model to determine whether regions that issued wage hikes affected employment.

The results varied — wage increases may have no impact, a positive impact, or a negative impact on employment.

“The literature tells us that a catastrophe is not imminent. Instead, our study concludes that given the right set of policies we can achieve both goals of wage recovery for workers and low unemployment,” the study read.

The researchers also pointed to the “natural experiment” in 1989, when the last legislated wage hike was enacted. The P25 across-the-board salary increase in the wage rationalization act translated to a 40% increase, but “did not trigger an economic crisis.” 

The UP study and Matula had similar views on how the increase in purchasing power for minimum wage earners will go back to the informal sector as well, contrary to the point pushed by critics that the informal sector will get left behind while private sector workers get an increase.

“Hindi naman dinadala ng mga manggagawa ‘yan sa Bali, Indonesia para magbakasyon, o pupunta sa Singapore para manood kay Taylor Swift. Dito naman ginagastos ‘yung mga pera ng mga manggagawa sa Pilipinas,” said Matula.

(The workers will not bring [their increases] to a vacation in Bali, Indonesia, or go to Singapore to watch Taylor Swift. Workers spend their money here in the Philippines.)

“Sahurang manggagawa ang bumibili sa tindera sa kalsada, suki sa sari-sari store, sumasakay sa tricycle at jeepney (Salaried workers buy from street vendors, are regulars at sari-sari stores, and take tricycles and jeepneys). In fact, formal and informal workers live in the same household, so their interests intersect and coincide,” the researchers wrote.

In the end, the Philippine government sided with its economic team, which shared sentiments with employers’ groups who sounded the alarm.

Congressional tensions

Aside from the economic debate, the House and Senate endured their own tensions as the bill was about to expire. It was unfortunate for the labor sector that their bill got caught up in the emotions in the Vice President’s impeachment trial.

Despite the House approving its P200 version on June 4, it was not until June 9 that it transmitted its version to the Senate. Senate President Francis “Chiz” Escudero said the Senate had no interest in adopting the House version, since it did not see the basis for the double amount that it approved.

Senator Joel Villanueva, who chairs the upper chamber’s labor committee, asked the House to adopt its P100 version. But his House counterpart, Rizal 4th District Representative Fidel Nograles, rejected this, and wrote to Villanueva at the eleventh hour for the immediate convening of the bicameral conference committee on Wednesday.

“‘Yung impeachment, pinadala ‘nyo huling araw ng session, ito ganoon din? Huling mga araw ng session namin? Tapos ayan na naman kayo, mamadaliin ‘nyo na naman kami? Na parang kami ang may kasalanan? Eh pinasa namin ‘tong wage hike…February 2024. Mahigit isang taon nilang inupuan ito. Tapos biglang ngayon sila ‘yung gigil na gigil?” Escudero said in a Wednesday press conference.

(You brought [Vice President Duterte’s] impeachment to us on our last day of session, and you did it again with this, on the waning days of our session? And there you go again, rushing us, like we’re at fault? We passed this wage hike in February 2024. They sat on it for over a year. And now they’re the ones agitated?)

And just like the impeachment trial, there was no more place for the wage bill in the 19th Congress. Both chambers refused to budge and adopt the other’s version on their last day, which would have done away with a bicameral conference and sent the bill straight to Marcos’ desk.

On June 12, the House put out a strongly worded statement against the Senate for its refusal to discuss the bill.

For labor group Sentro, the disagreement was the final nail in the coffin. Sentro secretary general Josua Mata said House Speaker Martin Romualdez had “promised” its passage. Though a higher amount was always better for the labor groups, Sentro was still open to the House’s adoption of the P100 version just for the bill to move forward.

“This is probably one of the worst Congresses we’ve had [for workers]. Their pandering to corporations is glaring, seen by their granting of benefits and tax breaks left and right, while they have given absolutely nothing to workers,” said Mata.

Continuity

The President’s decision to keep Laguesma in his Cabinet indicates his continued belief in his governance for the labor sector. 

In Laguesma’s message following his retention, he said: “The only way to repay and do justice to this magnanimity is by committing and seeing to it that the DOLE performs well and does its share…. DOLE will continue to be a responsible, responsive, accessible, action-driven, and results-oriented institution.”

The commitment is needed, especially now that the Philippines has again landed on the International Trade Union Confederation’s list of 10 worst countries for workers for the ninth straight year. More than just wages, the labor sector continues to grapple with perennial issues that make it difficult to work in the Philippines.

“We still have our own share of criticism [against Laguesma], especially on the issue of contractualization, which the government has yet to respond to until present…We’ve also asked him to respond to the reported killings of trade union leaders, give them clear investigations, get perpetrators convicted, and give justice to the victims,” said Matula.

With similar pro-worker bills back to zero, the 20th Congress, and the second half of the Marcos administration, has much to think about when it comes to looking after its almost 50 million workers. – Rappler.com