THE Department of Labor and Employment (DOLE) expects only limited employment dislocation from the implementation of the daily minimum wage increase in Metro Manila, with around 1.1 million workers projected to benefit from the adjustment.
Government estimates indicate that about 12,000 workers could face displacement, although the overall impact of the wage order is expected to remain positive.
‘There will be a slight dislocation of around 12,000 employees. But overall, the picture provided to us was that there will be a 2.7 percent growth because of this,’ Labor Secretary Francis N. Tolentino said during a media forum on Tuesday.
The projections were based on the general equilibrium model used by the government in evaluating wage adjustments, which takes into account inflation, labor costs and other economic indicators.
‘Some employers may rotate workers, retrench employees or reduce their workforce. But overall, the picture provided us was that there will be a 2.7-percent growth because of this,’ he said.
The Regional Tripartite Wages and Productivity Board-National Capital Region also considered the positions of labor groups, employers and government agencies during consultations before issuing Wage Order No. 27.
Employer concerns over higher operating costs were among the factors weighed during the deliberations, although the labor chief maintained that the projected disruptions remain small compared with the number of workers expected to receive higher pay.
‘The disruption is very minimal…. The overall impact is much bigger because 1.1 million will immediately benefit starting July 25,’ Tolentino said.
The labor chief also defended the regional wage-setting system, saying it helps moderate inflation by preventing labor costs from increasing nationwide at the same time.
According to Tolentino, the staggered implementation of wage orders allows regional wage boards to observe the effects on workers, enterprises and local economies before succeeding adjustments are considered.
Assistance for MSMEs
To address employer concerns over the wage increase, DOLE will tap its Adjustment Measures Program (AMP) to provide immediate assistance to affected micro, small and medium enterprises.
The program may finance equipment and other productivity-enhancing measures to help smaller businesses manage higher labor costs while preserving available capital for wage adjustments.
‘For example, DOLE may fund a restaurant’s cash register or point-of-sale system so that its additional capital can instead be used for wage adjustments,’ Tolentino said.
AMP is intended particularly for enterprises with limited capital that may struggle to absorb the full impact of the wage increase immediately.
Assistance under the program includes capacity building, business enhancement, product development, labor compliance and industrial peace-building measures aimed at strengthening the resilience of MSMEs against economic disruptions.
Qualified establishments facing difficulty in complying with the new rates may also apply for exemption certificates with DOLE within the prescribed 75-day period, subject to existing requirements and qualifications.
Tolentino has also encouraged MSMEs to strengthen their representation in the tripartite wage-setting process so their concerns can be more clearly raised during future wage deliberations.
Through the AMP and the exemption mechanism, DOLE aims to give affected establishments pathways to adjust to the new wage order while ensuring that covered workers receive the mandated increase.