Every time a minimum wage is set, the public sees the final amount. It rarely sees how that amount was determined.
Workers want to know whether the increase will keep up with food, housing, transport, electricity, and other needs. Employers ask whether they can absorb the added cost. Public debate quickly focuses on the amount: Is P50 enough? Should it be P80? Why not P100 or P200?
But an earlier question deserves attention: How should the increase be determined? That may be the missing reform in the Philippine wage debate.
When the process becomes an issue. Recent events in Metro Manila show that wage disputes can involve not only the amount of an increase, but also how it was determined.
National Capital Region (NCR) Wage Order No. 27 granted an P85 daily minimum wage increase in two tranches: P60 beginning July 25 and another P25 in January 2027. Two construction companies challenged the order before a Pasig court, arguing that employers’ capacity to pay had not been properly considered. The court issued a temporary restraining order on July 30 and later a preliminary injunction on Aug. 13, suspending implementation while the case is pending.
The government and labor groups have challenged the injunction, including the court’s jurisdiction. The government has asked the court to lift the injunction. While Wage Order No. 27 remained under litigation, Regional Tripartite Wages and Productivity Board (RTWPB) -NCR issued Wage Order No. 28, granting a P60 increase effective Sept. 26.
The legal questions remain unresolved. But the dispute raises a broader issue for wage-setting: How can an RTWPB clearly show how it considered the factors required by law in arriving at a wage increase?
A related issue is when a wage review should begin. The rules already provide for regular wage reviews. RTWPBs must keep socioeconomic conditions under review and may start the wage-setting process earlier when there are ‘urgent and reasonable grounds.’ The rules do not define those grounds.
That becomes important when events outside the country quickly raise the cost of living. The recent conflict in the Middle East, for example, has pushed up oil prices and Philippine fuel costs. An RTWPB must then decide whether the impact is enough to justify starting a wage review earlier than usual.
No rule can anticipate every crisis. But clearer guidance on what may constitute urgent and reasonable grounds could reduce disagreement over when an earlier review is warranted. Predictability does not mean automatic wage increases or a fixed formula. It can also mean greater clarity about when wages will be reviewed and when circumstances justify acting earlier.
How do we arrive at the amount? Once a wage review begins, another question follows: Why P50, P80 or any other amount?
A wage review brings together evidence. But evidence alone does not tell us how to assess it. Which indicators are most appropriate for each criterion required by law? How should they be read together? What happens when they point in different directions? What if the available data cannot give a confident answer?
These are not just technical questions. They affect the wages workers receive and the costs employers bear.
Recent Philippine research on the employment effects of minimum wage increases illustrates the difficulty. Gaps in the available data make some effects hard to estimate with confidence. This does not mean wage increases never affect employment, or that they necessarily lead to job losses. It means wage policy should not ask the evidence to tell us more than it can.
The same principle should guide wage-setting.
Who decides is only part of the question. The issue is especially relevant because wage-setting itself is being debated. Regional boards continue to review wages, while proposals in Congress would change the system. One approach is a legislated wage increase. Another would replace regional wage setting with a national minimum wage system.
The Wage Rationalization Act already requires RTWPBs to consider a wide range of social and economic factors. The law therefore provides the criteria. What deserves closer attention is how to assess them more systematically and show how the evidence shaped the final decision.
Serving as a labor representative to an RTWPB has brought this issue into sharper focus for me. I support higher wages for workers. But determining an increase also requires weighing evidence that may point in different directions or have important limitations.
Workers should be able to see how their needs were considered. Employers should understand the basis of decisions affecting their labor costs. Policymakers should know what the evidence supports and where its limits lie.
The debate will inevitably return to the amount. But if that is all we talk about, we will leave an important question unanswered:
How should the Philippines determine the minimum wage?
Dom Tuvera is a labor representative to the Regional Tripartite Wages and Productivity Board for Region I. The views expressed are his own.