Groups slam report linking wage hikes to economic slowdown

By Juliane Judilla

Multisectoral group Bagong Alyansang Makabayan (Bayan)-Panay and workers alliance United Labor-Panay denounced a recent Institute of Contemporary Economics study that links minimum wage hikes to a decline in regional economic growth.

The ICE report said wage earners in Western Visayas have “done well relative to similarly-situated employees in most of the rest of the country,” noting that wage growth in the region outpaced the National Capital Region’s compound annual growth rates of 3.7% to 4.0%.

The study cautioned that rapid increases strain small and medium enterprises facing tight margins and rising input prices and warned that “continued price pressures from increasing cost of business expenses could further impact economic growth and affect employment levels.”

The findings drew swift pushback from Bayan-Panay and United Labor-Panay, which backed the successful implementation of Wage Orders RPVI-25 and RPVI-28.

“Workers are not the cause of the economic crisis,” Bayan said in a statement.

The groups cited Philippine Statistics Authority data showing Western Visayas growth slowed from 6.8% in 2023 to 4.3% in 2024, with agriculture shrinking −6.2% in 2023 and −7.3% in 2024, and argued this cannot be blamed on the PHP 40 increase in farmworkers’ wages, now at PHP 480 per day, or the PHP 513 per day wage for nonagricultural workers in larger firms.

They pointed instead to structural problems such as landlessness, trader control of farmgate prices, import liberalization flooding markets with cheap staples, and profit concentration among large corporations and elites.

“The real causes are the same old problems,” Bayan-Panay Secretary General Elmer Forro said.

“Landlords still dominate agriculture while farmers remain landless and in debt, traders dictate farmgate prices, import liberalization floods markets with cheap rice, sugar, and vegetables, and profit hoarding by corporations, local elites, and foreign monopolies ensures small producers are left with crumbs,” he added.

“They want us to believe that the problem is our demand for a decent life, not the system that bleeds both workers and farmers dry,” Forro said.

The groups stressed that even with recent wage hikes, incomes trail the cost of living, citing IBON Foundation’s estimate of a family living wage of PHP 1,200 to PHP 1,300 per day for a family of five.

They added that from 2012 to 2022 labor productivity rose nearly 29% while real wages increased about 21%, arguing the gains continue to accrue largely to capital.

“To call the latest wage hikes ‘aggressive’ or ‘excessive’ is an insult when workers continue to subsidize the profits of the elite through cheap labor,” Bayan said.

“How can PHP 480 to PHP 513 a day be called ‘too much,’ when big landlords and corporations rake in millions and government officials waste billions in pork barrel funds,” the group added.

They noted that despite Western Visayas contributing PHP 641.76 billion to the national economy in 2024, ranking eighth among regions, nearly one in five families remain poor.

“Who benefits from this wealth if not the workers and peasants who created it,” Bayan asked.

In an interview, the United Labor Alliance underscored the Constitution’s mandate for a living wage and said government should guarantee pay that reflects actual costs instead of limiting increases to please investors.

“There is really a need to increase the wages of workers so that it reaches what is set by our highest law, the Constitution, which states that workers should receive a living wage, which the government itself has set at P1,200 per day for a family of five,” the alliance said.

The alliance urged an end to import liberalization policies that undermine local producers, calling for subsidies, affordable credit, tax relief, and protection for micro, small, and medium enterprises.

It also pressed for genuine land reform and national industrialization to build a self-reliant economy that serves the majority.