W. Visayas wage hike: Iloilo biz group pushes for merit-based pay

ILOILO CITY — The Philippine Chamber of Commerce and Industry-Iloilo Chapter Inc. (PCCI-Iloilo) said the new PHP 40 to PHP 45 daily minimum wage increase in Western Visayas would further burden businesses already facing economic challenges.

The business group urged the government to consider performance-based pay increases instead.

During the board’s consultations and public hearings, PCCI-Iloilo said it submitted a position paper to the Regional Tripartite Wages and Productivity Board-6 (RTWPB-6) recommending a smaller increase of PHP 30.

On Oct. 23, however, the RTWPB-6 confirmed the approval of a new wage order granting daily minimum wage increases ranging from PHP 40 to PHP 45.

PCCI-Iloilo President Jerduen “Noi” Dongor said the increase could have a ripple effect on business operations, particularly among micro, small, and medium enterprises (MSMEs), which are already grappling with economic pressures linked to the Middle East crisis.

“The move to increase the minimum wage from PHP 40 to PHP 45, we see it to have a negative impact on the businesses, especially the MSMEs,” he said in an interview on Monday.

Dongor acknowledged that businesses would have to comply with the government’s wage policy. He said he hoped the government would provide incentives to employers and give them more discretion to grant additional pay based on employee performance.

“We hope that any additional incentives we provide to our employees will be performance-based and not mandated by the government,” he said.

“There are so many challenges now, and the impact of the PHP 40 to PHP 45 minimum wage increase is quite heavy. But the business sector remains committed to contributing what it can,” he added.

Dongor said an across-the-board wage increase also pressures employers to raise the salaries of longer-serving employees to keep reasonable pay gaps between minimum wage earners and tenured workers.

“When the minimum wage increases, we also have to increase the salaries of our other employees because the gap between minimum wage earners and tenured workers becomes smaller. Essentially, everything will increase,” he said.

Dongor said a performance-based approach would let employers grant increases based on work performance rather than apply the same adjustment across the board.

“We hope the decision on how much increase to give our employees will be left to us,” Dongor said.

New wage rates

Under Wage Order No. RBVI-30, the daily minimum wage for agricultural workers will rise by PHP 45, from PHP 520 to PHP 565.

Non-agricultural workers in establishments with more than 10 workers will receive a PHP 40 daily increase, raising their minimum wage from PHP 550 to PHP 590.

Non-agricultural workers in establishments with 10 or fewer employees will also receive a PHP 40 daily increase, from PHP 525 to PHP 565.

The new order follows Wage Order No. RBVI-29, which took effect on Nov. 19, 2025, and granted daily increases of PHP 37 to PHP 40 to private sector minimum wage earners in the region.

Cost pressures

Dongor said a PHP 40 daily wage increase for a business with 100 employees would mean an additional PHP 4,000 in daily payroll expenses, or about PHP 120,000 a month, assuming 30 days of wage payments.

He said the business sector was not opposed to improving workers’ livelihoods. He added that employers wanted to provide better pay but were constrained by rising operating costs.

He cited rising fuel prices linked to the Middle East crisis, which have also pushed up the costs of logistics, electricity, and raw materials.

Dongor warned that businesses could respond to higher labor costs in several ways: reducing their workforce to stay afloat, raising the prices of their products and services, or shutting down if they could no longer sustain operations.

Asked whether the current economic situation was worse than the COVID-19 pandemic, Dongor declined to make a direct comparison, saying the two crises involved different circumstances.

“Both are difficult situations. Both call for dialogue among stakeholders, businesses and employees,” he said.

Dongor rejected the notion that businesses were simply unwilling to grant substantial wage increases. He said employers also wanted workers to earn more but were concerned about their capacity to sustain employment.

“If we grant these increases but the businesses are the ones that suffer, we will have problems because we may no longer be able to provide employment,” he said.

Dongor urged the government to extend greater support to MSMEs, which he said play a significant role in the economy.

His proposals included loans with minimal or no collateral requirements, lower interest rates, better access to markets, and training programs to help small businesses expand their customer base.