House economists warn wage hike bills could hurt SMEs, spark inflation

Economists in the House of Representatives expressed concerns over bills proposing a legislated wage increase, arguing it could lead to higher prices and business closures for small and medium enterprises (SMEs).

Representative Stella Quimbo warned that companies would likely pass on increased costs to consumers, causing inflation, and suggested focusing on economic growth before considering wage hikes.

Rep. Joey Salceda highlighted the effectiveness of existing regional wage boards and stressed that raising wages could harm SMEs unable to afford higher labor costs, while also advocating for constitutional amendments to allow foreign investment.

House Deputy Speaker Jayjay Suarez echoed similar sentiments, emphasizing the need to address inflation and productivity before implementing a legislated wage increase.

Quimbo and Salceda argued that increasing minimum wages should be contingent on productivity improvements and noted the importance of attracting foreign investors to boost economic growth.