NEDA chief warns PHP100 wage hike may hurt economy

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan warned against a proposed PHP100 wage hike on Thursday.

Balisacan stated that such an increase would negatively impact inflation, economic growth, and could lead to higher unemployment rates.

The Senate approved Senate Bill No. 2534 seeking to increase the daily minimum wage by P100 for private sector workers on Monday, while the House of Representatives is planning to tackle pending bills next week that seek a PHP150 minimum wage increase.

Depending on its implementation, a PHP100 pay hike could add about 100,000 to 340,000 additional unemployed Filipinos and raise inflation by 0.2-0.8 percentage points.

Balisacan suggested that regional-level negotiations would better account for the varying labor market conditions across different areas of the country.

He emphasized the importance of maintaining the momentum in reducing inflation to a target range of 2 to 4 percent, and avoiding actions that could reverse these gains.