metro manilas historic
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Why Metro Manila’s ‘historic’ P85 wage increase was put on hold

ByJustpaste.in

MANILA, Philippines – More than one million minimum wage earners in Metro Manila will have to wait for the full benefit of a “historic” P85 daily minimum pay increase after a Pasig court temporarily stopped its rollout at the request of two construction companies.

The first P60 tranche had already taken effect on July 25, raising the daily minimum wage for non-agricultural workers from P695 to P755. An additional P25 had been scheduled for January 20, 2027, which would have brought the rate to P780.

But on Thursday, July 30, the Pasig Regional Trial Court’s Branch 152 issued a temporary restraining order (TRO) against the regional wage board and the National Wages and Productivity Commission (NWPC) from implementing Wage Order No. 27 until August 13. A hearing on the companies’ request for a longer preliminary injunction was set for August 3.

According to a copy of the TRO obtained by Rappler, Readycon Trading and Construction Corporation and R-II Builders argued that the abrupt increase would disrupt projects priced before the wage order was issued. Readycon estimated an immediate additional payroll expense of around P409,257 attributable to the minimum wage increase alone.

TRO. A copy of the temporary restraining order obtained by Rappler. Document by Sonny Matula.

The companies warned that the resulting costs could reduce profitability, make them less competitive in bidding, force workforce cuts, and potentially suspend operations.

The court found that immediate implementation could cause “grave and irreparable injury,” not solely because of the direct payroll expense but also because companies might need to adjust salaries across their workforce to prevent wage compression.

It also acknowledged claims that the increase was “unprecedented” and said the normal administrative appeal process was inadequate to address the urgency of the employers’ concerns. Petitioners were required to post a P1-million bond.

Labor Secretary Francis Tolentino said the department was saddened by the decision but would respect the court’s ruling.

The ruling immediately drew criticism from organized labor.

The Federation of Free Workers (FFW) and the Nagkaisa Labor Coalition said the companies had bypassed the appeals process established under the Labor Code. According to FFW president and NAGKAISA chair Sonny Matula, parties challenging a wage order may appeal to the NWPC, while Article 126 of the Labor Code expressly bars courts and other entities from issuing injunctions against proceedings before the commission or regional wage boards.

“What is truly extraordinary is the judicial intervention itself,” read part of Matula’s statement.

On the other hand, business groups had previously warned that a large wage adjustment could squeeze small enterprises and businesses operating on thin margins.

The Foundation for Economic Freedom called for the increase to be suspended and reviewed because of its potential impact on micro, small, and medium enterprises and fears that it would fuel an “inflationary wage-price spiral.”

The Philippine Chamber of Commerce and Industry similarly warned that changes to minimum wage should account for the capacity of employers to “absorb significant increases in labor costs while preserving jobs, maintaining business, and sustaining investments.” – Rappler.com

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