Philippine businesses can easily grant the proposed ₱200 wage increase for all workers in the country, according to a research by the Ibon Foundation. The institution computed that this amount is only a small portion of company profits. It is only 11.1% of the profits of large companies, 9.1% for medium-sized ones, 12.9% for small businesses, and 15% for micro enterprises. The government can support small businesses that may struggle to fund the wage increase so that it does not become a burden for them, according to Ibon.

The institution released the data amid foreign and large capitalists’ strong refusal to grant even a single centavo to increase workers’ wages. These capitalists once again warned that small businesses would “struggle,” prices would rise further, and many jobs would be lost after the 19th Congress passed the first law to increase the minimum wage in nearly four decades.

The House of Representatives approved House Bill 11376, which proposes a ₱200 increase in the daily wage of private sector workers, with 172 legislators voting in favor, none opposing, and one abstaining. The Senate had already passed its version of the law last year, proposing a ₱100 increase. Despite being far from the proposed ₱1,200 family living wage (FLW), workers consider these proposals as a initial steps.

Based on Ibon’s analysis using data from the Philippine Statistics Authority’s 2022 Annual Survey of Philippine Business and Industry, employee compensation accounts for only about 11% of the total expenses of formal businesses. In 2022, the profits of businesses in the Philippines reached ₱3.1 trillion, with more than half coming from large companies. The additional ₱359.8 billion needed for the wage increase is equivalent to only 11.8% of the total profits across all business sizes.

According to Ibon, this wage increase will only recover the lost value of minimum wage earners’ pay over the past decade, allowing them to gain almost a 10% increase in the real value of wages at the national level. Although there is an increase, the ₱559 wage remains insufficient compared to the estimated FLW of ₱1,224 by the end of 2024. Thus, the ₱200 wage increase must be followed by further increases to raise the standard of living for workers.

Ibon emphasized that the wage increase will positively affect the economy because workers are more likely to spend it in their local communities. Additional income on the hands of workers will not only provide immediate relief but also stimulate broader economic activity.