By Erika Mae P. Sinaking, Reporter
THE DAILY minimum wage in Metro Manila will increase to P780 by January 2027 after the Regional Tripartite Wages and Productivity Board-National Capital Region approved an P85 increase to be implemented in two phases, Labor Secretary Francis N. Tolentino announced on Tuesday.
The wage order provides for a P60 increase effective July 19 and one other P25 effective in January next yr, raising the day by day minimum wage for nonagricultural employees from P695 to P780.
For agricultural employees and employees of retail, service and small manufacturing establishments covered by the lower wage tier, the minimum wage will rise from P658 to P743.
The National Capital Region (NCR) wage board didn’t immediately release a duplicate of the wage order.
Mr. Tolentino said about 1.1 million minimum wage earners in Metro Manila are expected to learn from the wage order, while about 1.9 million employees earning above the minimum wage could also receive pay adjustments due to wage distortions.
Metro Manila employees receive P658 to P695 a day following a P50 wage increase that took effect on July 18, 2025.
Angelita D. Señorin, a member of the NCR wage board representing the labor sector, told BusinessWorld that the board had officially signed and approved the brand new wage order on June 23.
“The choice of the board is subject for review by the National Wages and Productivity Commission (NWPC),” Ms. Señorin said in a text message. “Yesterday, I used to be informed that the choice of the board has been affirmed by the NWPC.”
This P85 total increase is historically significant, because it represents a bigger adjustment than the P50 hike implemented within the previous yr.
Minimum wage determination within the Philippines is governed by Republic Act No. 6727, where regional wage boards are mandated to periodically review and adjust minimum wages based on regional socioeconomic aspects akin to the price of living, inflation, and the poverty threshold.
Data from the Philippine Statistics Authority showed the inflation rate in NCR eased to five% in May from 5.5% in April. Nonetheless, it continues to be much faster than 1.7% in May last yr.
Meanwhile, the region’s unemployment rate was recorded at 5.2% in April, higher than the national average of 4.7%. This placed Metro Manila among the many six regions with unemployment figures exceeding the national baseline.
Ms. Señorin said that while any adjustment is welcome, the P85 increase stays inadequate since it continues to be far below the actual cost of living in Metro Manila and only serves as a brief measure amid continued increases in the costs of basic goods, electricity and transportation.
“Throughout the wage deliberations, my position is evident that a minimum of the bottom petition filed before the wage board, which is P200, needs to be met,” she said in mixed English and Filipino.
“For my part, no sector might be affected by the rise since it is minimal in the primary place, and micro and small enterprises have many remedies and subsidies offered by the federal government that they’ll avail themselves of,” she added.
Benjamin B. Velasco, an assistant professor on the University of the Philippines Diliman School of Labor and Industrial Relations, said the wage board appeared to have struck a balance by granting a considerable increase while implementing it in two tranches, although labor groups may criticize the staggered approach as an alternative of a one-time adjustment.
“The impact might be felt within the formal sector which is roofed by employee-employer relations,” he told BusinessWorld in a Facebook chat. “But as a result of the lighthouse effect, eventually even informal employees will profit as MSMEs (micro, small and medium enterprises) adjust.”
“Even in the event that they wish to, businesses cannot at all times pass on wage hikes as price increases since they’re subject to market competition,” he said.
George T. Barcelon, chairman emeritus of the Philippine Chamber of Commerce and Industry, said the wage increase comes at a time when businesses proceed to face challenges from a weaker peso, higher rates of interest, and chronic inflation risks.
He said the P85 adjustment, comparable to roughly a 13% to 14% increase within the minimum wage, could possibly be difficult for some corporations, particularly micro, small and medium enterprises already operating on thin margins.
“The salary structure of some corporations could have to be reviewed because this increase may already border lots of company structure” where existing pay scales might overlap, he told BusinessWorld by phone.
Mr. Barcelon said corporations haven’t any alternative but to pass on the price of the wage hike, which can stoke inflation.
He said that while price increases is not going to be immediate, businesses will eventually feel the “pinch” of upper labor costs, warning that such a significant increase may hurt the economy.