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 another P25 effective in January next year, raising the daily minimum wage for nonagricultural workers from P695 to P780.
For agricultural workers 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 did not immediately release a copy of the wage order.
Mr. Tolentino said about 1.1 million minimum wage earners in Metro Manila are expected to benefit from the wage order, while about 1.9 million workers earning above the minimum wage could also receive pay adjustments because of wage distortions.
Metro Manila workers 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 new wage order on June 23.
“The decision of the board is subject for review by the National Wages and Productivity Commission (NWPC),” Ms. Señorin said in a text message. “Yesterday, I was informed that the decision of the board has been affirmed by the NWPC.”
This P85 total increase is historically significant, as it represents a larger adjustment than the P50 hike implemented in the previous year.
Minimum wage determination in 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 factors such as the cost of living, inflation, and the poverty threshold.
Data from the Philippine Statistics Authority showed the inflation rate in NCR eased to 5% in May from 5.5% in April. However, it is still much faster than 1.7% in May last year.
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 six regions with unemployment figures exceeding the national baseline.
Ms. Señorin said that while any adjustment is welcome, the P85 increase remains inadequate because it is still far below the actual cost of living in Metro Manila and only serves as a temporary measure amid continued increases in the prices of basic goods, electricity and transportation.
“Throughout the wage deliberations, my position is clear that at least the lowest petition filed before the wage board, which is P200, should be met,” she said in mixed English and Filipino.
“In my opinion, no sector will be affected by the increase because it is minimal in the first place, and micro and small enterprises have many remedies and subsidies offered by the government that they can avail themselves of,” she added.
Benjamin B. Velasco, an assistant professor at 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 substantial increase while implementing it in two tranches, although labor groups may criticize the staggered approach instead of a one-time adjustment.
“The impact will be felt in the formal sector which is covered by employee-employer relations,” he told BusinessWorld in a Facebook chat. “But due to the lighthouse effect, eventually even informal workers will benefit as MSMEs (micro, small and medium enterprises) adjust.”
“Even if they want to, businesses cannot always pass on wage hikes as price increases since they are 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 continue to face challenges from a weaker peso, higher interest rates, and persistent inflation risks.
He said the P85 adjustment, equivalent to roughly a 13% to 14% increase in the minimum wage, could be difficult for some companies, particularly micro, small and medium enterprises already operating on thin margins.
“The salary structure of some companies may have to be reviewed because this increase may already border a lot of company structure” where existing pay scales might overlap, he told BusinessWorld by phone.
Mr. Barcelon said companies have no choice but to pass on the cost of the wage hike, which may stoke inflation.
He said that while price increases will not be immediate, businesses will eventually feel the “pinch” of higher labor costs, warning that such a significant increase may hurt the economy.
