PERSISTENT high inflation that can still worsen in the months ahead strengthens the case for wage adjustments in the Philippines, an analyst said, as workers continue to face stagnant pay and rising living costs despite a modest easing in May.
“Workers enduring stagnant real wages for years have seen their earnings worsen in recent months of elevated inflation, even tripling in just a couple of months,” Jose Enrique “Sonny” A. Africa, executive director of IBON Foundation, said in a Viber message.
“Moderating inflation should not obscure how the cumulative increase in prices has relentlessly reduced the purchasing power of low wages,” he said, adding that workers remain under pressure despite slower price increases.
Mr. Africa said wage growth has long lagged rising living costs, noting that the average minimum wage today is about 21% lower in real terms than decades ago when wage-setting was regionalized.
“This long-term erosion underscores how inflation has disproportionately burdened lower-income households,” he said, adding that inflation concentrated in basic goods such as food and fuel make wage hikes “more compelling.”
“For many families, stagnant wages combined with surging costs have meant deteriorating living standards and heightened vulnerability,” he said.
Mr. Africa also pointed to a wider gap in inflation pressures, noting that lower-income households face significantly higher cost increases amid already weak and irregular incomes.
Wage determination in the country is governed by Republic Act No. 6727, which mandates regional wage boards to periodically review and adjust minimum wages based on socio-economic factors such as the cost of living, inflation, and poverty threshold.
The National Wages and Productivity Commission, under the Department of Labor and Employment, began the latest wage cycle in May, starting in Metro Manila, with succeeding rounds set to roll out across regions through 2027.
“Wage hikes mean burden-sharing of adjusting to the current crisis between workers and employers, which can be combined with other measures to protect household purchasing power,” Mr. Africa said.
Inflation in the Philippines eased in May but remained elevated, with headline inflation at 6.8%, down from 7.2% in April, according to the Philippine Statistics Authority.
However, core inflation rose to 4.1% from 3.9%, indicating continued underlying price pressures even as headline inflation slowed.
Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said inflation remains driven by higher fuel and food prices linked to external geopolitical tensions.
“Still and all, the inflation rate remains high, exceeding the original target. What happens in the forthcoming months is difficult to predict in light of the continuing great uncertainty. As long as the uncertainty remains, inflation will likely remain elevated,” Mr. Sta. Ana said.
He also pointed to persistent structural issues in domestic food supply and agriculture, which keep food inflation elevated regardless of global developments. — Mark Joseph M. Sanchez
