Philippines to support MSMEs as DOLE defends region-based wage hikes

The Philippines' Department of Labor and Employment (DOLE) has reaffirmed that minimum wage increases will continue to be determined through the country's regional wage-setting system, while rolling out support measures to help micro, small and medium enterprises (MSMEs) cope with higher labour costs.

Labour Secretary Francis N. Tolentino said wage adjustments are guided by the Wage Rationalisation Act and are based on prevailing socio-economic conditions, workers' needs and employers' capacity to pay.

Speaking at a forum on Wednesday, Tolentino said the Regional Tripartite Wages and Productivity Boards (RTWPBs) regularly review minimum wages in their respective regions to ensure a balanced approach that protects workers while sustaining businesses.

As part of the latest wage order, the P85 daily minimum wage increase for workers in the National Capital Region (NCR) will proceed as scheduled. The first tranche will take effect on July 25, 2026, followed by a second tranche on January 20, 2027.

Tolentino said the regional wage-setting mechanism helps moderate inflation by preventing simultaneous nationwide labour cost increases, as wage adjustments are implemented at different times across regions based on local economic conditions.

He added that wage increases in other regions would also be calibrated according to their respective economic circumstances and labour market conditions.

Addressing concerns over wage distortion, where salary gaps between minimum wage earners and higher-paid employees narrow after wage hikes, Tolentino said such issues should be resolved through collective bargaining between employers and workers.

To cushion the impact on businesses, particularly smaller enterprises, DOLE will expand its Adjustment Measures Program (AMP) to provide targeted assistance to MSMEs affected by the Metro Manila wage increase.

Under the programme, eligible businesses may receive funding for productivity-enhancing equipment and operational improvements, allowing them to allocate more resources towards complying with the new wage order.

"For example, if a restaurant needs a new point-of-sale system, DOLE may help fund that so the business can use its available capital for wage adjustments," Tolentino said.

The AMP also provides capacity-building, business enhancement, product development, labour compliance support and industrial peace initiatives to help businesses strengthen resilience while protecting jobs.

In addition, MSMEs facing financial difficulties may apply for exemption from the mandated wage increase within the prescribed 75-day filing period, subject to eligibility requirements.

Tolentino said DOLE would continue complementing wage policies with programmes focused on productivity improvement, employment generation, skills development and enterprise support to strengthen both workers' welfare and business resilience.