P200 Daily Minimum Wage Increase Act of 2026

Office of the se - t'17 TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) 26 FEB 12 P2:23 SENATE RECEIVED BY: S. No._ 1856 Introduced by Senator Loren Legarda AN ACT PROVIDING FOR A TWO HUNDRED PESOS (P200.00) DAILY MINIMUM WAGE INCREASE FOR EMPLOYEES AND WORKERS IN THE PRIVATE SECTOR EXPLANATORY NOTE

Section 3, Article XIII of the 1987 Philippine Constitution declares that the

State shall guarantee the rights of all workers to security of tenure, humane conditions of work, and a living wage'. However, almost four decades since the ratification of the Constitution, the promise of a genuine "living wage" has yet to be fully realized. Empirical work using Philippine data shows that labor productivity has trended upward since the early 2000s while real wages have been broadly flat, indicating that workers have not received a just share of the fruits of production. There has been real wage stagnation from 2001 to 2016 despite output gains, a pattern echoed by labor research institutions and local scholars.? The Philippine Statistics Authority (PSA) sets the poverty threshold for a household of five at P13,873 per month,' or approximately P462.43 per day. This figure represents the minimum income required for a family to meet basic food and non-food needs. By comparison, current minimum wage rates across the country range from P411.00 to P695.00 for non-agricultural workers, and P366.00 to P658.00 for agricultural workers. Of the 17 regions, only 9 regions (52.94%) exceed the 1 Section 3, Paragraph 2, Article XIII, 1987 Constitution. 2 World Bank. (2018). Growth and Productivity in the Philippines: Winning the Future (Report No. 130056-PH). Retrieved from https://documents.worldbank.org/en/publication/documents-reports/documentdetail/5868715375417 Z5427/growth-and-productivity-in-the-philippines-winning-the-future * Gonzales, A. (2024). NEDA: Gov't to continue to address root causes of poverty. Philippine News Agency, Retrieved from https://www.pna.gov.ph/index.php/articles/1231334

poverty threshold for non-agricultural wages, while 10 regions (58.82%) surpass it for agricultural wages.* The International Labour Organization (ILO) defines living wage as "the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work". Thus, a living wage, as envisioned by the Constitution, must encompass more than food and shelter. It must allow workers and their families access to education, healthcare, housing, and participation in social life. To conflate the poverty threshold with a living wage risks reducing constitutional rights to mere survival. Yet, across much of the country, minimum wages fall significantly short of meeting the standard of a living wage envisioned by the Constitution. A study conducted by the IBON Foundation reveals a stark disparity between the daily nominal minimum wage and the family living wage as of December 2025.6 The shortfall ranges from 44.44% in the National Capital Region (NCR) to as high as 79.85% in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), with the national average wage gap standing at 58.28%. Historically, the last nationwide, legislated adjustment to the minimum wage was made thirty-six years ago under Republic Act No. 6727, the Wage Rationalization Act of 1989, which granted a uniform P25 increase and then devolved regular wage-setting to the regional boards. Nearly four decades have passed without a nationwide legislated wage hike, leaving millions of Filipino workers unable to recover from the erosion of their purchasing power due to inflation. Filipino workers have long been denied a just share in the fruits of their labor. This bill seeks to mandate a P200 daily minimum wage increase? to restore the lost value of workers' wages. A wage increase does not only benefit formal workers and their families. It reverberates across the economy by bolstering the informal sector, which thrives on the spending of wage earners. Any significant rise in the minimum wage provides meaningful relief to households by expanding their capacity to purchase basic goods * IBON Foundation (2026). Minimum Wage and Family Living Wage Per Region (Dec 2025). Retrieved from https://www.ibon.org/flw-regl-2512/ › International Labout Organization. What is a living wage? ILO. Retrieved from https://www.ilo.org/what-living-wage • IBON Foundation, supra note 4. ' The recommendation for a P200.00 legislated wage increase aligns with the proposal of the Trade Union Congress of the Philippines (TUCP) as embodied in House Bill No. 88.

and services, thereby stimulating domestic demand, fueling economic activity, and fostering more inclusive growth.® In sum, this measure recognizes that workers are essential to economic development, and it affirms their right to a living wage by ensuring that their wages keep pace with both productivity gains and the rising cost of living. In view of the foregoing, the immediate passage of this measure is earnestly sought. LOREN LEGARDA University of the Philippines SOLAIR. (n.d.). Impact of wage hikes on employment and inflation. Retrieved from https://solair.upd.edu.ph/impact-of-wage-hikes-on-employment-and-inflation/

eine of the ce tinep TWENTIETH CONGRESS OF THE FEB 12 REPUBLIC OF THE PHILIPPINES First Regular Session ) SENATE 1856 S. No._ Introduced by Senator Loren Legarda AN ACT PROVIDING FOR A TWO HUNDRED PESOS (P200.00) DAILY MINIMUM WAGE INCREASE FOR EMPLOYEES AND WORKERS IN THE PRIVATE SECTOR Be it enacted by the Senate and House of Representatives of the Philippines in the Congress assembled

Section 1. Short Title. - This Act shall be known as the "P200 Daily Minimum

2 Wage Increase Act of 2026"

Sec. 2. Declaration of Policy. - It is a policy of the State to alleviate the living

4 conditions of the ordinary Filipino through policies that provide for a decent and s humane standard of living and improved quality of life, particularly of the working 6 class by ensuring the right of labor to its just share in the fruits of production, to 7 guarantee the workers' right to a living wage, and to promote social justice through & the adoption of measures calculated to ensure the well-being and economic security 9 of all the members of the community.

Sec. 3. Wage Increase. - The daily rate of all 3 minimum wage workers in the

11 private sector, regardless of employment status, including those in contractual and 12 sub-contractual arrangements, whether agricultural or non-agricultural, shall be 13 increased by two hundred pesos (P200.00) upon the effectivity of this Act. Nothing 14 in this Act shall prevent the respective Regional Tripartite Wages and Productivity

1 Boards from granting additional increases to the workers and employees on the 2 basis of their determination pursuant to Republic Act No. 6727, otherwise known as 3 the "Wage Rationalization Act", as amended.

Sec. 4. Correction of Wage Distortion. - Where a wage distortion occurs as a

5 result of the increase in minimum wage under this Act, the employer and the union, 6 or the employer and the workers, in the absence of a union, shall negotiate to 7 correct the distortion in accordance with the provisions of Article 124 of Presidential 8 Decree No. 442 or the "Labor Code of the Philippines", as amended, and other • existing laws, rules and regulations.

Sec. 5. Non-Chargeability of Prior Increases. - No wage increase shall be

11 credited as compliance with the increase prescribed herein unless expressly provided 12 under valid collective bargaining agreements: Provided, That such wage increase 13 was granted in anticipation of the minimum wage increase under this Act: Provided, 14 further. That where such increase is less than the prescribed increase under this Act, 15 the employer shall pay the difference. Such increases shall not include anniversary 16 wage increases, merit wage increases and those resulting from the regularization or 17 promotion of employees.

Sec. 6. Incentives to Small Enterprises. - To assist in their compliance with

19 the wage increase, small enterprises may avail of incentives from the Department of 20 Labor and Employment (DOLE), subject to the implementing rules and regulations of 21 this Act.

Sec. 7. Non-Diminution of Other Benefits. - Nothing in this Act shall be

23 construed to reduce any existing allowance and benefit of any form under existing 24 laws, decrees, issuances, executive orders, and any contract or agreement between 25 workers and employers.

Sec 8. Existing Exemptions. - As provided by Republic Act No. 9178, also

27 known as the "Barangay Micro Business Enterprises (BMBE's) Act of 2002," the 28 BMBEs shall be exempt from the coverage of the Minimum Wage Law. Further, as 29 provided by Republic Act No. 6727, also known as the "Wage Rationalization Act," 3e and relevant rules of the National Wages and Productivity Commission, the following

1 establishments may apply for exemption from compliance with the minimum wage 2 increase as provided by this Act: (a) retail or service establishments regularly 3 employing not more than ten (10) workers; and (b) establishments adversely 4 affected by natural calamities or human-induced disasters.

Sec. 7. Inspection by the Department of Labor and Employment (DOLE). -

6 The DOLE shall conduct inspection of payroll and other financial records kept by the 7 company or business to determine whether the workers are paid the prescribed a minimum wage increase and other benefits granted by law. The said inspection may o take place at any time of the day or night, whenever work is being undertaken. In 10 unionized companies, the DOLE inspectors shall always be accompanied by the 11 president or any responsible officer of the recognized bargaining unit or of interested 12 union in the conduct of the inspection. In non-unionized companies, establishments 13 or businesses, the inspection should be carried out in the presence of a workers' 14 representative.

Sec. 8. Penalties. - Any person, corporation, trust, firm, partnership,

16 association or entity violating any provision of this Act shall be punished by a fine of 17 not less than Fifty thousand pesos (P50,000.00) but not more than One hundred 18 thousand pesos (P100,000.00) plus moral damages for each affected worker and the 19 costs of litigation including attorney's fees, or imprisonment of not less than two (2) 20 years nor more than four (4) years, or both at the discretion of the court: Provided, 21 That if the violation is committed by a corporation, trust or firm, association or any 22 other entity, the penalty of imprisonment shall be imposed upon the entity's 23 responsible officers including, but not limited to, the president, vice president, chief 24 executive officer, general manager, managing director or partner. The employer concerned shall be ordered to pay an amount equivalent to 26 double the unpaid benefits owing to the employees: Provided, That the payment of 27 indemnity shall not absolve the employer from the criminal liability imposable under 28 this Act: Provided, further. That any person convicted under this Act shall not be 29 entitled to the benefits provided for under the Probation Law.

In case a fine and/or indemnity is decreed by the National Labor Relations 2 Commission (NLRC) against person/s who violated the provisions of this Act and 3 cannot be immediately satisfied because of the refusal to pay, or in case of the 4 unavailability or inadequacy of funds, the bank deposits, financial interests and other 5 personal property not capable of manual delivery in the possession or control of third 6 parties of the owner in case of sole proprietorship or the assets of the corporation, 7 association or any other entity, shall be garnished. If such properties are not 8 enough, movable, and immovable properties may be levied to fully satisfy the • imposed fines and/or indemnities. Failure on the part of any corporation, trust or firm, partnership, association, 11 or any other entity to comply with the provisions of this Act shall be a ground for 12 non-renewal of business permits.

Sec. 9. Construction in Favor of Labor. - All doubts in the implementation and

14 interpretation of the provisions of this Act, including its implementing rules and 15 regulations, shall be resolved in favor of labor.

Sec. 10. Implementing Rules and Regulations. - The Secretary of Labor and

17 Employment shall promulgate the necessary rules and regulations for the effective 18 implementation of this Act.

Sec. 11. Separability Clause. - If any provision of this Act is held

20 unconstitutional, the remainder thereof not otherwise affected shall remain in full 21 force and effect.

Sec. 12. Repealing Clause. - All laws, decrees, executive orders, rules and

23 regulations and other issuances or parts thereof which are inconsistent with this Act 24 are hereby repealed, amended or modified accordingly.

Sec. 13. Effectivity Clause. - This Act shall take effect after fifteen (15) days

26 following the completion of its publication either in the Official Gazette or in a 27 newspaper of general circulation. Approved,