MANILA -- The daily minimum wage in Metro Manila will increase 25 pesos, or 4.9%, the highest hike in six years, amid rising inflation, the country's labor department said on Monday.
The daily wage for nonagricultural workers in the Philippine capital will be 537 pesos ($10.11), including a 10-peso cost of living allowance, up from the current 512 pesos. The increase will be effective 15 days from publication of the wage hike order.
The 4.9% increase is largely on par with the national inflation rate of 5% during the first nine months -- more than government targets -- as prices for basic commodities and services rose 6.7% in September to a new nine-year high.
The 25-peso increase is far lower than the 334 pesos requested by the Trade Union Congress of the Philippines, a labor group, in its amended petition last month.
Edgardo Lacson, chairman of the Employers Confederation of the Philippines, said only a 20-peso increase is warranted based on inflation and employers' capacity to pay. Lacson said employers will nevertheless comply with the order.
Maria Criselda Sy, executive director of the National Wages and Productivity Commission, said the labor agency had to "balance the competing interests of our stakeholders."
"The biggest consideration is if the economy can absorb the increase," Sy said.
Demands for higher wages have grown in recent months as rising commodity prices hurt workers' take-home pay, officials from the labor department and TUCP have said.
The latest increase comes as regulators approved a hike in transport fares last month. Rising inflation has become an economic and political headache for President Rodrigo Duterte, with the issue taking center stage in the run-up to the May midterm elections.
The Philippines already has one of the highest minimum wages in Southeast Asia.