Exporters in Cebu have voiced strong opposition to proposals for a legislated nationwide wage increase, urging the government instead to suspend or reduce the value-added tax (VAT) on essential food items and fuel to alleviate the rising cost of living. The stance comes as 18 labor groups push for a P100 across-the-board daily wage hike for private-sector workers, citing escalating prices of fuel, food, and other basic commodities.
RTWPB 7 declares supervening events
The Regional Tripartite Wages and Productivity Board (RTWPB) 7 recently declared the existence of supervening events, enabling it to consider the wage hike petition before the usual one-year waiting period following the last wage order. Central Visayas has recorded the highest inflation rate among the country's 18 regions for 10 consecutive months, with inflation standing at 10.8 percent in May.
In a position paper dated Wednesday, June 17, 2026, the Confederation of Philippine Exporters (Cebu) Foundation Inc. (Philexport Cebu) argued that a mandated wage increase addresses symptoms rather than root causes of inflation, which it said is largely driven by rising food, fuel, transportation, electricity, and logistics costs. "A legislated wage increase is the wrong remedy for an inflation problem," the group stated, adding that the government should first reduce taxes that contribute to higher consumer prices before requiring businesses to absorb additional labor costs.
VAT reduction as alternative
Philexport Cebu proposed suspending or reducing VAT on food and fuel, which would directly lower household expenses, transportation costs, and logistics charges while benefiting a broader segment of the population, including informal workers, farmers, fishermen, and pensioners. The exporters' group warned that a legislated wage increase could force businesses to adopt hiring freezes, cut work hours, delay expansion plans, accelerate automation, or reduce their workforce, particularly among micro, small, and medium enterprises (MSMEs) with limited financial capacity.
For exporters, the impact could be more severe as they compete with manufacturers in countries such as Vietnam, Indonesia, Thailand, India, and Bangladesh, according to the group. "Foreign buyers do not automatically pay higher prices because Philippine labor costs have increased," Philexport Cebu noted, emphasizing that higher production costs could weaken the country's competitiveness in attracting investments and export orders.
Opposition to uniform wage hike
The group also opposed a uniform nationwide wage increase, arguing that economic conditions, productivity levels, and business environments vary significantly across regions. It said wage determination should remain under the RTWPBs, which were established to set region-specific wage rates based on local economic conditions. Instead of legislating wage increases, Philexport Cebu urged the government to prioritize measures that would lower the cost of doing business and improve workers' purchasing power, including reducing electricity costs, lowering logistics expenses, investing in agricultural productivity, supporting MSMEs, and preserving the regional wage-setting system.
Upcoming consultations
RTWPB 7 has scheduled a series of consultations on the wage petition, beginning in Cebu City on Thursday, June 25, followed by Bogo City on July 9, Bohol on July 15, and Balamban, Cebu, on July 23. Public hearings are scheduled on August 5 and August 25.
