The Foundation for Economic Freedom (FEF) called on the government Monday to suspend the implementation of a newly approved ₱85 daily minimum wage hike in Metro Manila, warning that the move could trigger a wage-price spiral and push small businesses toward bankruptcy.

In a statement released July 20, the economic advocacy group urged the Department of Labor and Employment (DOLE) to hold Wage Order No. 27 in abeyance pending a comprehensive economic review.

The wage order, signed on July 9, grants minimum wage earners in the National Capital Region (NCR) a ₱85 daily pay increase.

The FEF expressed concern over the process leading to the order's approval, noting that it was issued despite strong dissent from employer representatives on the regional wage board.

"The issuance of Wage Order No. 27 despite the dissent of the employer representatives raises concerns about whether the tripartite wage-setting mechanism under Republic Act No. 6727 is functioning as intended," the group said.

"The exclusion or insufficient consideration of the employer perspective risks weakening the credibility of the process."

The group warned that the ₱85 hike outpaces productivity growth, forcing businesses to raise prices on basic goods and effectively wiping out workers' wage gains.

Small businesses operating on razor-thin margins—already battered by volatile fuel costs—face potential layoffs or complete closure.

Furthermore, surging labor costs could force hiring freezes or reduced work hours, locking unemployed and informal workers out of the formal job market.

The group added that unpredictable, non-consensus wage hikes weaken regulatory stability, ultimately discouraging long-term investment in key sectors like manufacturing and agribusiness.

Unlike oil prices, which fluctuate, wage increases are permanent once set, the FEF noted.

The group urged the government to pause the wage order and bring workers, employers, and officials back to the negotiating table to reach a balanced agreement based on economic realities.