Philippine firms urged to boost worker retention amid inflation spike
PHILIPPINE business leaders urged companies to adopt workforce retention and strategic investments to stabilize the domestic market as surging inflation threatens consumer spending, job stability and business growth.
“The Philippines faces considerable headwinds on the global front,” Employers Confederation of the Philippines (ECOP) President Sergio Ortiz-Luis, Jr. said during the group’s national conference in Manila on Wednesday.
He cited volatile oil prices, slowing global growth and the Iran war disrupting supply chains and weighing on economic activity.
“We could be at the moment of extraordinary challenge, not merely for our businesses but for the nation as a whole,” he added.
He made the call as inflation accelerated to 7.2% in April, sharply raising living costs and pressuring employers to retain workers while managing higher operating expenses.
Philippine Stock Exchange Chairman Jose T. Pardo, who heads the ECOP Council of Business Leaders, said the inflation spike is hitting minimum wage earners hardest and weakening household purchasing power.
“On a spreadsheet, that looks manageable,” he told the conference. “On the ground, in the wet markets, in the jeepney lines, in the small [eatery] along the sidewalk, it means that the minimum wage worker is just working just as hard and eating a lot less.”
Mr. Pardo urged companies to move beyond a “wait-and-see posture” by implementing faster compensation reviews, flexible work arrangements and other support measures to ease commuting and living costs.
He said these measures should be viewed as business necessities rather than corporate charity, especially as manufacturers, transport operators, retailers and food service companies face rising input costs and weaker consumer demand.
“These are not charity. These are smart retention strategies in an environment where replacing a good employee costs far more than retaining one,” he added.
Mr. Pardo said the economic climate demands a departure from traditional management playbooks. He noted that while fiscal deficits remain under control and the Bangko Sentral ng Pilipinas has managed the “great swell,” the growth numbers do not fully capture the struggle of the individual worker.
The 7.2% inflation rate recorded in April 2026 is the highest since March 2023, a figure that Mr. Pardo described as “nearly double where we were just a month prior.”
This volatility, he argued, requires employers to prioritize employee welfare as a core business discipline rather than an act of generosity.
“The sustainability of our business depends on the well-being of the people inside them. That is not a slogan. In a 7.2% inflation environment, it is a survival strategy,” Mr. Pardo said.
He said fuel costs remain a primary driver for logistics, which in turn affects raw materials, distribution and general operations across all major sectors.
Enterprises in manufacturing, food service, transport and retail are being squeezed from both ends, facing high input costs while their customers’ purchasing power is quietly shrinking, he added.
The Department of Trade and Industry echoed the need for private sector resilience by focusing on overseas expansion to offset domestic strain.
Trade Secretary Maria Cristina A. Roque said the government is finalizing four game-changing free trade agreements this year, including those with the European Union, Canada, Chile and India, to provide preferential tariffs for Philippine products.
In a resolution, ECOP cited the need to respond collectively to geopolitical tensions, inflationary pressures, technological disruption and climate-related challenges affecting jobs and competitiveness.
“ECOP, being the single voice of employers recognized by the government, should continue to affirm its commitment to advocate and support policies that strengthen business enterprises, improve the investment climate and engender economic growth and competitiveness amid the global and domestic crises and disruptions,” according to the resolution.
ECOP said employers recognize both risks and opportunities arising from a young workforce, natural resources and regional integration, provided that reforms and coordinated action are pursued.
It added that these commitments are meant to guide continued engagement among stakeholders to strengthen resilience, sustainability and long-term economic stability. — Erika Mae P. Sinaking
