ON Labor Day this year, President Ferdinand Marcos Jr. directed the Regional Tripartite Wages and Productive Boards (RTWPBs) to review the minimum wage amid complaints from organized labor groups about stagnant salary growth.
The president also instructed the National Wages and Productivity Commission (NWPC), an adjunct agency of the Department of Labor and Employment (DOLE) that supervises the wage boards, to review its rules to ensure that they maintain a regular and predictable schedule of wage review, issuance, and effectivity to reduce uncertainty and enhance fairness for all stakeholders.
A month before the president’s pronouncement, inflation was at 3.7 percent, up from 3.4 percent in February, fueled by rising prices of basic commodities and cost of services.
To date, the NWPC has affirmed the issuance of wage orders for workers in the private sector in 13 of the 16 regions in the country, namely the National Capital Region (NCR), the Cordillera Administrative Region (CAR), and Regions 1, 2, 3, 4A, 4B, 6, 7, 8, 9, 12 and 13.
The wage orders were initiated motu proprio. For the three remaining regions, RTWPB-10 (Northern Mindanao) is in the final stage of its minimum wage determination process after completing public hearings, while RTWPB-11 (Davao) is scheduled to start its review in January 2025.
RTWPB-5 continuously assesses the economic situation in the Bicol Region, which was hit hard by typhoons.
In affirming the wage orders, the NWPC said it had complied with the criteria for determining wage increases under Republic Act 6727, which included the needs of workers and their families, the capacity of employers/industry to pay, and the requirements of economic and social development in the region.
On June 27, RTWPB-NCR issued Wage Order NCR-25, granting a P35 increase to some 4 million private sector workers in Metro Manila, the first to be granted following the president’s Labor Day speech.
It raised the minimum wage in Metro Manila to P645 from P610, the highest in the country.
Several other wage boards followed suit. The latest was the board in the Caraga Region, which granted a P50 daily wage hike for private sector workers to be given in two tranches.
It raised the minimum wage in Caraga from P385 to P415 across all sectors and from P415 to P435 upon implementation of the second tranche on May 1, 2025.
The wage increases have left labor groups more frustrated than appeased.
They are demanding an overhaul of the regional wage system that favors a national wage scheme that can provide workers with a fair, living wage.
The labor groups, spearheaded by the Federation of Free Workers (FFW), also renewed their call for a P150 legislated wage hike, which has long been pending in the House of Representatives’ Labor Committee.
The Trade Union Congress of the Philippines (TUCP) also called on the wage boards to review their criteria for granting pay hikes.
“We strongly suggest that the government and employer groups represented in the National Capital Region Regional Tripartite Wages and Productivity Board, as well as those in the other regions, go back to the drawing board and come up with a more realistic wage increase taking into account all the criteria provided for under the law. Otherwise, what purpose do they serve?” TUCP said.
It pointed out that the increases approved by the regional wage boards did not make a dent in improving the condition of minimum wage earners.
TUCP said the amount granted could not even buy a kilo of quality rice, which costs anywhere from P50 to P60.
The Senate passed at the plenary level early this year a P100 legislated hike, but the counterpart bill for a P150 hike has been gathering dust at the House.
“Raising the minimum wage through the P150 recovery bill is not only a matter of economic relief but a pivotal step toward achieving equitable development across the country,” said FFW President Sonny Matula. “The fight against poverty, grounded in social justice, must begin by ensuring that workers have substantial take-home pay and their families can live with dignity.”
For the labor sector, a P150 wage hike represents only 24 percent of the existing P610 minimum wage in the NCR, lower than the second-highest pay rise of 39.1 percent nationwide in 1989 or the highest 100 percent in 1951.
“This modest adjustment reflects a balance between addressing economic considerations and improving the standard of living for Filipino workers,” Matula said.
The legislated wage increase is strongly opposed by the Philippine Chamber of Commerce and Industry (PCCI), the Employers Confederation of the Philippines (ECOP), and six other business groups, who consider it “horrible” or “bad timing” for capitalists.
The ECOP maintained that a legislated wage increase was not only inflationary but would also not benefit the majority of the workforce since those in the informal sector do not have a fixed wage and are not covered by it.
“The wage increase is only for formal sector workers, which is only 16 percent of the [estimated] 50 million workers. The remaining 84 percent are informal workers like the fisherfolk, tricycle drivers, vendors and jeepney drivers, [among others], who have no employers and regular salaries,” ECOP said.
ECOP’s position is shared by the Chamber of Commerce of the Philippines (CCP), the country’s oldest business group. The CCP maintains that a legislated, across-the-board pay increase is “unfair” because it would be an added burden to the business sector.
The chamber also holds that the wage hike issue is better left to the regional wage boards, which are more aware of the situation on the ground.
Labor Secretary Bienvenido Laguesma said that he was already in the Labor Department in 1989, and as far as he could remember, the legislated wage hike law had little or minimal effect in taming inflation or spurring business.
But Laguesma pointed out that with the changing times, many factors have to be considered in setting a wage increase.
“In general, as far as I can remember, there were effects [in business] but did not really merit serious concern. In DOLE’s monitoring, it did not really have a serious effect on inflation,” he said in Filipino.
“We are globalized at present. Competition is stiff with our Asean (Association of Southeast Asian Nations) neighbors, and this is one of the pr imary considerations that we should look into,” he said.
Laguesma said that as far as the DOLE was concerned, the regional wage boards have been doing a commendable job in determining the wage increase in their areas and in balancing the concerns of both labor and business.
He said the DOLE was ready to implement a legislated increase if one was enacted into law.
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