Marcos calls for review of wage rates

Philippine President Ferdinand R. Marcos, Jr. on Wednesday ordered regional wage boards to review minimum wage rates, as Filipino workers face stagnant salary growth despite rising living costs.

The regional boards should consider economic challenges such as inflation in conducting wage reviews, Mr. Marcos said in a speech during a Labor Day ceremony in Malacañang.

“As president, I call on the Regional Tripartite Wages and Productivity Board to initiate a timely review of the minimum wage rates in their respective regions, with due consideration to the impact of inflation among others, within 60 days prior to the anniversary of their latest wage order,” he said.

Mr. Marcos called on the National Wages and Productivity Commission, which supervises the wage boards, to ensure “a regular and predictable” schedule of wage reviews in order to “reduce uncertainty and enhance fairness for all stakeholders.”

The Philippines adjusts daily minimum wages through its wage boards. The wage board in the National Capital Region (NCR) approved a P40 increase on June 29, 2023, bringing the minimum wage to P610 from P570 for workers in the non-agricultural sector.

However, the slow and meager wage hikes amid rising cost of living have prompted lawmakers to pursue wage hikes through legislation.

Senators have approved a bill on second reading increasing the daily minimum wage in the private sector by P100.

At the House of Representatives, separate bills that seek to increase wages of private sector workers by P150 to P750 have been filed.

Philippine inflation quickened for a second straight month in March — to 3.7% from 3.4% in February — as rice prices continued to surge. In March, inflation-adjusted wages were 16.7%-24.2% or P73.25-P114.20 lower than the current daily minimum wages across the regions in the country.

The Philippine Chamber of Commerce and Industry (PCCI) described Mr. Marcos’ call as “prudent,” saying it was a balanced approach to the demands of the labor sector for a wage increase and proposals in Congress for a legislated wage hike.

“I think it’s a very prudent suggestion to give the tripartite bodies 60 days to discuss this issue,” PCCI Chairman George T. Barcelon said in a phone call.

Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. said Mr. Marcos’ latest call could mean that current legislated wage hike proposals in Congress do not have his support.

“I think it’s basically driving the message that the ones who should touch the salary should be the wage board,” he said in a phone call.

“It’s an indirect way of saying that the Congress should not meddle,” he said in mixed English and Filipino.

Filomeno S. Sta. Ana III, coordinator at Action for Economic Reforms, said regional wage boards remain the appropriate body to decide on wage hike proposals since they are supposedly “more responsive to local conditions.”

“It moves away from a rigid one size-fits-all approach,” he said in a Facebook Messenger chat.

“In terms of increasing the minimum wage, the yardstick is to ensure that nominal wages keep up with high inflation and that higher worker productivity is rewarded,” Mr. Sta. Ana said.

“As to the tradeoff, whether higher minimum wage triggers worse inflation or unemployment is an empirical question,” he added. “At the same time, there are conditions where such fear or threat of escalating inflation or unemployment does not emerge.”

IBON Foundation said that a P690 across-the-board wage hike is needed to raise the average P440 minimum wage nationwide to the current P1,207 average family living wage nationwide.

“The wage hike is equivalent to 49% of profits across all establishment sizes and would divide profits more or less equally between employers and workers,” IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said in a Facebook Messenger chat.

“Broken down, the wage hike is equivalent to 54% of profits in micro, 53% in small, and 46% in medium and large firms,” he said.

Raising wages is easiest for medium and large corporations, while the government can help smaller firms with wage subsidies or other support, he noted.

Many small enterprises, especially those under the Barangay Micro Business Enterprises Law, are exempt from any proposed wage increase, Federation of Free Workers President Jose Sonny G. Matula said, as his group backs proposals for a legislated wage hike.

For businesses genuinely unable to meet the new wage standards, provisions under the Wage Rationalization Act allow for exemptions, he added in a Viber message.

Also on Wednesday, Mr. Marcos asked Congress to pass measures that would support his administration’s job creation agenda such as the proposed Enterprise-based Education and Training Program Act, which seeks to rationalize the training programs for middle-level workers, and the Revised Apprenticeship Program Act.

He also mentioned a bill that seeks to further lower the income tax imposed on domestic and foreign firms.

Meanwhile, Mr. Marcos unveiled the master plan for a proposed Workers’ Rehabilitation Center Complex that will be built in Rizal province.

The facility seeks to provide comprehensive management and treatment for injured workers, with a focus on biopsychosocial approach to recovery to enable their reintegration into the workforce. — By Kyle Aristophere T. Atienza, Reporter