The Government Raised the Daily Minimum Pay by a 'Historic' P85. Is This Enough to Get By?

In what Labor Secretary and former Senator Francis Tolentino calls a "historic" move, the National Capital Region Tripartite Wages and Productivity Board has ordered an P85 increase to the daily minimum pay as it brings the daily wage to P780 for non-agriculture workers.

The basic daily pay will now be P743 for agriculture workers working in plantation and non-plantation setups, and it will also be the same amount for those working in service/retail establishments employing 15 workers or fewer and manufacturing establishments with fewer than 10 workers. The wage hike will be delivered in two tranches: P60 when the order takes effect on July 19 and an additional P25 on January 20 next year.

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"In accordance with the directive of our beloved President Marcos, we are increasing the wages of all workers here in Metro Manila. This will benefit 1.1 million daily wage earners. We are raising it by a historic P85 increase. This P85 per day is the highest in the private sector," Tolentino said in a statement.

Last year, the same wage board ordered a P50 hike that raised the wages to P695 from P645 for non-agriculture workers.

Lawmakers last year (those part of the previous 19th Congress) failed to come up with a reconciled version of a legislated wage hike bill as they adjourned without tackling the measure.

The country's labor groups have always echoed the plight of the everyday Filipino who has to deal with the paltry wages that are far from enough to cope with the spiraling prices of goods.

Things haven't seemed to change as organizations such as the Kilusang Mayo Uno and the Bukluran ng Manggagawang Pilipino have described the increase as a "slap in the face" or an "insult" to the working Filipino as they reiterated the need for a legislated wage increase.

"This P85 increase of the regional wage board will be used by employers’ groups to advocate that there should not be a legislated wage hike," labor lawyer and BMP president Luke Espiritu said commenting on the order.

"This is a clear excuse to frustrate the efforts of labor groups urging that salaries should be raised through legislation,” he added.

Employers' groups have bucked calls for an across-the-board legislated increase due to concerns over their effect on small businesses and their capacity to pay their employees.

The House of Representatives Committee on Labor and Employment on the same day of the order tackled bills proposing to raise the minimum wage by P200 and even up to P1,200.

Kilusang Mayo Uno echoed criticisms of the increase, saying the piecemeal nature of the hike's execution won't allow workers to deal with the skyrocketing costs of oil, electricity, and other expenses.

"This P85 increase will only raise the minimum wage in the NCR from P695 to P780, which is a far cry from the P1305 living wage," according to KMU Secretary General Mary Ann Castillo.

"This was not voluntarily granted by DOLE under Tolentino. It is the result of the powerful collective action of workers and the Filipino people. Let us continue and further intensify our struggle until our just demands are achieved."

The highly debated P85 hike in daily minimum pay will benefit the over 1.1 million minimum wage workers in Metro Manila, while 1.7 million full-time wage and salary workers earning above the minimum age will indirectly benefit from the hike as employers seek to correct wage distortion. When the minimum wage increases, those whose salaries are close to the new basic pay are to receive adjustments to correct an imbalance caused by the increase.

Regional wage boards determine minimum wages, but workers can also seek higher salaries through collective bargaining agreements and a bipartite mechanism between the employer and workers without a union.

Pundits have chided the regional wage-setting mechanisms for failing to aid workers in coping with inflation and the high prices of goods, even with a weak peso, as groups also cited the need for wage increases to satisfy a living wage for the typical Filipino family.

Last year, Senator Imee Marcos authored a bill that seeks to abolish wage boards to set up just one wage body that would set a national minimum wage across the regions, which would be adjusted annually based on inflation.

The NCR wage board had received several petitions proposing to more than double the region's existing minimum wage at P1,200 and P1,500 per day.

According to the IBON Foundation think tank, a typical family of five in the capital region needs a living wage of at least P1,289, which translates to a wage cap of 46.1 percent between current earnings and the cost of basic needs.

For context, the Philippine Statistics Authority earlier reported that inflation in NCR quickened to 5 percent in May, which is up 1.7 percent from a year earlier.

Metro Manila also has a jobless rate of 5.2 percent in April compared to the national average of 4.7 percent.

"The workers are tired of the endless balancing act between the greed of the few and the poverty of the many,” the Trade Union Congress of the Philippines said in Filipino.

“We are fed up with the flowery promises of politicians who also repeatedly fail the Filipino family."

The human rights watchdog Amnesty International defines a living wage as the minimum income needed for workers to meet their basic needs and to realize their human rights. A living wage factors in the cost of living, including essentials like food, housing, energy, water, sanitation, education, clothing and transportation. The human rights watchdog said that a living wage should be earned in a standard working week and would not need excessive and exploitative work hours to achieve.

Though the country's economic managers have warned against legislated wage hikes and even “dangerous repercussions” that may spur downward pressure on the Philippine gross domestic product and the measures likely fanning inflation.

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