Bulatlat - The Philippines's alternative weekly magazine

Workers in the National Capital Region (NCR) will get a P25 ($0.47) increase in their basic pay on July 11. Those outside NCR are also expected to get theirs in the immediate future. Is there reason for workers to be euphoric at this point?

The P25* increase in the basic pay of minimum wage earners in the National Capital Region (NCR) will take effect on July 11. The National Wages and Productivity Commission (NWPC) said that other regional wage boards are conducting public hearings on possible wage increases in their respective regions, the last of which is scheduled July 13 in Central Luzon.

Immediately after the announcement of a wage increase in the NCR last June 28, labor groups were quick to dismiss it as being too little, too late. Organized workers outside NCR are not expecting much, going by their past experience that wage increases granted by regional wage boards do not normally exceed that which is granted in the NCR.

Analyzing the current minimum wage rates and family living wage, minimum wage earners nationwide still cannot provide for the needs of their family.

In a 2001 NWPC study titled “Development of Methodology for Estimating the Living Wage,” living wage is defined as “the amount of family income needed to provide for the family’s food and non-food expenditures with sufficient allowance for savings/investments for social security so as to enable the family to live and maintain a decent standard of human existence beyond mere subsistence level, taking into account all of the family’s physiological, social and other needs.” The current family living wage assumes that a family has six members on the average and that two family members are earning.

By July 11, workers in the NCR will be entitled to a P350 ($6.68) minimum wage. This, however, only accounts for 47% of the family living wage amounting to P749 ($14.31). On a monthly basis, the minimum wage in the NCR does not fulfill the necessary family income of P19, 474 ($372.00). (See Table 1)

Workers in other regions are in the same boat, so to speak, as minimum wages only comprise 18% (Autonomous Region in Muslim Mindanao or ARMM) to 44% (Eastern Visayas) of the family living wage which ranges from P469 or $8.96 (Eastern Visayas) to P981 or $18.74 (ARMM).

What is common among workers nationwide whose current minimum wage ranges from P180 or $3.44 (ARMM) to P350 or $6.69 (NCR) is that even if two family members are working it is still not enough to provide decent living for their families.

As in the past, minimum wage earners in war-torn ARMM have the unfortunate distinction of having the lowest minimum wage and the highest family living wage. A family of six in the ARMM needs a monthly family income of P25, 506 ($487.22) but the monthly minimum wage only amounts to P5, 200 ($99.33). This means that five members need to earn the minimum wage to provide for the needs of the family.

The data clearly show that in order for a wage increase to be meaningful to workers, it has to be substantial enough to provide for a decent living. As things stand now, workers have every reason to demand for higher wages and to dismiss past wage increases as being inconsequential.

The campaign for a legislated P125 ($2.39) increase in the minimum wage of private sector workers nationwide started on August 25, 1999. At that particular year, the minimum wage ranged from P140 or $2.67 (ARMM) to P223.50 or $4.27 (NCR). From 1999 to 2006, the regional wage boards only provided cumulative wage increases ranging from P40 or $0.76 (ARMM) to P88 or $1.68 (Central Luzon). (See Table 2)

While the increases in the minimum wage of NCR-based workers amounts to P126.50 ($2.42) from 1999 to 2006, it must be stressed that P50 ($0.96) of the increase was in the daily emergency cost of living allowance (ECOLA), not in the basic pay. Workers are demanding a substantial increase in basic pay, not in allowances, so that they can have higher overtime and night differential pays, among others.

The glaring reality of low wages in the country makes non-sequitur the government’s and employers’ claim that the Philippines has one of the highest wages compared to other neighboring countries, hence the need to temper any demand for substantial wage hikes.

As of July 3, NWPC data shows that the minimum wage in the NCR ($6.28) is higher compared to the ones in Bangkok, Thailand ($4.57); Beijing, China ($2.87); Jakarta, Indonesia ($2.54); Cambodia ($1.39); and Vietnam ($1.26). However, the case is not true for Malaysia ($12.54), Taiwan ($16.28), South Korea ($25.84), Singapore ($46.32), Australia ($47.95), Japan ($49.61) and New Zealand ($49.91).

At this point, the government clearly tends to favor an environment that is conducive to more foreign investors. Wages are kept low, as one of the country’s selling points.

Even as statistics show that the country’s low wages are not enough to provide a decent standard of living for the Filipino family, the workers’ demand for a substantial wage increase is quickly rejected by the Macapagal-Arroyo administration. It simply has a different priority. Bulatlat

Table 1 Minimum Wage and Family Living Wage as of June 2006 (non-agriculture, in pesos)
	On a Daily Basis			On a Monthly Basis a/
	Minimum Wage	Family Living Wage	Difference	Minimum Wage	Family Living Wage	Difference
Philippines	283.67	703.46	(419.80)	7,375.33	18,290.07	(10,914.74)
National Capital Region (NCR) b/	350.00	749.00	(399.00)	9,100.00	19,474.00	(10,374.00)
Areas outside NCR	217.33	657.93	(440.60)	5,650.67	17,106.14	(11,455.48)

Cordillera Administrative Region (CAR)	225.00	725.00	(500.00)	5,850.00	18,850.00	(13,000.00)
Region I (Ilocos)	212.00	702.00	(490.00)	5,512.00	18,252.00	(12,740.00)
Region II (Cagayan Valley)	208.00	621.00	(413.00)	5,408.00	16,146.00	(10,738.00)
Region III (Central Luzon)	263.50	642.00	(378.50)	6,851.00	16,692.00	(9,841.00)
Region IV (Southern Tagalog)	277.00	660.00	(383.00)	7,202.00	17,160.00	(9,958.00)
Region V (Bicol)	209.00	628.00	(419.00)	5,434.00	16,328.00	(10,894.00)
Region VI (Western Visayas)	205.00	553.00	(348.00)	5,330.00	14,378.00	(9,048.00)
Region VII (Central Visayas)	223.00	725.00	(502.00)	5,798.00	18,850.00	(13,052.00)
Region VIII (Eastern Visayas)	206.00	469.00	(263.00)	5,356.00	12,194.00	(6,838.00)
Region IX (Western Mindanao)	196.00	655.00	(459.00)	5,096.00	17,030.00	(11,934.00)
Region X (Northern Mindanao)	218.00	627.00	(409.00)	5,668.00	16,302.00	(10,634.00)
Region XI (Southern Mindanao)	224.00	623.00	(399.00)	5,824.00	16,198.00	(10,374.00)
Region XII (Central Mindanao)	213.50	600.00	(386.50)	5,551.00	15,600.00	(10,049.00)
CARAGA	200.00	nda	nda	5,200.00	nda	nda
Autonomous Region in Muslim Mindanao (ARMM)	180.00	981.00	(801.00)	4,680.00	25,506.00	(20,826.00)
Author's computation based on DOLE data Minimum wage rates are highest nominal wage for June 2006; Family Living Wage as of May 2006 a/ Monthly Minimum Wage and Family Living Wage assumes 26 working days per month b/ Minimum wage for NCR includes P25 increase to take effect on July 11

Table 2 Minimum Wage Rates 1999 and 2006 (non-agriculture, in pesos)
	1999	2006	Difference
Philippines	193.67	283.67	90.00
Metro Manila	223.50	350.00	126.50
Areas outside Metro Manila	163.83	217.33	53.50

CAR	170.00	225.00	55.00
Region I (Ilocos)	183.00	212.00	29.00
Region II (Cagayan Valley)	172.00	208.00	36.00
Region III (Central Luzon)	175.50	263.50	88.00
Region IV (Southern Tagalog)	200.00	277.00	77.00
Region V (Bicol)	163.00	209.00	46.00
Region VI (Western Visayas)	160.00	205.00	45.00
Region VII (Central Visayas)	165.00	223.00	58.00
Region VIII (Eastern Visayas)	153.00	206.00	53.00
Region IX (Western Mindanao)	155.00	196.00	41.00
Region X (Northern Mindanao)	160.00	218.00	58.00
Region XI (Southern Mindanao)	158.00	224.00	66.00
Region XII (Central Mindanao)	145.00	213.50	68.50
CARAGA	158.00	200.00	42.00
ARMM	140.00	180.00	40.00
Source of basic data: DOLE

Permission is granted to reprint or redistribute this article, provided its author/s and Bulatlat are properly credited and notified.

Wages Still Insufficient for Decent Living