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the History and Impact of Wage Setting in the Philippines

Ensuring feudal, semi-feudal and semi-colonial exploitation of the Filipino people characterizes the
history of wage setting in the Philippines. Through the first wage law RA 602 enacted in 1951 to
the present RA 6727 enacted in 1989, the Philippine State has guaranteed that the Filipino working
people remain enslaved to the drive of the local ruling classes and imperialism to increase their
profits.
Since the 1950s, the productivity of the people has increased annually. However, wages paid to
direct producers averaged only 30% of the wealth produced from 1951 to 1998. The biggest part of
the unpaid value produced or about 38% is spent to finance the parasitic lifestyles of the ruling
classes, which constitutes only 3% of the countrys population.
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About 12 percent is spent to
finance the constant deficits in the colonial trade and to fund government operations, more than 60
percent of which are spent on payments of local and foreign debts and lost to corruption. Finally,
only 20% is used for the development of the means of production.
Consequently, the economy has remained agrarian, backward and pre-industrial. Meanwhile, the
lives of the people the industrial proletariat, semi-proletariat, poor peasants and lower middle
peasants who rely on selling their labor power to augment their farm income, and the petty
bourgeoisie have progressively deteriorated.
Objectives of the Wage Laws
There are already twenty-one wage laws executed by the Philippine State since 1951. The laws, the
years of their execution and the corresponding minimum wage granted are the following:
Table 1. 1951-1989 Wage Legislations Granting Increases in the Basic Minimum Wage
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Effectivity
Date Order/Act/Decree
Minimum Wage
(in PhP)
Non-Agriculture Agriculture
Metro
Manila
Outside
Metro
Manila
Metro
Manila
Outside
Metro Manila
4 August 1951 Minimum Wage Law (RA 602) 4.00 4.00 2.50 2.50
8 August 1963 Land Reform Code (RA 3844) 3.50 3.50
21 April 1965 RA 4180 6.00 6.00 3.50 3.50
18 June 1966 RA 4707 6.00 6.00
17 June 1970 RA 6129 8.00 8.00 4.75 4.75
1 June 1976 Presidential Decree 928 10.00 9.00 7.00 6.00
1 July 1978 Presidential Decree 1389 11.00 10.00 8.00 7.00
1 April 1979 Presidential Decree 1614 13.00 12.00 10.00 9.00
18 August
1980
Presidential Decree 1713 14.00 13.00 11.00 10.00
1 January 1981 Presidential Decree 1751 18.00 17.00 15.00 14.00
6 July 1983 Wage Order No. 2 19.00 18.00 16.00 15.00
1 Nov. 1983 Wage Order No. 3 20.00 19.00 17.00 16.00
1 Dec. 1983 Wage Order No. 3 21.00 20.00 18.00 17.00
1 May 1984 Wage Order No. 4 32.00 31.00 27.00 21.00
16 June 1984 Wage Order No. 5 35.00 34.00 30.00 24.00
1 Nov. 1984 Wage Order No. 6 37.00 36.00 32.00 26.00
1 May 1987 Executive Order No. 178
46.00
41.50a/
45.00
40.50a/
38.50
35.00a/
30.00
28.00a/
1 October
1987 Executive Order No. 178
54.00
46.00a/
53.00
45.00a/
44.00
38.50a/
33.50
30.00a/
1 January 1988 Executive Order No. 178 54.00a/ 53.00a/ 44.00a/ 33.50a/
14 Dec. 1987 Republic Act 6640 64.00 64.00 54.00 43.50
1 July 1989 Republic Act 6727
89.00 89.00 79.00
74.00b/
58.50
a/ Applicable toworkers in establishments with less than 30 employees and with paid-up capital of
PhP500,000 or less. b/ Applicable to workers in plantation establishments with annual gross sales of
less than PhP5Million.
Though expressed in deceptive language, the parameters of wage determination set by all of the
laws have always been based on two paramount objectives:
1. The maintenance and reproduction of a vast army of undernourished and undereducated
wealth producers that correspond to the labor requirements of a backward economy.
The laws express this in pseudo-humanitarian terms like the need for sufficient wages
to maintain the health, efficiency and general well-being,
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etc. of the working classes.
Nonetheless, the descent of the lives of the people to deep poverty exposes the
exploitative nature of the laws. The Philippine government itself, since it started
estimating the extent of poverty in the country, admits that the magnitude of poor
individuals nationwide was 49.3% in 1985, 45.5% in 1988, 46.5% in 1991, 40.6% in
1994 and 36.8 in 1997.
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2. The guaranteed extraction of huge profits by the local ruling classes and imperialism.
The wage laws express this in pseudo-democratic language like to allow business and
industry reasonable returns on investment, etc.
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Regardless of the sugarcoating, figures
provided by the NSCB-published national accounts reveal that returns on investments
are far from being democratic nor reasonable. About 60% 70% of the wealth produced
go directly to private profits of the local ruling classes and imperialism. Worse, the
biggest bulk allocated for government expenditure, which constitutes 10% of the
produced wealth, goes to bureaucratic corruption and interest payments of government
debts.
History of Wage-Setting in the Philippines
A common feature of all the wage laws (except during Martial Law when Marcos unilaterally
determined wage levels) is the appointment of wage boards. The wage boards track developments
in the local economy and recommend or determine therefrom the levels of wages to grant the
working people. Clearly, these are created to ensure the promotion of the interests of imperialism
and the local ruling classes during deliberation of wage matters. The members of the wage boards
mainly come from representatives of the government and private property owners themselves.
Representatives from the public or from the labor sector are appointed to provide a democratic
facade. However, the blatantly exploitative nature of all the wage laws betrays either the puppetry
or impotence of the so-called labor representatives.
The setting of wages evolved in a manner that conforms to the escalating crisis of the semi-colonial
semi-feudal economy and of the world under imperialism. The changes took place in three distinct
periods; pre-Martial Law or from 1951 1972, Martial Law or from 1972 1986, and from 1987
to the present.
Pre-Martial Law Wage Laws and Their Impacts
Five wage laws were legislated during this period RA 602, 3844, 4180, 4707 and 6129. The
Philippine Congress and Senate enacted these laws. A distinct attribute of these pre-
Martial Law wage laws is their recognition of the most oppressive feudal relations
like tenancy where landlords arbitrarily determine the share of their tenants, feudal
servitude and other forms of feudal rent. These ensured that the vast majority of the
working people remain enslaved by feudalism. These also set the precedent for the
profeudal bias of succeeding wage laws.
From the first law RA 602 enacted in 1951, workers in landlord estates (from 12 hectares up) were
discriminated to receive 37.5% less than their counterparts in the non-agriculture
sector. The law also prescribed that the tenants that comprise the majority of workers
in these estates are not covered by it. Tragically, it did not recognize or it glossed
over the fact that all family members of tenants exert labor to produce commodities
in the estates. It also safeguarded the right of landlords to exact feudal servitude from
their tenants by exempting domestic servants from its coverage. Finally, it allowed
landlords to deduct up to 86% or PhP1.50 of the PhP1.75, 88% or PhP1.75 of the
PhP2.00, and 90% or PhP2.25 of the PhP2.50, for rent like board and lodging etc.
from wages granted by the law for the corresponding 1
st
, 2
nd
and 3
rd
years.
Since then, by reactionary legal fiat, the poor peasants, lower middle peasants and farm workers
in feudal estates have become the most oppressed section of the Filipino working
classes. By the 3
rd
wage law enacted in 1965, the PhP37.5% difference between the
wages of agriculture workers and nonagriculture workers increased to more than
41%. The 5
th
wage law enacted in 1970 decreased the difference by one percentage
point or to 40%.
These wage laws and other state instruments boosting feudal (i.e. share-tenancy and feudal
servitude, etc.) and semi-feudal relations (i.e. wage-labor relations with rents eating up 86-90% of
wages) ensured that:
1. The economy remains backward and agrarian. Denied of their just share from the fruits
of their labor, the peasants to overcome starvation are forced to rely on petty
production for direct consumption including small-scale backyard gardening and animal
husbandry, food gathering from the land, forests, mountains, rivers and the sea. With no
surplus to invest in upgrading production tools they are forced to produce handcrafted
agricultural instruments. The utility of these primitive instruments some work animals,
bolo, sickle, plough, hoe, shovel, bag and sack, etc. handcrafted by the peasants for the
feudal estates are in reality part of the land rent.
As all these products do not pass through the market, these are not reflected in the
national accounts that understate by an incredulously wide margin the share of
agriculture in the GDP. This provides the Philippine State ammunition to assert that the
Philippine economy has continuously industrialized. More importantly, the wage boards
use the understated labor productivity in the agriculture sector as basis to insist lower
wage levels for workers therein.
2. The main productive force,
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the starved peasantry, serves as an endless source of labor
power desperate to find jobs as seasonal farm workers in feudal and imperialist-owned
estates producing commodities like copra, sugar, banana, pineapple etc. for export. Or as
low paid workers in bourgeois comprador and or imperialist-owned manufacturing and
service firms in the cities or in extractive industries like mining and logging.
In later years, a big part of this huge army of excess laborers became prime commodities
for export. From the 1970s, exporting of millions to work in imperialist-owned firms in
other third world countries like the Middle East began. Exporting women to become
domestic helpers in places like Hong Kong or prostitutes in countries like Japan began in
the 1980s. From the 1990s commenced the export of professionals from the petty
bourgeoisie especially nurses, doctors, midwives and other health workers to serve as
low-level medical personnel in imperialist states.
Of course, these pre-Martial Law wage laws setting the precedent for the clear pro-feudal bias of
succeeding wage laws does not mean that these and their successors are proindustrial workers. Non-
agriculture workers, especially the industrial proletariat, in manufacturing firms owned by
imperialism and the bourgeois compradors suffer a higher rate of exploitation due to their higher
rates of productivity.
Table 2. Magnitude of Labor Exploitation Under the 5 Pre-Martial Law Wage Laws
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(In PhP
at Current Prices)
Year Labor
Productivity
9

Average Wages Unpaid Labor
10

Amount
% of Value
Created Amount
% of Value
Created
1956 1,251.62 363.76 29.06 887.24 70.94
1957 1,349.62 497.47 36.86 852.15 63.14
1958 1,350.16 498.83 36.95 851.33 63.05
1959 1,446.59 532.62 36.81 913.97 67.69
1960 1,578.40 575.94 36.49 1,002.46 63.51
1961 1,588.10 578.25 36.41 1,009.85 63.59
1962 1,703.07 616.158 36.18 1,086.91 63.82
1963 1,904.98 695.31 36.50 1,209.67 63.50
1964 1,955.83 711.50 36.38 1,244.33 63.62
1965 2,191.14 801.88 36.60 1,389.27 63.40
1966 2,264.93 822.65 36.32 1,442.28 63.68
1967 2,317.97 843.22 36.38 1,474.76 63.62
1968 2,599.77 957.82 36.84 1,641.95 63.16
1969 2,942.77 1,078.50 36.65 1,864.27 63.35
1970 3,478.25 1,290.63 37.10 2,187.62 62.90
1971 3,890.90 1,519.19 39.04 2,371.71 60.96
As shown in Table 2, the productivity of workers from 19561971 increased every year. The
PhP1,251 average productivity in 1956 increased to PhP3,890 or 211% by 1971. However, average
wages stagnated between 29% 39% of the value of the created commodities. Still, these wage
figures are very high and do not reflect the real amount of wages paid to the majority of the labor
force. No doubt the very high wages, benefits, bonuses etc. paid by the ruling classes to themselves
and or to their managers, CEOs, CFOs, directors, lawyers etc. and the foreign consultants, managers
etc. in both imperialist and bourgeois comprador-owned firms pulled up the amount of wages paid
estimated by the NSCB. At any rate, the magnitude of exploitation averaged between 60plus% -
70plus% which is quite high.
The appropriation of the wealth produced by the Filipino working people under the five wage laws
is in Table 3.
Table 3. Appropriation of the Wealth Created During Pre-Martial Law
11
(In PhP
Millions at Current Prices)
Year GDP
Consumption of
Wage
Earners
Consumption of
the Rich
12

Government
Expenditures
Colonial Trade
Deficit
Capital
Formation
Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP
1951 7,498 2,265 30.21 3,343 44.59 586 7.82 39 .52 1,391 18.55
1952 7,847 2,339 29.81 3,784 48.22 641 8.17 * * 1,322 16.85
1953 8,320 2,483 29.84 3,640 43.75 680 8.17 * * 1,616 19.42
1954 8,610 2,545 29.55 4,044 46.97 703 8.16 * * 1,579 18.34
1955 9,173 2,692 29.35 4,286 46.72 759 8.27 104 1.13 1,636 17.83
1956 10,023 2,913 29.06 4,560 45.50 828 8.26 124 1.24 1,810 18.05
1957 10,936 4,031 36.85 3,950 36.12 891 8.15 438 4.01 2,187 20
1958 11,552 4,268 36.94 4,240 36.70 957 8.28 224 1.94 2,206 19.10
1959 12,594 4,637 36.81 4,050 32.16 1,031 8.19 242 1.92 2,558 20.31
1960 13,478 4,918 36.48 4,560 33.83 1,141 8.47 59 .44 2,510 18.62
1961 14,682 5,346 36.41 5,070 34.53 1,315 8.96 392 2.67 3,045 20.74
1962 16,421 5,941 36.17 5,412 32.96 1,481 9.02 415 2.53 3,342 20.35
1963 19,126 6,981 36.50 6,052 31.64 1,803 9.43 * * 4,229 22.11
1964 20,677 7,522 36.37 7,048 34.09 1,995 9.65 288 1.40 4,867 23.54
1965 22,617 8,277 36.59 7,619 33.69 2,211 9.78 * * 5,301 23.44
1966 24,878 9,036 36.32 8,434 33.90 2,389 9.60 * * 5,526 22.21
1967 26,717 9,719 36.37 9,585 35.88 2,669 9.99 171 .64 6,288 23.54
1968 29,835 10,992 36.84 10,152 34.03 2,959 9.92 772 2.59 6,738 22.58
1969 33,062 12,117 36.64 10,807 32.69 3,255 9.85 1008 3.05 7,400 22.38
1970 39,506 14,659 37.10 11,513 29.14 3,669 9.28 * * 8,432 21.34
1971 47,648 18,604 39.04 12,894 27.06 4,456 9.35 * * 10,015 21
* The economy achieved trade surplus during the year
Note: Amounts and percentages do not add up to the GDP figures because of statistical discrepancy
admitted by the
NSCB.
Three things are sharply evident from the above appropriations. One, the stagnation of wage levels
to about 34.72% of the GDP. This prevented the improvement of the lives of the wealth producers.
From the annual figures on personal consumption expenditures published by the NSCB, the total
wages paid indicate that the wealth producers can only afford a 51.55% share of the total
consumption while the rich classes enjoyed 48.45% of it. The estimated consumption share of the
former could be much lower as deductions like the automatically withheld taxes from the salaries of
fix wage earners is not yet factored in.
Two, the parasitic consumption of the rich; this parasitic consumption involves gobbling up of
imported or locally-assembled import dependent luxury goods like cars, high-priced gadgets, posh
dwellings like mansions, etc. This diverted funds that should have been invested to upgrade the
means of production. While the consumption of the rich classes averaged 37.1% of the GDP, capital
formation averaged only 17.65%.
Three, the economy suffered a chronic deficit in the balance of trade. Achievement of surplus
happened only 8 times while deficits occurred 13 times. Though aggregate deficits from colonial
trade amounted to a mere PhP2,977Million or .75% of the PhP395,200Million aggregate GDP from
1951-1971, the dependence on this unequal relation shows a tendency of rapid ascent. Total imports
amounted PhP70,476Million or 17.83% while total exports amounted to PhP67,499Million or
17.08%. This means that the dependence on colonial trade amounted to almost one fifth of the
countrys GDP.
The gross inequality in the distribution of economic benefits created deep social divisions, divided
the ranks of the ruling classes and led to the the rapid advance of the peoples movement for
revolutionary change that plunged the semi-colonial semi-feudal order into deep crisis. This gave
Marcos a reason to declare Martial Law. With the blessing of US imperialism Marcos seized all
state power and employed open terrorist rule to crush the advancing mass movement. He also
confiscated the properties of his rivals from the ruling classes. Marcos and his clique monopolized
all main industries under the guise of putting these under state control. But what he did in fact was
concentrate control of the countrys wealth unto himself and to his clique, deepen imperialisms
control over the economy and exacerbate the crisis in the country.
Boasting comprehensive social reforms as the cornerstone of his rule he declared a program for land
reform to arrest the advancing tide of social revolution. The program is bogus. It exempted the
feudal estates producing exports in the colonial trade from coverage. Likewise, Marcos and the big
landlords like Cojuangco, Benedicto and others exacerbated feudal and semi-feudal exploitation
through monopoly of the main agricultural export commodities like sugar and copra and extraction
of levies from the direct producers.
Meanwhile, with excessive funds siphoned from its monopoly of global oil, U.S. imperialism
infused massive finance capital into the country in the form of loans. Enrichment from the massive
inflow of loans that pawned future generations to perpetual indebtedness enabled Marcos and his
clique to make cosmetic reforms to decelerate the advance of the economic crisis for much of the
1970s.
Martial Law Wage Laws and Their Impacts
Marcos enacted 11 wage laws during his 15 years of terrorist rule. These wage laws have the
following distinct characteristics:
1. They seemingly promoted reforms by shortening of the gap between the wages of
workers in the non-agriculture sector relative to those in agriculture. The eight wage
laws from 1976 to 1983 reduced the 1970 40% wage difference between them to 27.5%.
However, the next three increased it again to 32.18% until the time the people ousted
Marcos from power.
2. These started the inequality between the wages of workers in comprador enterprises
engaged in agricultural production like the mammoth poultry and piggery farms within
Metro Manila relative to agriculture workers in the feudal countryside. The disparity
averaged 8.22% from 1976-1983 before it steeply rose to 32.18% from 1984-1986.
3. These started the decreased wages of industrial and service workers in the provinces
relative to their counterparts in Metro Manila. The discrepancy averaged 5.83%.
The deception is clear, what the US-Marcos dictatorship gave as token to appease the poor peasants,
lower middle peasants and farm workers in the feudal countryside, it took these away from
agriculture workers in Metro Manila and from industrial and service workers in the provinces.
Table 4. Magnitude of Labor Exploitation Under Martial Law Wage Laws (In PhP at
Current Prices)
Year Labor
Productivity
13

Average Wages Unpaid Labor
14

Amount
% of Value
Created Amount
% of Value
Created
1972 4,169.78 1,624.67 38.96 2,545.11 61.04
1973 5,064.91 2,000.07 39.48 3,064.84 60.52
1974 6,737.13 2,697.30 40.00 4,039.83 60.00
1975 7,633.29 2,987.27 39.13 4,646.02 60.87
1976 * * * * *
1977 * * * * *
1978 * * * * *
1979 * * * * *
1980 15,333.13 3,936.60 25.67 11,393.53 74.33
1981 16,968.73 4,393.85 25.89 12,574.88 74.11
1982 18,870.60 4,903.32 25.98 13,967.28 74.02
1983 20,745.15 5,080.10 24.49 15,665.05 75.51
1984 28,672.70 6,399.14 22.32 22,273.56 77.68
1985 31,533.03 7205.01 22.85 24,327.96 77.15
1986 32,325.71 7,635.70 23.62 24,690.01 76.38
* No data; figures from DOLE on employment for the year is not available.
The maintenance of the same magnitude of exploitation throughout the 1970s and its abrupt
increase in the 1980s certify the reactionary nature of the Martial Law wage laws. The working
people only got 39.52% of the wealth they produced from 1972-1975 while the ruling classes and
imperialism acquired 60.48%.
While the level of exploitation remained, the dictatorship made cosmetic reforms in other areas of
wealth appropriation in the 1970s. But by the 1980s, following the oversupply of agricultural
exports in the world market, the crisis of the semi-feudal, semi-colonial order plunged into
unprecedented depths. It plunged to a magnitude that is deeper than during pre-Martial Law. The
global crisis and that of the local reactionary order increased the avarice of the Marcos clique, the
ruling classes and imperialism in the 1980s. This undid what the cosmetic reforms achieved.

Table 5. Appropriation of the Wealth Created During Martial Law (In PhP
Millions at Current Prices)
Year GDP
Consumption of
Wage
Earners
Consumption of
the Rich
15

Government
Expenditures
Colonial Trade
Deficit
Capital
Formation
Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP Amount
% of
GDP
1972 53,515 20,851 38.96 14,586 27.76 5,485 10.25 ** ** 11,105 20.75
1973 68,123 26,901 39.48 15,823 23.23 6,498 9.54 ** ** 14,860 21.81
1974 93,545 37,452 40.00 22,064 23.59 9,298 9.94 2,181 2.33 25,207 26.95
1975 107,950 42,246 39.13 25,208 23.35 11,591 10.74 6,576 6.09 33,306 30.85
1976 127,211 50,881 39.99 26,275 20.65 13,729 10.79 7,533 5.92 41,799 32.86
1977 145,541 57,991 39.85 32,898 22.60 14,963 10.29 4,461 3.07 44,548 30.61
1978 167,249 65,491 39.16 39,496 23.59 16,814 10.05 7,193 4.3 51,479 30.78
1979 * * * * * * * * * * *
1980 243,749 62,592 25.67 94,232 38.66 22,099 9.10 11,940 4.90 70,898 29.09
1981 281,596 72,916 25.89 108,630 38.58 24,661 8.76 9,399 3.34 77,334 27.46
1982 317,177 82,415 25.98 125,689 39.63 28,929 9.12 18,401 5.8 88,414 27.88
1983 369,077 90,380 24.49 147,099 39.86 30,552 8.28 24,881 6.74 109,228 25.59
1984 524,481 117,053 22.32 245,204 46.75 36,880 7.03 5,502 1.05 106,719 20.35
1985 571,883 130,670 22.85 290,162 50.74 43,520 7.61 ** ** 82,047 14.35
1986 608,887 143,826 23.62 300,703 49.39 48,431 7.95 ** ** 92,777 15.24
*No data for the year.
**The economy achieved trade surplus during the year
Note: Amounts and percentages do not add up to the GDP figures because of statistical discrepancy
admitted by the
NSCB.
Conspicuous from the above is the intensification of the economys entrapment in the colonial trade
during Martial Law. Dependence on colonial trade reached to almost a fourth with exports
contributing 22.15% of the aggregate GDP or an increase of 5 plus percentage points from their
level during pre-Martial Law.
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Imports on the other hand reached 24.8% or an increase of almost 7
percentage points from pre-Martial Law level.
17
Total deficit increased to PhP98,067Million or
2.7% of the aggregate GDP.
There is a short-lived drop in the consumption of the ruling classes. This occurred during the early
years of Martial Law. From a consumption level of 37.1% relative to the GDP during pre-Martial
Law this decreased to 23.55% in 1972-1978. The difference in the consumption of the wealth
producers and the ruling classes tilted in favor of the former. Aggregate consumption of the wealth
producers amounted to PhP301,813Million or 63.12% while that of the ruling classes amounted
PhP176,350Million or 36.88%. No doubt, the seizure by Marcos and his cronies of the properties of
the old oligarchic families led the latter and many of their likes to rein in their voracity. Funds saved
from the partly reined greedy consumption of the ruling classes increased funds allocated to sustain
the fascist state machinery. The same trend occurred in developing the means of production. There
were slight increases in capital formation from 1972-1978.
The plunge of the economy from 1980 onwards signaled the collapse of the US-Marcos
dictatorship. The short-lived gains from the cosmetic reforms burst. The inequality in the
distribution of economic benefits intensified from 1980-86 with the people getting only 24.44% of
the wealth they worked for or a decrease of almost one third of what they used to get during pre-
Martial Law. Meanwhile, the ruling classes and imperialism acquired 75.56%. The steep decline of
wages paid to the wealth producers led to a proportionate decline to their share of the national
consumption. The consumption share of the rich, on the other hand, increased to 43.37%. The
plunge of the economy likewise forced the USMarcos dictatorship to rein government expenditures
from 1980 onward. Capital formation likewise dived and hit rock bottom in the last two years.
Post-Martial Law Wage Laws and Their Impacts
The worsening misery of the people belies the claim of the elite that the peoples uprising that
ousted the hated dictatorship instituted democratic relations in the Philippines. Impelled by the
global crisis of overproduction and the crisis of the local reactionary system, imperialism and the
local ruling classes have turned more rapacious than ever in exploiting the masses of the people.
The three wage laws EO 178, RA 6640 and RA 6727 enacted after the ouster of the Marcos
dictatorship deepened exploitation to unprecedented levels. Nineteen years under these laws have
turned the lives of workers, peasants and the petty-bourgeoisie to outright destitution.
All of these wage laws continued to maintain the pro-feudal and pro-imperialist economic relations
promoted by RA 602 and worsened by the wage laws under Martial Law. But RA 6727 enacted
under the presidency of the landlord Corazon Cojuanco Aquino turned out to be the most notorious
in terms of puppetry to landlord, big bourgeois comprador and imperialist interest.
The transformation of the landlord and bourgeois comprador-dominated wage boards from mere
advisory bodies into formal ones authorized to determine and execute the said ruling classes self-
serving judgments on wage matters is blatantly reactionary. The Philippine State, through this
mercenary provision, has practically given the ruling classes in the private sector the direct power to
determine the ultimate level of exploitation that they can impose on the working people. The law
also shields the Philippine State from direct accountability to the increased poverty of the wealth
producers correspondent to the increased magnitude of exploitation borne by the reactionary laws
effects. The granting of power to the regional wage boards also disperses the battle lines on this
issue to other regions where, away from the scrutiny of militant public opinion, the landlord and
bourgeois comprador classes hold firmer sway. It blunts the power of the mass movement in
fighting for nation-wide and across the board wage increases through concentrated political battles
in the National Capital Region or in the countrys center of reactionary power.
The law employs the most deceptive language to mask the above-mentioned mercenary character. It
maintains a pretentious faade of having democratic, just and progressive aims. Section 2 of RA
6727 says that the State needs to rationalize the fixing of minimum wages
1. To promote productivity-improvement and gain-sharing measures to ensure a decent
standard of living for the workers and their families;
2. To guarantee the rights of labor to its just share in the fruits of production;
3. To enhance employment generation in the countryside through industry dispersal; and
4. To allow business and industry reasonable returns on investment.
The first two aims are absurd and blatant lies. RA 6727, at the very first instance, ensured that the
interest of landlords remain tightly entrenched by pegging the wages in feudal estates like Hacienda
Luisita lower by 34.27% than wages paid to workers in service and industrial sectors. It also
discriminates against agricultural workers in Metro Manila who receive wages 14.24% 17.85%
less than the wages of workers in other sectors. Consequently, the disparity between wage levels for
Metro Manila and the provinces even for workers in the industrial and service sectors widened.
Whereas wages for the two sectors throughout the Philippines were equal at PhP89.00 in 1989, a
disparity of PhP4.81 or 4.5% appeared the following year and increased to PhP71.17 or 28% by
2001.
18


Enhancement of employment generation in the countryside through industry dispersal as maintained
by the third aim is not a real intent RA 6727. It is a deceptive articulation of the reactionary states
giving wider opportunity to imperialist and bourgeois comprador enterprises to increase their profits
by taking advantage of the cheaper labor cost in the provinces. The wide disparity between wages in
Metro Manila and wages in the provinces created by the landlord bourgeois comprador-controlled
regional wage boards induced multinational corporations to relocate to the provinces particularly in
the export processing zones. This fact unravels the real pro-imperialist purpose of RA 6727.
RA 6727 has not only allowed business and industry reasonable returns on investment as
maintained by the laws fourth aim. It is clear that (from the governments own statistics) the laws
only consequence is the increased exploitation of the working people. Since 1989, government and
business leaders have exuberantly bragged on the constant growth of the industry, service and
agriculture sectors. However, they remain indifferent to the stagnation of wages. The masses just
demands for across the board wage increase are met with obscure and immaterial arguments.
Among these are:
1. Higher wages is not good for the economy because it scares away foreign investments
(i.e. foreign monopoly capital) that presently employs a big part of the labor force.
2. Wage levels in the Philippines are too high. In fact, it is highest in the region.
3. Granting wage increases would lead to the bankruptcy of small and medium scale
enterprises.
4. Wage increase is impermissible at this time because of the fiscal crisis.
Preposterously absent from these discourses are the aims of guaranteeing the rights of labor to its
just share in the fruits of production, and ensuring a decent standard of living for the workers and
their families. Likewise, these divert discussions away from the irrefutable relationship of ever-
increasing profits and ever-increasing poverty consequent to the machination of the ruling classes in
implementing the law.
Table 6. Magnitude of Labor Exploitation Under EO 178, RA 6640 and RA 6727
19
(In PhP at
Current Prices)
Year Labor
Productivity
20

Average Wages Unpaid Labor
21

Amount
% of Value
Created Amount
% of Value
Created
1987* 34,070 8,263 24.25 25,807 75.75
1988* 37,688 8,857 23.5 28,831 76.5
1989 42,242 11,266 26.67 30,976 73.33
1990 48,498 12,620 26.02 35,878 73.98
1991 54,465 13,742 25.23 40,723 74.77
1992 57,037 14,218 24.92 42,819 75.08
1993 60,473 15,235 25.19 45,238 74.89
1994 67,631 17,097 25.28 50,534 74.72
* Under EO 178 and RA 6640
It is evident that labor productivity has been growing at a very past pace such that the productivity
in 1994 almost doubled that of 1987. However, wages have stagnated at a mere quarter of the value
each worker produced every year. The 74.9% average of unpaid labor for the indicated years is the
worst in Philippine history. Meanwhile, the allocation of the wealth produced show the increased
avarice of imperialism and the ruling.
Table 5. Appropriation of the Wealth Created Under EO 178, RA 6640 and RA 6727 (In PhP
Millions at Current Prices)
Year GDP Consumption of
Wage
Earners
Consumption of
the Rich
22

Government
Expenditures
Colonial Trade
Deficit
Capital
Formation
Amount
% of
GDP
Amount
% of
GDP
Amount
% of
GDP
Amount
% of
GDP
Amount
% of
GDP
1987 682,764 165,584 24.25 316,746 46.3
9
57,333 8.40 * * 119,476 17.5
1988 799,182 187,806 23.50 370,959 46.4
2
72,183 9.03 * * 149,193 18.67
1989 925,444 246,820 26.67 402,456 43.4
9
88,186 9.53 19,957 2.16 199,900 21.6
1990 1,077,233 280,309 26.02 486,752 45.1
9
108,843 10.1 62,133 5.77 260,165 24.15
1991 1,248,011 314,893 25.23 601,491 48.2
0
123,885 9.93 37,321 3.0 252,327 20.22
1992 1,351,559 336,914 24.92 682,295 50.4
8
130,524 9.66 66,205 4.9 288,401 21.34
1993 1,474,457 371,467 25.19 751,061 50.9
4
149,057 10.11 124,571 8.49 353,595 23.98
1994 1,692,932 427,963 25.28 830,787 49.0
7
182,776 10.8 106,793 6.31 407,367 24.06
1995 1,905,951 482,570 25.32 929,334 48.7
6
217,045 11.39 145,121 7.61 427,896 22.45
1996 2,171,922 563,686 25.95 1,031,660 47.5
0
259,501 11.95 190,839 8.79 521,605 24.01
1997 2,426,743 660,133 27.20 1,101,875 45.4
1
319,935 13.8 250,861 10.34 601,244 24.78
1998 2,665,060 752,964 28.25 1,227,124 46.0
4
354,406 13.3 176,761 6.63 542,099 20.34
*The economy achieved trade surplus during the year
Note: Amounts and percentages do not add up to the GDP figures because of statistical discrepancy
admitted by the
NSCB.
The data show that the rapacious consumption of the ruling classes has increased to unparalleled
heights devouring almost half of the wealth produced by the masses. Deficit in the colonial trade
has also increased to unprecedented levels. The
PhP1,013,813Million aggregate deficit in the colonial trade is almost equal to the 1990 GDP. It is
more than a fifth of the wages paid for the period and more than one half of government
expenditures. The reactionary government itself has turned more parasitical. Its expenditures
ballooned to a constant 10plus% of the GDP. This has surpassed the blood-sucking aptitude of the
Marcos fascist machinery. Deplorably, much of it goes to payment of foreign and domestic debts
and to the pockets of corrupt bureaucrats.
Indeed, the exploitation generated by the post Martial Law wage laws, especially RA 6727, has
reached monstrous proportions. The repeal of these reactionary wage laws and the enactment of
pro-labor laws in their stead can provide temporary reprieve for the working people. But only the
dismantling of the semi-colonial and semi-feudal social structure can ensure the peoples total
liberation.