Santos, Sarah Jane B.

2L

Does the RTWPB need to increase the current minimum wage in the NCR?

Yes, there is a need for the RTWPB to increase the minimum wage in the NCR.
The minimum wage in the NCR is set at P512 per day. At current rates, the Philippines
provides the highest minimum wage among ASEAN countries according to the latest
figures posted by the National Wage and Productivity Commission. For example, a
minimum wage earner in Thailand, depending on the area where he/she works, can
earn as much as $9.02 to $9.32 per day. In Malaysia, a worker earns with a daily rate of
$7.27 to $7.90. These figures are comparatively lower than the P512 or about $10.05
that a minimum wage earner could earn if he is working in Manila. However, this does
not mean that the wages set by the RTWPB is enough to provide for the need of Filipino
families living in the borderline considering that factors such as cost of living, inflation,
consumer taxes and employee benefits received by such workers have not yet taken in
to consideration.

Just last September of 2017, the RTWPB issued a wage order granting a 21-
peso wage increase to minimum wage earners. Various labor groups were not satisfied
with wage hike because it it is way below the amounts that they proposed on a petition
in June of the same year. The Associated Labor Unions (ALU) sought a P184 increase,
while the Trade Union Congress of the Philippines (TUCP) asked for a P259 increase
and the Association of Minimum Wage Earners and Advocates (AMWEA) wanted the
minimum wage to be raised to P1,200 in 4 tranches.

A survey conducted by the PSA found that an average Filipino household allots
42% of its monthly income to food expenses. Considering the total monthly take home
of a minimum wage earner, he has a monthly budget of P4,730 for food. Divide this by
the number of days in a month and it will show that a family with only one breadwinner
will only have a P157 allotment for an entire day’s meals. This amount is not enough
should they desire to abide to the guides set by the Food and Nutrition Research
Institute (FNRI) in order to have healthy family members because such
recommendations of the FNRI would require an average budget of P500 per day on
food alone.
 Furthermore, the wage hike granted by the Orders issued by the RTWPB the
past years is only considered as pittance, treating the laborers as beggars because
notwithstanding the fact that there had been increases in recent times, the last
significant wage hike was 28 years ago when President Corazon Aquino granted 25
peso across the board wage increase which was a considerable amount during that
time. At the same time, a significant increase is proper by the reason that the current
rate, which is 512, the real value thereof, according to National Wages and Productivity
Commission (NWPC), is only about P357.

Lastly, Research group IBON said that accelerating inflation is rapidly eroding the
real wage and purchasing power of minimum wage earners in the National Capital
Region (NCR). Inflation has been steadily accelerating since the start of the Duterte
administration to reach a six-year-high of 3.8% in Q1 of 2018. The said inflation was
faster than the 3% average inflation in the fourth quarter of the last year, and the 3.2%
average of the same time in 2017. Additionally, it was also close to the upper end of
BSP’s initial target of 2%-4%.

The higher results were said to have brought about by the implementation of the
TRAIN Law last January, wherein despite the lowering of income tax, increased taxes
on fuel, motor vehicles, and sugar-sweetened beverages.

However, last January, DOLE Secretary Silvestre Bello said in a press

conference that the minimum wage increase sought by the Associated Labor Unions –
Trade Union Congress of the Philippines cannot be feasible just yet since. Instead, he
was proposing to provide for a Php500 cash subsidy per month for minimum wage
laborers. Such subsidy would come from the national government’s appropriation for its
conditional cash transfer program, since the Php157 proposal by the ALU – TUCP
cannot yet be possible.

In view of the foregoing, the RTWPB therefore needs to increase the current
minimum wage in order to cater to the needs Filipino families in accordance to a
minimum standard of living which is sufficient enough to provide the Filipino family
comfort and an opportunity to take themselves out of poverty.

Data shows that the Philippines has learned to grow its aggregate output faster
and more sustainably in recent year. But, it still has to learn to achieve sustained
reduction in the incidence rate of poverty.

It is important to note that there is a need for the government to recognize and
address the need to temper discriminatory impact of minimum wage on the employment
opportunities of those who are at a disadvantage due to their economic and financial
standing, the less educated, and women. Because of this, it would not hurt to develop
and test different confirmed and studied methods that may reduce, if not completely
reverse, the discriminatory effects of the minimum wage to promote greater
inclusiveness.

In one study conducted by the Philippine Institute for Development Studies, they
discovered that minimum wage caused firms to reduce or cut down on hiring production
workers. Theoretically, it may be foreseen that minimum wage affects employment
because of its scale effects. This means that because it would be difficult for small scale
enterprises to boom into large establishments, the production and demand for workers
decrease at the lower end of the scale resulting into larger firms obtaining more
production workers, presumably at starting wages lower than what the laborers expect
even though they have gained enough experience.

Therefore, since there have been numerous studies on minimum wage and its
effects or impact on society, the government should put more effort in divesting further
into this issue. The issue on increasing minimum wage is more than just the adjustment
on the capability of Filipinos to survive in this country, but a showing that the people in
our government are actually smart enough to bring about equity and equality for the
laborers who have fought tooth and nail in order for their families to survive.
References

http://ibon.org/2018/04/working-filipinos-real-wage-purchasing-power-weakening-under-
duterte/

http://www.nwpc.dole.gov.ph/

https://www.rappler.com/newsbreak/fast-facts/187932-minimum-wage-asean-countries
http://newsinfo.inquirer.net/931008/metro-minimum-wage-hiked-to-p512

http://www.gmanetwork.com/news/money/economy/620830/labor-group-urges-duterte-
to-hike-ncr-wages-to-p675-per-day/story/

https://www.rappler.com/nation/174859-labor-union-challenge-minimum-wage-board-
employers

https://www.rappler.com/business/200647-inflation-rate-philippines-q1-2018

http://newsinfo.inquirer.net/961398/dole-considering-p500-monthly-subsidy-for-
minimum-wage-earners

http://cnnphilippines.com/news/2017/07/06/labor-groups-want-minimum-wage-raised-to-
at-least-p675.html