Labour groups in the Philippines have warned of increased industrial unrest after workers in Metro Manila were granted an effective daily minimum wage increase of just PHP15 (about US$0.28).
Labelling the amount approved by the Department of Labor and Employment (Dole) as “crumbs”, the country’s largest labour movement today warned there could be consequences for employers, as well as those who approved the “pittance” vying for government office in the 2019 mid-term elections.
In an email to AEC News Today ALU-TUCP spokesperson Alan A Tanjusay forecast an increase in industrial unrest at the enterprise level.
“It has been happening with temporary workers clamouring for regular work, as well as poorly paid workers demanding higher wages with their employer at an enterprise level. He said he expected yesterday’s announcement will see an increase in such actions.
On Monday the Dole confirmed the PHP25 ($0.47) daily minimum wage increase that was prematurely announced last week by Employees Confederation of the Philippines (ECoP) acting president, Sergio R. Ortiz-Luis, Jr. (See: Asean minimum wages: ‘Measly’ pay rise sees Filipinos’ wages continue to shrink (video))
Manila wage rise comes with a kicker
The daily minimum wage for a Metro Manila employee in the nonagriculture sector will rise to PHP537 ($10.11) per day. If they work in retail, service, or manufacturing sectors with fewer than 10 employees they will earn the same as agriculture workers, PHP500 ($9.41) per day.
However, there’s a kicker. The new rates include a so-called PHP10 ($0.19) daily cost of living (cola) allowance that employers are not obligated to pay.
Mr Tanjusay told AEC News Today that in the past the Regional Tripartite Wages and Productivity Board for the NCR (RTWPB-NCR) had put a cola on top of the basic wage rise to give the appearance the increase was larger than actual. This year it is included in the increase.
Describing the subterfuge as “an old trick to make it appear business is giving more than it should”, Mr Tanjusay said cola is not mandatory, and not factored in to overtime pay, bonuses, etc. “It’s not based on anything. It’s a figure plucked from the air”, he said.
According to Mr Tanjusay the new Metro Manila daily minimum wage “fails to strike an objective balance between business and labour’s interests.
“It’s simply a by-product of employers haggling for the cheapest minimum wage and not a result of evidenced and science-based data”, he added.
Some 70 per cent of the ALU-TUCP membership earn minimum wage. In the lead-up to Monday’s ruling it had been arguing — and continues to argue — that a PHP334, or $6.24 per day increase is necessary to bring Metro Manila minimum wages up to date with rapidly rising cost of living expenses.
Philippine employers: Any minimum wage increase is bad
Not so fast say the employers. According to a report in Business Mirror based on a written statement from ECoP, the employer’s group feels any increase in minimum wage will “imperil the Philippines’ investment reputation”.
The statement, Business Mirror says, warns that an increase in daily minimum wages will also “impact on the ease and cost of doing business”, adding “the Philippines has the highest minimum wage rate, with the exception of Singapore, Thailand and Brunei [Darussalam], whose economies are far better”.
However, while the ECoP statement warns that increasing the minimum daily wage risks seeing the country’s competitiveness ranking slip further, Business Mirror points out that the country’s 11 place fall in The World Bank’s 2019 ease of doing business report was primarily due to difficulty in the areas of credit, starting a business, and enforcement of contracts.
It also points out that the country’s nine point fall in the IMD World Competitiveness Rankings 2018 was due to ‘slowdowns in tourism and employment, worsening of public finances, and concerns on education’. Everything else but the country’s labour cost, it says.
Philippine wage growth trails the region
Similarly our Asean Minimum Wages 2018-2019 table shows that Philippines economic growth last year and for the year to date is among Asean’s most robust. Philippines minimum wage growth from 2013 to the present day, however, is the regions lowest.
Across the Philippine archipelago minimum monthly wages calculated on a 28-day month range from PHP17,840 (US$145) in the Autonomous Region in Muslim Mindanao (ARMM) to 15,036 (US$280) in Metro Manila.
Between 2013 and 2017 minimum daily wages in the Philippines grew 15 per cent at the top end and 10 per cent at the low end. If extended to include the most recent increase they have grown 20.83 per cent at the low end and 15.70 per cent for Metro Manila workers over the past six year.
Despite arguing strenuously in its submission to Business Mirror that a larger increase in the daily minimum wage would impose a significant burden on employers and the country, ECoP then experiences a foot in mouth moment.
According to Business Mirror the ECoP statement claimed that raising the daily minimum wage would only benefit a small proportion of the country’s workers. Only some two million, or 5 per cent, of the country’s 40 million workers earn minimum wage, it said, with some 952,485 in Metro Manila.
For those fortunate to receive the full PHP25 increase the Philippine Daily Inquirer said recipients will be able to afford an extra four sachets of 3-in-1 instant coffee per day, one Nissan cup noodles, or one 150-gram (5.3 ounce) can of sardines or canned meat loaf.
Update: The article was last updated on November 15 at 18:49. The table was replaced due to an error contained in the original.
- P25 hike order by Metro Manila Wage Board brings daily minimum to P537 (Business Mirror)
- P25 basic pay hike in Metro Manila: Labor, business unhappy (Philippine Daily Inquirer)
- Bello bares new minimum wage hike for NCR workers (Philippine News Agency)
- ‘Higher pay makes PHL less business-friendly’ (Business Mirror)
Between November 2010 and February 2012 she was a staff writer at Daylight Online, Nigeria writing on health, fashion, and relationships. From 2010 – 2017 she worked as a freelance screen writer for ‘Nollywood’, Nigeria.
She joined AEC News Today in December 2016.