THE regional wage board has approved a P40 daily minimum wage hike in the National Capital Region (NCR)—the biggest increase in the region to date—due to the country’s high inflation.
In a phone interview on Thursday, Regional Tripartite Wages and Productivity Board-NCR (RTWPB-NCR) chairperson Sarah S. Mirasol told BusinessMirror the increase will be contained in Wage Order (WO) NCR-24.
“It [WO NCR-24] was already affirmed by the NWPC [National Wages and Productivity Commission]. It is expected to be published tomorrow (June 30) and to take effect on July 16,” Mirasol said.
Under WO NCR-24, the new daily minimum wage for non-agriculture workers will be at P610, while those in agriculture, service/retail establishments employing 15 workers or less, and manufacturing regularly employing less than 10 workers will be at P573.
Currently, the minimum wage rate in Metro Manila ranges from P533 to P570 under WO NCR-23, which was issued last June 4, 2022.
Sole dissenter
The RTWPB-NCR approved WO-NCR on June 26, 2023, with a vote of 5-1, after their deliberation on the two wage petitions filed by the Kapatiran ng mga Unyon at Samahang Manggagawa (Kapatiran) and Unity for Wage Increase Now (UWIN).
“The increase was approved to help workers cope with inflation,” Mirasol said.
The labor representative was the sole member of the board, who opposed WO NCR-24 for being too low compared to the demands from labor groups.
Kapatiran sought a P100 minimum wage increase, while UWIN demanded for the existing minimum wage in Metro Manila to be increased to P1,141.
Mirasol said the board was unable to grant the exact amount by both petitioners since the business sector is still recovering from the effects of the pandemic.
Wage increase impact
In anticipation of the possible negative impact of the P40-wage hike on some vulnerable establishments, Mirasol said the RTWPB-NCR is ready to give temporary exemptions from WO NCR-24 to qualified firms.
The exemptions can be availed by distressed establishments, new business enterprises, retail/service establishments employing not more than 10 workers, and establishments adversely affected by natural calamities as stated by NWPC omnibus rules.
Also not covered by the new wage order are Barangay Micro Business Enterprises pursuant to Republic Act No. 9178.
WO NCR-23 is expected to directly benefit around 3 million wage workers in NCR.
Of which, 1.1 million are minimum wage earners, while 1.5 million are full-time workers earning above minimum wage but will be affected by wage distortions.
The Department of Labor and Employment (DOLE) said a wage distortion occurs when the usual differentials in wage rates between groups of employees in an establishment are drastically reduced or eliminated due to mandated wage increases.
Mirasol said they will offer guidance to provide the affected establishments with formulas, which they can use to correct “wage distortion” once WO NCR-24 takes effect.
Employers to comply
The Employers Confederation of the Philippines (ECOP) said it will comply with the new wage order.
ECOP President Sergio R. Ortiz-Luis Jr. told the BusinessMirror via phone call on Thursday that the wage hike is the “nearest to objective that we can find nowadays considering that we are all represented here—the labor, the employers, and the government.”
This, the ECOP chief said, while noting a lot of microindustries might have difficulty complying with the new minimum wage.
“We have often said that after all the deliberations, we will try our best to comply with the order,” Ortiz-Luis added.
Last month, eight major business groups including ECOP penned a letter dated May 17, 2023 to Senator Jinggoy E. Estrada, who chairs the Senate Committee on Labor, Employment and Human Resources to express their concern on the wage hike proposal.
The groups noted that the Philippines already has one of the highest minimum wages among members of the Association of Southeast Asian Nations (Asean).
In fact, they said the matrix published by the National Wages and Productivity Commission (NWPC) of the Department of Labor and Employment (DOLE) indicated that as of August 31, 2022, the Philippines’s $10.14 daily minimum wage rate is second to Malaysia’s $11.16.
The business groups said they share the concern of Estrada and the bill’s authors on how the effects of inflation “have continued to dampen the purchasing capacity of Filipinos.”
However, they said, “Only a small percentage of the total work force—16 percent of about 8 million in the formal sector out of the 50 million in total number of Filipino workers—will be able to benefit from this proposal.”
Earlier, the business groups said if greenlit, this wage hike may appear to provide “short-term relief to a ‘happy’ few.” But, they noted, “We also should not ignore that the rising inflation has also negatively impacted businesses.”