DAVAO City—Workers in the Davao region will be receiving an addition of P56 to their daily wage after the Regional Tripartite Wages and Productivity Board (RTWPB) implements two tranches of a wage hike this month.
The first tranche of P30 is expected reflected in the workers’ August 16 payroll. This should mean an increase in daily wage to P370 for workers in the industrial, commercial and retail services sectors, the companies of which employ more than 10 workers. Agriculture workers should be receiving a daily wage of P365.
Employees in businesses in the retail services, which are employing fewer than 10, should be paid P355 each after the wage increase.
The next tranche of P26 will be applied to the payroll of the workers by February next year.
The new Wage Order RB XI-20 was issued on June 26, or about 20 days after the regional wage board conducted public hearings and consultations in Davao City, Digos City, Mati City, Panabo City, Island Garden City of Samal, Tagum City, Compostela Valley, Davao del Norte, Davao Occidental, Davao Oriental and Davao del Sur.
The wage board said its public hearings and consultations corroborated the study it conducted on the wage profile of workers in the region, which necessitated a new round of wage increase “to restore lost purchasing power of minimum-wage earners in Davao region for them to cope with the rising cost of living.”
It said the implementation of the two-tiered wage increase system was based on the poverty threshold “as the floor wage and productivity-based scheme for the second tier as necessary to raise the lowest statutory wage rate in the region to a level above the poverty threshold.”
The RTWPB said, however, that its prescribed wage hike would not impair the productivity and viability of business and industries in the region.
“Consistent with the government’s policy of achieving a higher level of productivity to preserve and generate jobs, and to augment the income of workers, there is a need to build the capacity of business enterprises to be competitive through productivity improvement and gainsharing programs.”
The board is encouraging businesses “to adopt productivity improvement schemes such as time and motion studies, good housekeeping, quality circles, labor-management cooperation as well as implement gainsharing programs.”
The new wage rates would not cover domestic helpers, or kasambahay, whose minimum-wage requirement has been set by the Batas Kasambahay (Republic Act 10361). Workers of establishments registered under the Barangay Micro Business Enterprises (BMBE) law and the Go Negosyo Act of 2013 are also not covered by the wage hikes.
However, the Davao City Chamber of Commerce and Industry (DCCI) has warned on the impact of the wage increase on the micro-, small- and medium-scale enterprises (MSMEs) as the city government is also implementing new rates in real estate and business taxes.
“I don’t know how the [MSMEs], which comprise about 99 percent of all registered businesses in Davao, can cope with these increases,” DCCCI President Arturo Milan said.
Milan said he hopes the increase, which is about 16 percent of the previous wage level, “even in tranches, would not result to business closure of micro and small businesses, or retrenchment of their
employees.”
“I personally feel this is just too high, not to mention the local business taxes just increased by 10 percent, plus the impact of the [first package of the new tax law] to their businesses,” he added.