P15 wage hike in Metro Manila

THE Regional Tripartite Wages and Productivity Board has approved a P15 daily wage increase for minimum wage earners in Metro Manila, the Labor department announced on Wednesday.

From P466, a daily wage earner in the private sector would be mandated by law to earn P481 starting April 15 or 15 days after a copy of the wage order is published.

Labor Secretary Rosalinda Dimapilis-Baldoz, who also heads the National Wages and Productivity Commission, said the new pay raise would benefit over half-a-million minimum wage earners in Metro Manila or National capital region (NCR).

This is the 19th such increase in minimum wage since Republic Act 6727, or The Wage Rationalization Act, became a law on June 9, 1989, and the fifth such minimum wage pay hike under the administration of President Benigno Aquino 3rd.

Prior to the new wage order, the NCR Wage Board had received two petitions for an across-the-board daily wage increase.

The first petition was filed by the Association of Minimum Wage Earners and Advocates last November 28 seeking a P146.80 across-the-board daily wage increase, while the second petition was filed by the Trade Union Congress of the Philippines (TUCP) on March 6 that sought a P136 across- the-board daily wage raise.

The Wage Board conducted three public consultations with the labor sector (January 29), with employers (February 10) and with the government sector (February 17). It also conducted a public hearing on March 6.

“Unfortunately, the [Wage Board] is not mandated to set across-the-board wage increases. Our mandate is to set minimum wages,” it said.

In its petition for a P136 increase, the TUCP said the real value of the peso has been eroded by 35 percent because of a variety of inflationary factors, including consumer price index, tuition light-rail fare hike and the impending water and electricity rate increases.

“The real value of the current P466 minimum wage is P299 only. It cannot sustain the needs of a family. As a result, many employed workers fall through the cracks and join the growing ranks of the working poor. Thus, we are asking the board to give a living minimum wage. We particularly appeal to employers to grant our petition,” TUCP spokesman Alan Tanjusay said.

Malacañang defended the wage increase amid criticisms that the amount was still not enough for workers and their families to live decently.

Palace deputy spokesman Abigail Valte said the amount was reached after consultations were held. According to her, the interests of workers were balanced with those of employers.

“Traditionally, if you look at the positions of labor groups vis-à-vis employers groups when it comes to a wage hike, they’ve never been on the same plane or at least on the same level. The job of the Wage Board is to determine what can be given that will also not be detrimental to employers. Meaning, if you give too high, this is one of the considerations of Wage Board and they tell you as much, that if you give too high an increase, the employers will not be able to absorb it,” Valte told reporters in a news briefing.

“So they also check what amount can be a good compromise between requests of labor groups as well as employers. That brings the total wage in NCR to P481, if I am not mistaken, and it’s good still. Some will call it not enough or not sufficient but it’s still something to be given, something in addition to what they are already getting. I believe it will be implemented in April, if I’m not mistaken,” she said.
The TUCP said workers have not been granted a real wage increase since 1989.
“What we have now is a tale of two Philippines, the story of how the upper 20 percent or the privileged few benefit from economic development and the story of the workers who toil everyday just to afford food if they are lucky enough to have regular jobs,” it added.
The TUCP said it was not asking for lavish increase but only a modest share from gains of the booming economy, which, it noted, are only enjoyed by a few rich families.
It added that the P136 across-the-board and region-wide daily increase was essential for workers to cope with increasing prices of commodities and cost of living, and meet the basic needs of the workers’ families even if only partly.

Labor Director for NCR Alex Avila, who heads the NCR Wage Board, said they took into consideration several factors, including erosion in the minimum wage; inflation rate; possible impact of the minimum wage adjustment on prices of goods and services, as well as on employment; movements in the consumer price index; current economic condition in the region; employers’ ability to pay; and results of continuing studies, sectoral consultations and public hearings.

“The decision of the [NCR Wage Board] to adjust the minimum wage was consistent with the government’s policy of granting regular, moderate and predictable minimum wage adjustments, taking into consideration the needs of workers and their families, as well as the need to maintain stability in the business environment within the framework of the two-tiered wage system reform which Secretary Baldoz has initiated in 2012 and which we accelerate to implement,” Avila added.

He said the P15 increase in the minimum wage will directly benefit 587,000 minimum wage earners who also would continue to be exempted from paying income tax on their wage and on their hazard pay, holiday pay, night shift differential and overtime pay.

“The take-home pay of our minimum wage earners will increase to P492.57 per day, or by 3.2 percent because of the wage hike, compared to the current P477.03 per day. They will also enjoy a higher 13th month pay and increased social security coverage,” Avila added.
“On the part of the employers, their effective labor cost per employee working six days a week will also increase by 3.2 percent, or P565.54 per day, compared to the current P547.87 per day,” he said.

Avila expressed confidence that like in the past year, employers will be able to bear the cost of the increase without hampering their viability for growth and expansion and, therefore, their ability to sustain employment creation.

“In January 2014, when the second tranche of the minimum wage increase consisting of the integration into the basic minimum wage of the P15 of a P30 COLA [cost of living allowance] granted by the RTWPB [Regional Tripartite Wage Productivity Board]-NCR in October 2013 took effect, employment was at 88 percent, unemployment was at 11.2 percent, and underemployment was at 12.1 percent. Today, employment in the NCR is at 90.7 percent, unemployment is at 9.3 percent and underemployment is at only 8.3 percent. So, we see that this significant improvements in these economic indicators will not be affected by the new minimum wage order, but instead continue until the end of the year and beyond, barring any glitches in the horizon,” he explained.

Avila said with the increase, the Wage Board was able to maintain the near-to-the ideal ratio of the minimum wage to average wage, which is 40 to 70 percent, at 75 percent, down from 80 percent when the Aquino administration came to office in 2010.

“The applicable minimum wage-to-average wage ratio for the country is not too close, to allow for bipartite approaches and flexibility in plant-level negotiations for further benefits,” he added.

In this latest minimum wage pay hike, Avila pointed to another bright note: removal from the list of establishments that may apply for exemption from the wage order, in accordance with rules and regulations and following compliance with documentation and other requirements, of establishments whose total assets—including those arising from loans, but exclusive of the land on which the establishments’ offices, plants and equipment are located—are not more than P3 million.

“They are no longer included in the list of establishments that may apply for one year exemption. Only distressed establishments, retail/service establishments regularly employing not more than 10 workers; and establishments adversely affected by natural calamities may apply for exemption and as determined by the Wage Board,” he said. - by WILLIAM B. DEPASUPIL AND CATHERINE S. VALENTE REPORTERS WITH PNA The Manila Times

P15 wage hike for Metro Manila workers ‘insulting’

Labor groups expressed dismay over the P15 wage increase for Metro Manila workers approved by the wage board on Tuesday.

In separate statements, two of the country’s biggest labor groups said the P15 wage hike for Metro Manila workers is “insulting” and “disrespectful.”

The Kilusang Mayo Uno said the P15 wage hike approved by the Metro Manila wage board for is nil compared to what workers need to cope with the cost of day-to-day living.

The approved wage increase is “meager” and “insulting” to the country’s workers and will not stop protests against the government.

“If [President] Aquino thinks this wage hike will weaken workers’ protests calling for his resignation, then he is sorely mistaken. This meager wage hike is insulting to workers and does not address the government’s and big capitalists’ attacks against the minimum wage,” he said.

The Trade Union Congress of the Philippines (TUCP)– Nagkaisa, on the other hand, said the wage increase is unacceptable.

TUCP Spokesman Alan Tanjusay said Filipino workers who continue to contribute to improve and sustain the country’s high economic growth under the Aquino administration for so many years deserve more than a P15 wage increase. - Jonathan L. Mayuga / BusinessMirror

P15 umento sa minimum wage sa Metro Manila, ikinadismaya ng TUCP (video)

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NCR starts round of floor wage hike

THE NATIONAL Capital Region (NCR) has kicked off a fresh round of raise for private sector minimum wage earners nationwide, with those in Metro Manila getting P15 more starting next month on top of current pay, the Department of Labor and Employment (DoLE) announced yesterday.

Business leaders yesterday were cautious towards the development, citing the need to preserve whatever edge the country still has over its peers in attracting investors, while a spokesman of the country’s biggest labor group described the approved amount as “revolting” as it widens the gap between the rich and the poor.

And while the country’s capital typically leads other regions in raising daily minimum wage, a ranking central bank official said the latest round should not stoke inflation beyond expectations and, hence, will not in itself warrant a change in monetary policy.

A DoLE statement yesterday said Alex V. Avila, chairman of NCR’s Regional Tripartite Wages and Productivity Board (RTWPB), had reported to Labor and Employment Secretary Rosalinda D. Baldoz that “RTWPB-NCR has approved a resolution granting a P15 increase in the daily basic minimum wage and continuing a P15 Cost of Living Allowance (CoLA) in effect since January 2014.”

The latest raise will bring minimum wage in Metro Manila to P444 for workers in the agricultural sector and to P481 for those in non-agriculture businesses.

The order mandating the latest increase will take effect some time next month, 15 days after publication, Mr. Avila said, adding that the National Wages and Productivity Commission is expected to affirm the decision this week. It is the fifth wage hike since the Aquino administration took office.

“The decision of the RTWPB-NCR to adjust the minimum wage was consistent with the government’s policy of granting regular, moderate, and predictable minimum wage adjustments, taking into consideration the needs of workers and their families, as well as the need to maintain stability in the business environment...” Mr. Avila said in the DoLE statement.

Metro Manila’s daily minimum wage was last adjusted in an order of the regional board that took effect on Oct. 4, 2013, involving a P10 increase. Other regions followed suit.

This year’s pay increase will directly benefit 587,000 workers, Mr. Avila added, clarifying that the wage order applies to minimum wage earners only.

But while DoLE estimates that the new order will raise employers’ “effective labor cost per employee working six days a week by 3.2%,” a group of personnel managers said cost will necessarily rise across employee segments.

“Setting minimum wages is actually not a good idea... It creates undue pressure and sets a bad precedent,” Noel D. Baliscas of the People Management Association of the Philippines said by phone, explaining it pushes employers to adjust other salaries “to maintain seniority in terms of nature of work or years of service.”

“Distressed” establishments, retail and other service businesses regularly employing up to 10 workers, and those affected by natural calamities may apply for exemption for a year from coverage of the new wage order.

DoLE said in its statement that the latest decision “took into through consideration several factors, including erosion in minimum wage; inflation rate; possible impact of the minimum wage adjustment on prices of goods and services as well as on employment... the current economic condition in the region; employers’ ability to pay; and results of continuing studies, sectoral consultations and public hearings.”

Mr. Avila said that the latest increase brings minimum wage-average wage ratio to 75%, close to an “ideal” level of 40-70%, down from 80% when the current administration took office in mid-2010. “The applicable minimum wage-average wage ratio for the country is not too close to allow for bipartite approaches and flexibility in plant level negotiations for further benefits,” he said.

The increase stemmed from two petitions: one by the Trade Union Congress of the Philippines (TUCP)-Nagkaisa faction that sought a P136 across-the-board increase, and another by the Association of Minimum Wage Earners and Advocates that asked for a P734 increase to be implemented in equal tranches of P146.80 each for five straight years. Both groups cited rising utility costs and higher Metro Manila railway fares.

Vicente R. Leogardo, Jr., who represents the Employers Confederation of the Philippines in NCR’s wage board, said the P15 increase strikes a balance between employer and worker interests.

“What I can say... as employer representative in the wage board is that the increase was tied to the erosion of P19.11 as of February,” Mr. Leogardo said in a text message. “We consider the increase as fair and equitable to both labor and employers under prevailing circumstances.”

Another business group said the government should do away with yearly wage increases to keep the country’s edge in terms of labor costs over its peers.

“That would be an additional burden, considering the ASEAN Economic Community is coming up,” Alfredo M. Yao, president of the Philippine Chamber of Commerce, Inc., said in a phone interview, referring to the Association of Southeast Asian Nations.

“After this, salary increases should not be yearly, nor legislated (which would be across the board, not just for minimum wage). As things stand, our salaries are already somewhat higher than those of our neighbors.”

But TUCP-Nagkaisa Spokesperson Alan A. Tanjusay described the increase as “unacceptable.”

“This amount is revolting. Rather than closing the gap between rich and poor, government officials in the board have further widened the gaping inequality among Filipinos -- between a few elite and a famished majority who live to survive by the day,” Mr. Tanjusay said in a statement sent shortly after the wage board’s announcement.

“We dare DoLE, DTI, and NEDA to show the formula they used as basis for the new wage order and subject it to healthy discussion rather than allow their silence to create a conclusion that the amount was taken out of thin air,” he added, referring to the Department of Trade and Industry and the National Economic and Development Authority.

ANTICIPATED
Metro Manila’s approved increase in floor wage is not expected to stoke inflation and nor, by itself, alter the neutral stance of the Bangko Sentral ng Pilipinas (BSP) on monetary policy, a senior central bank official said yesterday.

“We have already anticipated that (wage hike) and incorporated its impact on our latest forecasts,” BSP Deputy Governor Diwa C. Guinigundo said in a text message.

The BSP expects the rise in prices of widely used goods to settle within 2-4% this year and next, with average forecasts of 2.3% in 2015 and 2.5% in 2016.

Asked if the pay raise will affect the neutral stance of the Monetary Board when it meets on March 26, the BSP official replied: “It would have if it is not anticipated and not considered in the forecast. So whatever monetary policy stance the board will decide on would have already considered its impact on future inflation.” -- By Melissa Luz T. Lopez, Reporter with Daryll Edisonn D. Saclag BusinessWorld