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Labor Matters

Ten (10)-peso increase in minimum wage in Metro Manila (wage hike)

The Regional Tripartite Wage and Productivity Board of the National Capital Region (RTWPB-NCR) has approved a P10 increase in the minimum wage in Metro Manila.  The Wage Order to implement this increase in minimum wage is yet to be issued by the RTWPB-NCR.  The Wage Order will be issued 10 days from its publication and will be effective 15 days after its publication in a newspaper of general circulation.

Update: The Regional Tripartite Wages and Productivity Board has issued Wage Order No. NCR-18 effective October 4, 2013, Click Here.

The minimum wage is composed of the basic wage and cost of living allowance (COLA).  COLA is distinguished component of the minimum wage as it is NOT considered in the computation of the 13th month pay.  Currently, the minimum wage is P456 which consists of P426 basic wage and P30 COLA, effective November 1, 2012.  See Wage Order No. 17 & RMC No. 76-2012: Daily Minimum Wage Rates in the National Capital Region for the older wage order.

P10 Wage Increase in 2013

The approved increase in minimum wage by the RTWPB-NCR will have the following effect:

  • The P10 increase in minimum wage will form part of the basic wage.
  • The minimum wage, upon effectivity of the wage increase, will become P466 from the current P456.
  • P15 of the current P30 COLA will be integrated to the basic wage effective January 1, 2014.

Minimum wage earners will have a merry Christmas as the P10 wage increase will form part of the basic wage, which means that it will be considered in the computation of the 13th month pay.

Minimum wage earners will also have a happy new year as P15 of the exisiting COLA will be integrated to the basic wage which means that it will be considered in the computation of their 13th month pay for the year 2014.

But how will it be a really Merry Christmas and a Happy New Year if it is only a P10-peso increase?  This has been the lowest so far since minimum wages began being set by region in 1990.

Public Reactions to Increase in Minimum Wage

‘FAIR’ FOR BUSINESS

“This seems to be a fair decision, staying close to inflation,” said Henry J. Schumacher, vice-president for external affairs of the European Chamber of Commerce of the Philippines (ECCP). Inflation was also cited by John D. Forbes, director of the American Chamber of Commerce of the Philippines (AmCham), who also called the increase “fair.”

Both reactions were a turnaround from last month, when the Joint Foreign Chambers — of which the ECCP and AmCham are members — wrote the Metro Manila wage board to express its objection to any increase.

Inflation fell to a four-year low of 2.1% last month, bringing the year-to-date average to 2.8% — just under the Bangko Sentral ng Pilipinas’ 2013 target of 3-5%.

A ‘JOKE’

The Labor department, in announcing the increase last Friday, said the tripartite wage board had “unanimously” agreed on the P10/day adjustment. But the Trade Union Congress of the Philippines (TUCP), which is represented in the board and had asked for an P83/P85 increase, has branded the decision as a “joke.”

Alan A. Tanjusay, spokesperson of the TUCP faction that filed an P85 petition, said: “The P10/day increase is outrageous! This amount cannot even buy half a kilo of rice or take a worker to work and back home.”

“This amount is a joke, a painful joke to working class who worked so hard to improve our economy. We will definitely appeal the decision,” he said in a text message.

Read more of these reactions in Business World.

How About the Mid-income Earners?

Now, what about those earning a bit higher than the minimum, what benefits await us?  None.  The difference between the salary of a minimum wage earner and those earning a little higher than the minimum become thin.  Even us, above the minimum wage earner, are affected by inflation.  Worse is that, we are being taxed, unlike minimum wage earners.

Imagine a minimum wage earner earning P11,000+ in a month and an employee earning higher than the minimum, for example P12,000+.  The difference is just more or less P1,000.  However, minimum wage earner is not subject to income tax and withholding tax.  Now, who has the bigger take-home pay?

We just wish that when there would be increases in salaries, it’s better if it’s an across-the-board increase.


A news from ABS-CBN News was published today which reads as follows:

MANILA, Philippines – Good news for workers: The Regional Tripartite Wage and Productivity Board of the National Capital Region (RTWPB-NCR) has approved a P10 increase in the minimum wage in Metro Manila.

“The RTWPC-NCR… had unanimously made a decision to increase the minimum wage by P10.00 per day to bring the minimum wage to P466 in the National Capital Region upon the effectivity of the new wage hike,” Labor Secretary Rosalinda Baldoz said in a statement.

The RTWPB-NCR has also decided to integrate P15 of the existing P30 Cost of Living Allowance (COLA) under RTWPB-NCR Wage Order No. 17 into the basic wage effective January 1, 2014.

“This will bring the new basic wage to P451 and the new minimum wage to P466… This is the first time that the RTWPB-NCR has unanimously decided on a wage increase for workers in the national capital,” Baldoz said.

The minimum wage consists of a basic wage and COLA.

DOLE-NCR Regional Director Alex Avila, chairperson of wage board, said the new minimum wage applies to all minimum wage workers in the private sector in the NCR regardless of their position, designation, or status of employment, and irrespective of the method by which they are paid.

However, household workers, family drivers and workers of Barangay Micro Business Enterprises are not covered by the new wage order.

“Our workers’ take home pay is increased to P11,240 per month, or by 2.1 percent, compared to the current P11,005 per month. Our workers will get a bigger 13th month pay of P11,651 or an increase of about 5.9 as a result of the COLA integration,” Baldoz said.

The NCR Board will issue the Rules and Regulations implementing the Wage Order within 10 days from its publication. The new wage order shall take effect 15 days after its publication in a newspaper of general circulation.

Earlier, various workers’ groups have called for a wage hike, ranging from P83 to P125.  However, the Employers’ Confederation of the Philippines (ECOP) warned that increasing the minimum wage would result in mass layoffs and closure of companies.

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About leecpa

Orlando Calundan is a Certified Public Accountant. He has exposures in audit of financial statements of entities in various industries such as real estate, food (quick service restaurants), manufacturing, service organizations and BPOs, automotive, holding/investment companies and more. He also has exposure on internal audit engagements. http://calundan.co

Discussion

2 thoughts on “Ten (10)-peso increase in minimum wage in Metro Manila (wage hike)

  1. HI, do you have the complete implementing rules for NCR-18 (normally has 25 pages and up). So I can be able to implement it. What we need is the complete implementing rules, with effective date of increase in indicated in it.

    For your assistance, please.

    Thank you.

    Posted by Ciara Sarabia | September 30, 2013, 3:46 am

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