Home Economy Board approves P35 NCR wage hike

Board approves P35 NCR wage hike

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By Chloe Mari A. Hufana

THE REGIONAL Tripartite Wages and Productivity Board (RTWPB) has approved a P35 minimum wage hike for workers in the National Capital Region (NCR), which will take effect on July 17.

According to Wage Order No. NCR-25, the minimum daily wage for nonagricultural workers in the region will be increased to P645.

For workers in agriculture and service/retail establishments employing 15 workers or fewer, daily wages will be raised to P608 from P573.

Workers in manufacturing establishments regularly employing fewer than 10 will also receive a minimum daily wage of P608.

The RTWPB-NCR approved the order on June 27, but a copy was released only on Monday.

“The wage order is to take effect after 15 days from its publication, or on July 17, 2024 which is exactly a day after the anniversary of the preceding wage order,” the Department of Labor and Employment (DoLE) said in a statement.

A P40 minimum wage increase was implemented in NCR on July 16, 2023.

The DoLE said the new wage rates are about 5.7% higher than the prevailing daily minimum wage rates in the region.

“(The new rates) remain above the latest regional poverty threshold for a family of five. These likewise result in a comparable 5% increase in wage-related benefits covering 13th month pay, service incentive leave, and social security benefits,” it said.

The wage order will directly impact 988,243 minimum wage earners in the capital region, DoLE said.

About 1.7 million full-time wage and salary workers that earn above minimum wage “may also indirectly benefit as a result of upward adjustments at the enterprise level arising from the correction of wage distortion,” it added.

Retail and service establishments with not more than 10 regular workers and enterprises affected by natural calamities or disasters can apply for exemption from the wage hike. Barangay Micro Business Enterprise are also not covered by the minimum wage law.

Employers Confederation of the Philippines (ECoP) Governor Arturo “Butch” C. Guerrero III told BusinessWorld via iMessage that the P35 wage increase is a “relief” for employers.

“This is a relief compared with the P750 wage hike per day the labor groups are recommending to the wage board and with the P150 per day additional to [Senator Juan Miguel F.] Zubiri’s legislated wage increase in the Senate,” he said.

Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon in a phone call with BusinessWorld said the P35 wage hike is “very reasonable.”

“[A] P35 increase per day is a win-win [because] this is more affordable for the micro, small, and medium enterprises, for the small business establishment to continue doing their business,” he said. “At the same time, this also indirectly mitigates inflation.”

The Philippines has been battling persistent inflation, as the cost of food, transport and utilities continue to rise.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort warned about second-round inflation effects arising from the wage hike.

“Some pickup in inflation through higher prices of affected goods or services, or the so-called second-round inflation effects, as the wage increase is around +5.7% that could [be] passed by some businesses and industries in terms of higher prices of their products by a similar extent to reflect the increase in labor, production and input costs,” he said in a Viber message to BusinessWorld.

However, he noted some companies might absorb the higher costs, which will result in smaller profit margins.

Mr. Ricafort said the P35 increase in wages would still “somewhat help” workers cope with expenses.

However, labor groups were not happy with the RTWPB-NCR’s order, saying it was not enough to help workers cope with the rising cost of living.

“The P35 wage hike in Metro Manila is not only inadequate but also seems like a tactic to distract workers from their escalating push for a P150 daily wage increase through legislation,” Federation of Free Workers President Jose Sonny G. Matula said in a statement.

“This highly insufficient increase, however, will only strengthen our resolve to pursue a legislated wage hike. The current economic conditions demand a comprehensive solution that addresses the dire financial realities workers face nationwide,” he added.

Trade Union Congress of the Philippines (TUCP) Vice-President Luis Manuel C. Corral said in a statement that the NCR wage board “opted to protect business profits rather than the bigger societal purpose of the wage increase.”

“As TUCP has repeatedly pointed out, the need to elevate the daily wage above the poverty threshold to afford a family of five at least one nutritious meal a day is inextricably linked to addressing the growing problem of stunting Filipino children due to persistent poverty and inequality,” he said.

The National Wage Coalition, which had sought a wage hike of not less than P150, said the P35 wage hike shows a “heartless disregard for the economic crises faced by our workers and families.”

“Our minimum wages do not amount to liveable wages… The P35 increase does not even amount to measly change; it is not even sufficient for a kilo of rice,” it said in a statement.

The NCR wage board had received several wage petitions from labor groups ranging from P597 to P750.

Unity for Wage Increase Now sought a P597 increase in daily wages, while four hospital employee associations and the Pasig Labor Alliance for Democracy and Development sought a P750 hike.

In February, the Senate approved on third and final reading a P100 across-the-board minimum wage increase for workers in the private sector. The House of Representatives has yet to pass similar legislation.

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