₱125 wage hike proposal up for review

Metro Manila (CNN Philippines) — The Department of Labor and Employment (DOLE) has ordered the review of the ₱125 across-the-board wage hike proposal amid plans to present it for legislative approval.

Progressive groups have consistently lobbied for a wage increase  since the 13th Congress in 2006.

"You are hereby instructed to convene your respective Regional Tripartite Wages and Productivity Boards (RTWPBs) to consult and generate consensus or comments on the anticipated filing of legislative measures proposing a PhP 125.00 across-the-board increase in the wages of workers in the private sector in the 17th Congress," a DOLE memorandum dated last Friday said.

The RTWPBs are then required to submit their consolidated findings on or before September 14.

"Kailangan mo kasing ireview kung magkano at saka sino [You need to review this and identify who will be affected], across the board ba o ano [or what], and you also have to consult the management kasi  [because] they'll be the most affected by any increase in wages," Labor Secretary Silvestre Bello III told reporters in a press conference on Tuesday.

The RTWPBs are mandated by law to determine and fix the minimum wage rates and structure applicable in a particular region.

The Board is composed of the DOLE regional director, regional directors of the National Economic and Development Authority (NEDA) and Department of Trade and Industry (DTI), and two representatives each from the worker and employer sectors as members appointed by the President for a term of five years.


Labor Undersecretary Joel Maglunsod said he's in high spirits the proposal will be put into law, with the help of President Rodrigo Duterte's super majority in the Lower House.

Maglunsod, who hails from the Left, also fought for the bill's passage in the House when he was still Anakpawis representative in 2009.

"Talagang naghihirap yung mga manggagawa natin kasi yung sahod ng mga manggagawa ngayon, hindi sapat sa pangangailangan ng pamilya nila," Maglunsod said.

He explained the wage hike will not burden employers and business owners too much, as it will only cover 17 percent of corporate profits.

Manglunsod added that labor costs only cover not even a fifth of the total cost of production of firms.

"Kung titingnan mo sa [If you look at] total production costs ng isang produkto, pinakamataas na doon yung [of one product, the highest is the] 10 to 15 percent yung total labor cost," Maglunsod explained.

Not at this time

The Employers Confederation of the Philippines (ECOP) said the proposed P125 wage hike will surely discourage foreign investors from doing business in the Philippines.

"We should not start making people nervous by coming up with all kinds of other things which will complicate the environment," ECOP President Donald Dee told CNN Philippines.

Dee said any wage increase at this moment will leave a negative impression on the country's investment climate.

"At the moment our exports are down, our manufacturing data indicates that it will slowdown because of external factors," Dee explained.

He cited the example during the 1980s when successive wage increases led to the demise of the country's textile and toy industries after foreign investors transferred to China.

Dee instead urged DOLE to help create jobs and lower cost of doing business in the country.

"You have to make sure that you have enough jobs to go around then wages will automatically go up because of market demand," Dee suggested.

Compromise 'possible'

Bello admitted there is no guarantee that the target of P125 wage hike would be approved.

"It could be achieved, it could be lower than that but ang importante [what's important] is that there will be an adjustment," Bello said.

When asked if he is open to a lower amount if the proposed P125 wage hike will not be granted by the RTWPB, Maglunsod said "so be it, as long as there is substantial increase."