‘Historic’ P85 Wage Hike For NCR Workers Announced

Starting July 19, more than 1.1 million minimum wage earners in Metro Manila will see an increase in their daily pay, after the regional wage board approved a wage adjustment of P85, the Department of Labor and Employment (DOLE) announced on Tuesday, June 30.

Labor Secretary Francis Tolentino said the wage adjustment, which he described as the largest single increase in Metro Manila’s daily minimum wage, will be implemented in two phases under Wage Order NCR-27.

“In compliance with the directive of President Marcos, we are increasing the wages of all workers in Metro Manila. Around 1.1 million daily wage earners will benefit from this historic P85 increase – the highest single daily wage adjustment granted to private sector workers in the region,” Tolentino said during a public consultation with market vendors and construction workers in Malabon City.

The first tranche of P60 will take effect on July 19, while the remaining P25 will be granted on Jan. 20, 2027.

Under the wage order, the daily minimum wage for workers in the non-agriculture sector will increase to P780, while workers in agriculture, service and retail establishments employing 15 workers or fewer and manufacturing firms with fewer than 10 regular employees will receive P743 per day upon full implementation.

Tolentino urged the employers to comply with the new wage order, saying the increase would help minimum wage earners and their families cope with rising expenses.

The National Wages and Productivity Commission and the National Capital Region wage board, DOLE said, will conduct information campaigns to assist employers in complying with the order and addressing possible wage distortions.

The department added that regional wage boards in other parts of the country are continuing reviews and consultations for boards to begin assessments within 60 days before the anniversary of their latest wage orders.

Great, but…

In an interview with The Philippine STAR, Federation of Free Workers president Sonny Matula welcomed the new wage order, but said the increase should have been granted in full rather than in two installments.

“Any increase in workers’ wages is good news and a step in the right direction. That said, we wish the increase had been granted in full instead of being split into two tranches. Workers do not pay for food, rent, transportation or electricity in installments. Their daily needs are immediate, and so should wage relief be,” Matula said.

“Even with the total P85 increase, it still falls short of the P200 recovery wage consistently sought by the labor sector to restore the purchasing power that workers have lost due to years of rising prices and inflation,” he added

Asked by The STAR what action the government and regional wage boards should take following the NCR wage increase, Matula said the adjustment should not underscore existing disparities in the country’s regional wage system.

“The NCR wage increase should not become another reminder of how unequal our wage system has become,” he said.

Matula urged the government, particularly its economic managers, to support pending measures in Congress seeking a P200 nationwide wage increase, arguing that lawmakers have the authority to legislate wages when national interest and social justice require it.

He also called on regional wage boards to act more proactively on wage petitions, saying the Labor Code empowers them to adjust wages whenever economic conditions warrant.

“The present regional wage system has resulted in workers in the provinces receiving substantially lower wages simply because of where they work. That disparity has become increasingly difficult to justify,” Matula said.

“A Filipino worker’s dignity should not depend on his or her ZIP code. Social justice does not stop at the boundaries of Metro Manila,” he added.

Businesses to comply

Business groups will comply with the approved P85 wage hike for Metro Manila, but they flagged risks to employment and prices amid cost pressures.

“While businesses will respect and comply with the new wage order, many MSMEs (micro, small and medium enterprises) will face additional cost pressures that could affect hiring, expansion and pricing decisions,” Management Association of the Philippines (MAP) president Donald Lim said in a Viber message on Tuesday. 

Employers Confederation of the Philippines president Sergio Ortiz-Luis Jr. said in a telephone interview that their members will also follow the approved wage increase, even if they dissented.

Employers are represented in the regional wage boards. 

Ortiz-Luis said that the wage increase would benefit only a few and leave behind many workers in the informal sector. 

He also said that the wage increase may impact employment as businesses already contending with higher costs may be forced to let go of some workers.

The wage increase may also push up prices.

“Businesses will add the higher cost to their prices,” Ortiz-Luis said.

While MAP recognizes the need to help workers cope with rising living costs, Lim said wage hikes are not seen as a long-term solution.

Lim also said that lasting improvements in workers’ incomes must come from higher productivity, stronger economic growth and better quality jobs.

“The focus should now be on helping both workers and businesses by improving the ease of doing business, lowering logistics and energy costs, investing in skills and technology and creating an environment where wage growth is driven by productivity rather than mandated increases alone,” Lim said.

‘Balance’

The government defended the P85 wage hike, saying there is a need to balance the interests of workers and employers, majority of whom are small businesses.

“We recognize the plight of our workers, but we also need to balance this with the employers’ ability to pay their workers,” Presidential Communications Undersecretary Claire Castro said at a press briefing.

Castro added that businesses may offset higher salaries by reducing their staff.

She brushed aside criticisms that the wage increase was announced amid a large rally organized by Iglesia Ni Cristo on Tuesday, which denounced the looming filing of charges against one of its members, Sen. Rodante Marcoleta.

“If this was announced today, it means it was drafted way back. So, it means this was studied a month ago,” Castro said.

Not enough

Members of the House of Representatives, including party-list Trade Union Congress of the Philippines, welcomed the P85 daily wage increase for minimum wage workers, but claimed this is still far from enough as they pushed for a P200 legislated wage hike.

“The increase is not only grossly inadequate in the face of the collapse in workers’ purchasing power, but will even be released in tranches, forcing workers to wait months before receiving the full amount,” the labor organization stressed.

Kamanggagawa Partylist Rep. Eli San Fernando slammed the two-part rollout.

“You’re already just giving change, you even made it into installments? So cheap,” San Fernando said, arguing that inflation has already wiped out P100 to P200 from the peso’s daily purchasing power.

Conversely, Senior Citizens Party-list Rep. Rodolfo Ordanes defended the order as a “welcome calibrated measure.”

Ordanes argued the “hefty” increase will help workers cope with inflation and boost retirement benefits for seniors still in the workforce.

San Fernando called for their outright abolition in favor of a National Minimum Wage, while Ordanes pushed for restructuring them into regional clusters with higher pay tiers for licensed professionals.

Tolentino’s announcement came out as the House committee on labor and employment held its first hearing on the legislated P200 nationwide wage increase, where members agreed to continue deliberations after the July 27 State of the Nation Address.

This is to finalize a substitute bill for committee approval and eventual plenary consideration.

As far as Akbayan party-list Rep. Perci Cendaña is concerned, this wage hike should be nationwide. 

“If P85 can be granted to the workers here in Manila, the same should be granted to all workers across all regions. Filipino workers face the same price increases where ever they may be. Yes, this is an increase. But this is still not enough,” Cendaña reiterated.

‘Insult’

The P85 wage increase is an insult to workers, the Kilusang Mayo Uno said on Tuesday.

Mary Ann Castillo, KMU secretary general, said the P85 wage hike for workers in Metro Manila is a far cry from the P780 to P1,305 they are asking from the government.

“It’s a small quantity being given to workers. All the smaller in scope if for the NCR only, while millions of workers in the country are affected by a crisis that the government is not responding to,” Castillo said in a statement.

Meanwhile, the Alliance of Concerned Teachers (ACT) Philippines said the daily wage increase only underscores the growing wage crisis confronting Filipino workers.

Ruby Bernardo, ACT chairperson, said teachers and workers continue to suffer from depressed wages, rising costs of living, chronic understaffing and deteriorating working conditions.

“The Marcos administration entered office with promises of better salaries for teachers, reduced administrative workload, fair compensation for overtime and teaching overload and stronger government support for public education. Four years later, teachers remain overworked, underpaid and forced to shoulder the consequences of government’s chronic neglect of the education sector,” Bernardo said.

She added that the P85 increase remains grossly inadequate against the relentless rise in the prices of food, transportation, housing, utilities, fuel and other basic necessities.

“Workers deserve living wages – not piecemeal adjustments that are immediately wiped out by inflation,” Bernardo added. – With Louella Desiderio, Helen Flores, Delon Porcalla, Neil Jayson Servallos, Emmanuel Tupas, Bella Cariaso