Labor group pushes for wage increase amid higher prices

Aika Rey

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Labor group pushes for wage increase amid higher prices

Maria Tan

Partido Manggagawa says a majority of wage earners 'gained nothing' from the tax reform law and ended up 'devastatingly hit' by inflation

MANILA, Philippines – Labor group Partido Manggagawa is calling for a wage increase citing the inflationary impact of the tax reform law.

In a statement on Friday, May 25, Rene Magtubo, Partido Manggagawa president, said that the effect of inflation warrants a wage increase even without filing petitions or waiting for the wage orders to lapse.

“[T]he regional wage boards need not wait a year to lapse from their last issued wage orders before they can conduct public hearings on wage petitions. In fact, they can even act motu propio on this issue on the basis of a supervening event like this one,” Magtubo said on Friday.

A motu propio is an official act taken without formal request from another party. Magtubo said a majority of wage earners “gained nothing” from the tax reform law and ended up “devastatingly hit” by inflation.

Magtubo added that the wage hike would help recover the lost purchasing power due to the Tax Reform For Acceleration and Inclusion (TRAIN) law.

“Mr President, either you stop the TRAIN or let the poor bleed some more,” he said.

Inflation hit a 5-year high at 4.5% in April 2018 – 1.1 points higher than the January 2018 figures when the tax reform law was passed. The government’s inflation target range for 2018 is between 2% and 4%.

Amid higher prices, economic managers earlier said that suspending the tax reform law would only do “more harm than good.”

National minimum wage

Magtubo said the wage hike, if granted, would “not rectify” the structural defects in the country’s wage-setting mechanism.

“In other words, while a wage hike is an immediate concern for workers now due to the effects of TRAIN, reforming the existing wage policy has long been a necessity demanded by labor under different regimes,” he said.

Magtubo said that the government has yet to abolish the provincial rates system which sets minimum wages in the provinces lower than the rate in Metro Manila.

Based on Republic Act No 6727 or the Wage Rationalization Act, each region in the Philippines has a unique minimum wage set by the Regional Tripartite Wages and Productivity Boards (RTWPBs) based on the poverty threshold, employment rate, and cost of living specific to the region.

In September 2016, Labor Secretary Silvestre Bello III said the government is considering a “national minimum wage law” which would adjust minimum salaries comparable to Metro Manila. (READ: Is it time for a national minimum wage?–

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at