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MANILA, Philippines – Labor Secretary Silvestre Bello III on Monday, May 28, said the Department of Labor and Employment (DOLE) will study a possible increase in minimum wage, amid increasing prices of goods.
Bello said he had instructed wage boards to closely monitor the increasing prices of basic commodities, which is partly attributed to the newly-implemented tax reform law.
“As early as February this year, I have instructed the boards to closely monitor the price of basic commodities, especially the impact of TRAIN (Tax Reform for Acceleration and Inclusion), in close consultation with agencies,” Bello said.
“The boards have been monitoring prices in their respective regions and based on their reports… [some] prices have been fluctuating since January this year,” he added.
If this situation persists, labor officials said a minimum wage increase across the country could be implemented by August or September this year.
Bello added that cash subsidies for Filipino minimum wage earners are also being studied by the department. But he said the proposed P500 subsidy is “too much.”
“‘Yung subsidy from government, pinag-aaralan din namin ‘yan…. Puwede siguro ako bumalik kay Secretary [Carlos] Dominguez ulit, pero hindi naman siguro ‘yung gano’n kalaki na P500, baka puwedeng subsidy of P100 to P200 a month,” Bello said.
(We are also studying giving subsidies from the government…. I can probably discuss that again with Secretary Dominguez, but not as big as P500, maybe a subsidy of P100 to P200 a month.)
Amid higher prices, economic managers earlier said suspending the tax reform law would only do “more harm than good.”
Finance Assistant Secretary Paola Alvarez defended TRAIN on Monday, saying it has so far only contributed 0.4 percentage points to inflation.
She said higher global oil prices and the weakening of the Philippine peso against the United States dollar also contributed to the country’s higher inflation rate.
Presidential Spokesperson Harry Roque said on Monday that President Rodrigo Duterte ordered wage boards to study a possible increase in minimum wage.
“Normally, there should be a petition, but what the President did was to order them, don’t wait for a petition, to study on their own if there is [a] need to increase minimum wage,” Roque said.
“While the salary is being raised, many may also lose their jobs. So it is important to study this carefully,” he added.
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.
Under the law, wage orders determine how much the minimum wage would be within a period of 12 months.
Currently, Central Luzon, Western Visayas, Central Visayas, Eastern Visayas, the Zamboanga Peninsula, and the Davao Region have expiring wage orders and are in the process of issuing new minimum wage orders in their jurisdictions.
But other regions can also issue new wage orders, in consultation with the National Prevailing Wage Center (NPWC), on the basis of a supervening event such as rising prices of goods, oil, and fares among others.
However, labor groups said leaving the regional boards to determine the minimum wage would only leave workers still “unsatisfied.” (READ: Labor group pushes for wage increase amid higher prices)
“Regional wage boards heavily base their determination for the increase in minimum wage rates on the employers’ capacity to pay instead of the prevailing cost of living and living wage,” Rene Magtubo, Partido Manggagawa chairperson, said on Monday.
National minimum wage
The Makabayan bloc in the House of Representatives also filed a bill seeking a P750 daily national minimum wage for workers on Monday, which would also abolish RTWPBs.
Bong Labog of Kilusang Mayo Uno said the measure would provide “immediate relief” from high commodity prices.
“Passing the [national minimum wage] bill would increase workers’ wages to P750 nationwide, which would serve as an immediate relief to workers and our families amidst the unabated price increases of basic goods and services brought about by the Duterte administration’s TRAIN law,” Labog said on Monday.
Bello said implementing a national minimum wage is “beyond [DOLE’s] jurisdiction,” but added that the measure should be studied.
“We need to undergo a very in-depth study on the economics of the measure. There are a lot of factors needed to be taken into account – the needs of the workers and the capacity of the employers. We need to review this,” he said.
Bello added that if the study shows enough justification for a national minimum wage, they will go to Congress to make a recommendation.
But Bello underscored the need for regional wage boards as “they know the needs on the ground.”
“The reason why we have [RTWPBs] is because the provinces experience different conditions. They have varying distinctive conditions,” he said.
Back in September 2016, Bello 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?) – with reports from Pia Ranada/Rappler.com