It’s getting harder for factory worker Margie Grefaldo to keep giving her family the nutrition they need.

In her usual grocery runs, she would budget P150 for chicken. But as the price of chicken increased faster than her salary could keep up, she would still spend the same P150, receiving less chicken than before.

“We must always eat healthy. I avoid feeding them canned food, because they have preservatives. You’re more prone to sickness, and your immunity weakens. We only eat that when we have nothing else,” the 51-year-old mother of three said in Filipino.

Grefaldo, who works in a paper mill in Bulacan, earns P530 daily, slightly more than the minimum daily wage of up to P500 for non-agriculture workers in Central Luzon.

In the current wage system, regional wage boards determine minimum wages based on local economic contexts – a worker like Grefaldo in neighboring Metro Manila would earn P610 at a minimum. But because her province is in such close proximity to the capital, she doesn’t feel like the cost of living is any different. This makes her feel like she is earning less than the minimum.

The months-long push and pull between workers, employers, and lawmakers on legislating an across-the-board increase for minimum wage earners in the Philippines remains ongoing in Congress. While the version of the bill seeking a P100 daily increase has passed the Senate, discussions continue at the committee level of the House of Representatives. 

In every hearing, arguments are mostly the same – workers say they need the increase to cope with the rising costs of goods, and employers’ associations say they cannot afford to increase their salaries.

Labor groups have also said that it is no longer a discussion of whether there should be an increase, but how much. The P100 version at the Senate is the lowest among all the proposals, with the highest at P750. 

The 2nd regular session of Congress has adjourned sine die, but all eyes will be on the House labor committee to make a decision once lawmakers convene again in July.

‘Survival rate’

Grefaldo, vice president of an 800-member group called the Association of Minimum Wage Earners and Advocates (AMWEA), has been a factory worker for 13 years. While her salary has increased by increments over the years, she still calls them “survival rates.”

“The incremental increases from the regional wage boards do really help. But it’s never enough,” Grefaldo told Rappler after a Metro Manila wage board consultation in the Occupational Safety and Health Center on Thursday, May 23.

“This happens yearly. Even if we tell them here that our salaries are not enough, and this is what we need to live decently, they never give us the amount we ask for…. Let’s say they give us a P30 increase. Can we do anything about it? It’s still low, but we will take what we can get, especially us minimum wage earners,” she said. “That’s the reality of our government.”

It does not help that her husband earns a minimum wage as well as a delivery truck driver. Together, they earn around P5,000 weekly, but it’s just enough to afford them the things they need – healthy groceries, bills, and the school expenses of her youngest child, the only one still studying. Grefaldo skips breakfast to save money.

In her consultations with workers in AMWEA, who are also mostly factory workers, many say that they have to pawn their ATM cards for around P2,000 just to have some liquidity. In Grefaldo’s case, she comes up with ways to earn money on the side.

When she received her 13th month pay in pandemic-era 2021, she decided to use it as capital for frozen goods she sold to her community and co-workers. She would take orders while at work, and text them to her husband to come bring them when he comes to fetch her from work.

Grefaldo also came up with another entrepreneurial endeavor: buying raw peanuts, coming up with her own recipe, and selling peanut packs in their workplace canteen for P10 each. Grefaldo spoke proudly about the ways she was able to augment her income. But what came back to her for all this extra effort on top of her long working hours away from her children was also, figuratively, peanuts.

“It just makes you cry. Why? Because you have to endure it out of love for your children. You don’t want them to feel like you can’t afford to send them to school until the very end,” she said, noting her highest educational attainment was high school.

Government intervention

In his BusinessMirror column in April, former dean of the University of the Philippines Diliman’s school of labor Rene Ofreneo said that it was high time for wage increases if the Philippines wants to become a middle-class economy by 2040.

Ofreneo said a P100 or P150 increase was doable, pointing to industries in power, telecommunications, water, banking, big construction, mining, logistics, and entertainment reporting multi-billion profits. “They should share more of their earnings with the workers and with the larger society in terms of taxes. Konsiyensiya lang po (Use your conscience).”

As for the majority of business establishments that are micro, small, and medium enterprises (MSMEs), Ofreneo recommended dialogues on transitioning and support towards compliance with the increased wages, as what other Southeast Asian countries like Singapore and Malaysia are doing.

In the congressional discussions, one compromise that was brought up was providing subsidies for MSMEs that may not have the ability to comply with the increases.

Under Malaysia’s proposed Progressive Wage Policy, which is set to undergo a pilot run from June to September, eligible firms will receive a monthly incentive of RM200 (P2,494) up to RM300 (P3,741) for higher-position employees earning under RM5,000 monthly, in exchange for employers enhancing training for their employees.

Malaysia’s program was inspired by Singapore’s Progressive Wage Model, according to the Institute of Strategic and International Studies Malaysia. Singapore’s program focuses on upgrading skills of its lower-income workers, which, in turn, improve productivity and provide businesses more profit to pay their employees. 

While Singapore’s program has faced criticism for not being inclusive enough, it remains to be seen if such a program can thrive in the Philippines. While shying away from words that outwardly reject the proposed legislated wage increases, the Philippine Department of Labor and Employment (DOLE) has leaned more towards opposition, pointing to possible negative effects on the economy should an increase happen. 

Still, should Congress decide to pass a law granting an increase, the department will implement it “no matter how hard that will be,” DOLE said in a May 15 statement. The DOLE implemented a wage subsidy program during the COVID-19 pandemic.

Need for investments?

Another factor that affects workers’ wages is population. Economist Gerardo Sicat wrote in a March Philippine Star column that the Philippines has high labor supply because the country’s population is so big.

Sicat also pointed to the need for realized investments for “greater prosperity” for Filipino workers: “Modern jobs in the country are inadequate in relation to the size of the labor force because there are not enough investments in productive economic activities.”

This calls to mind the small fraction of realized investment pledges gathered by President Ferdinand Marcos Jr. in his foreign trips as of December 2023. With more foreign direct investments (FDIs) realized, would this mean higher wages for Filipino workers? According to Rappler resident economist JC Punongbayan, investments may mean more jobs, but not necessarily higher wages.

“My hunch is that the realization of foreign investments will have more of an impact on employment than wages,” he said.

“But it’s doubtful that FDIs alone will be able to provide too many jobs that can solve unemployment and underemployment. I’m also unsure if the wages for new jobs brought in by FDIs will be significantly higher than current average wages. All of these are empirical matters that need to be studied by economists thoroughly.”

Punongbayan still thinks that a legislated wage increase will help workers cope with sky-high prices, as inflation picked up again at 3.8% in April due to El Niño and the peso’s depreciation against the dollar.

Lowering prices instead?

According to the Foundation for Economic Freedom (FEF), the policy should not be to raise wages, but to lower prices of goods. FEF president Calixto Chikiamco said that the easiest way to do this is to liberalize the importation of rice, corn, fish, sugar, chicken, and pork.

Since rice is the biggest component of the average worker’s food budget, Chikiamco said, his first recommended step is cutting the tariff on rice from 35% to 10%, or removing tariffs completely.

“The government should also expand the MAV (Minimum Access Volume) quota for corn from 250,000 MT to 3 million MT, which is the estimated deficit between local production and consumption. The expansion of the MAV quota on corn will reduce the price of chicken and pork, since corn constitutes 60% of the cost of producing pork and chicken,” Chikiamco told Rappler.

But with the easing of tariffs, wouldn’t this hurt local farmers, and compromise the Philippines’ goal of achieving self-sufficiency in rice? For FEF, rice self-sufficiency is “not a desirable objective because it will be too costly.” Chikiamco pointed to the country’s archipelagic nature, lacking large wet plains suitable for rice farming – an advantage Vietnam and Thailand have.

Instead of capitalizing on rice, Chikiamco said the Philippines could focus on high-value crops like mangoes, “for which we have a comparative advantage, and use the revenue from that to import rice.”

“Singapore isn’t self-sufficient in rice but is considered the second most food secure nation in the world. The objective is income security and not rice self-sufficiency,” he said.

Social costs

Whether the Philippines decides to focus on increasing wages or lowering prices, or both, one thing is clear – Filipino workers need more purchasing power.

“My salary is too small to buy everything my child and I need. We’re able to eat healthy food, but not all the time. It hurts as a mother to not feed my daughter healthy food, give her vitamins, or buy medicine as soon as she gets sick,” said Cebu-based garment factory worker and solo parent Erlinda Baldenas, who also earns around minimum wage.

Baldenas, 46, who has spent half of her life as a factory worker, said that there have been many times her teenager spent nights eating dinner alone because of her mother’s mandatory overtime work. From leaving the house at 6 am, Baldenas would often arrive home 14 hours later. It’s a lifestyle they’ve gotten used to, but her daughter has voiced her resentment.

“She would tell me, ‘Mama, you always come home late, and you barely bring home any money. You spend so much time at the factory and you don’t even earn that much.’ I can feel her thirst for my time,” Baldenas said.

Grefaldo also feels the guilt, wishing she could have spent more time being hands-on with her children. At 51, her energy to keep working is depleting. But if given an opportunity to work abroad, she would still grab it for the sake of earning more.

“I no longer dream of becoming rich. I just want to reach a point where my children don’t have to worry about me if I become sick.” – Rappler.com

All quotes have been translated into English for brevity.

1RM = P12.47