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Millions of Filipino minimum wage earners get pay hike this year -- Baldoz
The online news portal of TV5

MANILA – Millions of Filipino minimum daily wage earners in 11 regions of the country will get an increased minimum daily wage pay this year, Labor and Employment Secretary Rosalinda Dimapilis-Baldoz announced Friday.

Baldoz said the 11 Regional Tripartite Wage and Productivity Boards (RTWPBs) have already approved their respective new wage orders granting to minimum wage earners either in the form of basic pay or cost of living allowance (COLA).

The 11 RTWPBs are: National Capital Region (NCR), Cordillera Administrative Region (CAR), Regions 1, 2, 3, 4-A, 5, 6, 8, 12, and Autonomous Region of Muslim Mindanao (ARMM).

Two-tiered wage system

Baldoz said that the new wage orders took into consideration the policy objectives of the two-tiered wage system of ensuring a more effective protection to vulnerable workers and reducing inequality of wage through genuine floor wage, while encouraging productivity growth in the region.

The two-tiered wage system, a ground-breaking wage reform initiated by Secretary Baldoz, consists of a fixed “floor wage, or entry–level wage, for new entrants and low-skilled workers, and a flexible wage above the floor based on workers productivity and industry, or enterprise performance, which may be negotiated between the employer and the workers.

“This new wage fixing tool is beneficial to both enterprises and workers, as it will encourage worker productivity, good performance and competitiveness favorable to business,” said Baldoz.

She added that under the new wage mechanism, the new floor wage was determined by the RTWPB by taking into consideration the current poverty threshold, average wage, and socioeconomic conditions in the region, such as erosion in minimum wage; increase in the prices of petroleum products and basic commodities; and increase in public transport fare and toll fees.

The second tier under the new wage order provided for a productivity based pay (PBP) above the floor wage to recognize and pay the monetary value of workers’ productivity/performance contribution in the overall business profitability and growth.

Baldoz noted that the new wage orders already contain the features of the two-tier wage system, some of which were as follows: (1) upward adjustments in the minimum wage rates in the regions whose minimum wage are below the poverty threshold featured in the wage order of Regions 3 and 4-A; (2) prudent adjustments (wage orders of CAR, Regions 1, 3, and 5); (3) simplification of minimum wage structure (wage orders of CAR, Regions 4-A and 5);

(4) inclusion of provision for issuance of productivity-based pay advisories (wage orders NCR, CAR, Regions 1, 3, 4-A, and 8); and (5) no exemption (wage order of CAR and Region 4-A).“The two-tiered will be fully implemented in 2012.” Said Baldoz, who noted that it is already being implemented in the public bus transport sector and in Region 4-A, whose latest wage order, Wage Order No. 15, has adopted the PBP scheme.

Region 8 and 3, in their wage orders, is also set to issue wage advisory on the second tier or the performance-based which shall serve as guidelines for private establishments on the range of productivity bonuses and incentives.

Higher wages

Baldoz explained that the adoption of the new wage system is aimed at correcting the exclusion of millions of workers, particularly small enterprises, from protection of the minimum wage, while addressing a host of unintended outcomes like inflation,; unemployment; and informality. She noted that upon the effectivity of the wage orders, there were upward adjustments in the minimum wage rate in the regions where the minimum wage were below poverty threshold. These regions were Central Luzon and Calabarzon.

All the wage orders encouraged labor and management to adopt productivity improvement schemes that will improve the quality of life of workers and in turn enable them to produce more and earn more, such as the PIS scheme which include time and motion studies, good housekeeping, quality circles, labor and management cooperation as well as implement gain-sharing and other performance incentive programs.

The latest to issue a new wage order was the Regional Wage Board in Region 3, 8, and the Autonomous Region of Muslim Mindanao.

RB 8 issued Wage Order RB 8 No. 17 on 4 September 2012. It provided a P7 COLA and integrated the P10 COLA under Wage Order No. 16 to the basic pay of minimum wage earners in the private sector in their region. The wage order is yet to be confirmed by the NWPC. Upon effectivity the daily wage rate of the workers in the said area will range from P220.50 to P260.

RB 3 approved Wage Order RB 3 No. 17 on 30 August 2012. The wage order provided a daily wage increase of P6 to P8 to minimum wage workers in the region. The wage order is still pending confirmation of the NWPC. Upon effectivity, the minimum wage rate in said region shall range from P302 to P236.

RB ARMM approved Wage Order No. ARMM-14 which order integrated the P10 COLA from the previous Wage Order No. 13 into the basic pay. The new minimum wage in ARMM will be effective on September 21, 2012.

Per region

The new wage order in the NCR provided a P30 daily cost of living allowance (COLA) and the integration of the P22 COLA under the previous Wage Order NCR-16 into the basic pay of all minimum wage earners in the private sector in Metro Manila. It became effective on June 3, 2012.

Region Wage Board in Region 2 granted P10 basic pay increase and integrated the old COLA of P15 into the basic pay. New minimum wage rates in the region in non-agriculture range from P247 to P255. This became effective May 16, 2012

RTWPB 4-A granted a P2-P90 basic wage increase for workers receiving minimum wage below P255 and a productivity allowance of P12.50 for workers receiving minimum wage above P255. The said increase will be given in tranches over a period of 5 years The new minimum wage rates in the region in non-agriculture now range from P267.50 to P349.50. This became effective May 15, 2012.

RB 5 provided a P3 to P23 basic wage increase, bringing new minimum wage rate in non-agriculture to P252. The wage order became effective April 7, 2012.

RB12 issued RTWPB. Wage Order No. RXII-17 which granted a daily increase in the cost of living allowance (COLA) ranging from P10 to P14.00 per day. Minimum wage earners in the private sector in Region 12 received pay adjustments effective April 18, 2012.

RB 6 approved a P6 to P12 basic wage increase, bringing new minimum wage rates in non-agriculture to a range of P235 to P277. The wage increase became effective on May 31, 2012.

RB CAR granted an P8.00 a day in basic pay, bringing up minimum wage levels in the region from P231-P272 to P239-P280. The new wage hike, which became effective on June 18, 2012, was initiated by the Wage Board on its own without any petition for wage increase having been filed by concerned parties.

RB 1 provided a P5 or P8 increase on salary per day increase which became effective on July 25, 2012. The minimum wage rate of minimum wage earners in the private sector in the said region ranged from P205 to P253.