1.      Since the 11^th Congress, workers and advocates of workers’ rights and interests have lobbied for the passage of the P125 across-the-board increase in the workers’ daily wages.  And, it is only this Congress that the bill passed the Committee level (Committee Report 162). 

2.      Before the impeachment issue floated, the labor sector wants a clear-cut guarantee that the bill will not be voted down and killed. There were several privilege speeches and manifestations on the floor discussing the matter especially from party-list representatives.  

3.      The bill is what the Filipino people would not mind being railroaded and rushed through Congress at all, especially since the recent and continuous rise of prices of our commodities (plus the e-vat implementation) without having even a peso raise in their salary, brought great dissatisfaction and frustration to our people. 

House Bill 345 

4.       House Bill 345, authored by Rep. Roseller L. Barinaga of Zam­boanga del Norte, consolidates House Bill 1063 filed by party-list representatives Teddy A. Casiño Jr. of Bayan Muna, Liza L. Maza of Gabriela and Crispin B. Beltran and Rafael V. Mariano of Anakpawis.  

5.      Under House Bill 345, all private-sector employees, whe­ther agricultural or nonagri­cultural, are to be given a P125 daily-wage increase, separate from any anniversary wage increase, merit wage increase and those resulting from regularization of employment. 

6.      Another provision of the bill is that any wage increase will not be considered a compliance with the legislated increase unless this is expressly provided under a valid collective bargaining agreement. And if any wage increase is lower than P125 per day to be legislated, an employer must pay the difference 

7.      House Bill 345, which provides for a P125 has been approved by the House Committee on Labor and is up for second reading.

Gap between minimum wage and cost of living 

8.      According to statistics, as of June 1999, the gap between the minimum wage and cost of living, which is estimated at over P560 for a family of six in Metro Manila, ranges from a low of 260 to a high of P297.00.   

9.      According to the explanatory note of HB 345 (one of the bills consolidated for CR 162)), “the real value or the purchasing power of the current P250 minimum wage for the National Capital region (NCR) has already fallen to less than 74 using 1989 as base year. This translates to a difference of around P125 between the current nominal wage and its corresponding real value in 1989 prices.” 

10.     According to NEDA, the proposed P125 across-the-board daily-wage increase for private workers would increase prices by another 5.10 percent and the unemployment rate by an additional 3.66 percent.

11.     Following this projection of NEDA, the wage hike bill, if enacted into law, would cause the government to miss its inflation and unemployment targets by a wide margin this year.

12.     Under the Administration’s Medium-Term Philippine Development Plan, the government wants to keep the rise in prices within a 4-percent to 5-percent range, and unemployment at 11.9 percent this year.

13.     NEDA also projected that in the event of a 7-percent increase in the inflation rate, the P125 increase in wages would further hike prices to 12 percent.

Business sector sentiments 

14.  Usual comment from the Business sector – that to handle the P125 across-the-board wage increase will cause massive retrenchment of their workers. 

15.  They also expressed alarm over the decision of the House Committee on Labor and Employment, stressing that the approval may prompt companies to close down or move their operations to countries with lower labor costs.  

16.  Employers have always threatened that legislated wage hike will result to a massive retrenchment.  It has been projected that a wage hike bill would render an additional 1.1 million to 1.5 million Filipinos jobless. This means the unemployment rate could rise to about 15 percent this year.  Data from the National Statistics Office showed unemployment reached 3.89 million in October 2004 from 3.6 million in October 2003. 

17.  Contrary to what the Employers Confederation of the Philippines (ECOP) and NEDA are saying, the wages of Filipino workers are lower than their counterparts in other Southeast Asian countries (IBON Foundation). Metro Manila workers get only $1.4 an hour compared to $1.8 an hour received by workers in Bangkok and $1.7 in Jakarta. 

18.  At present, the daily minimum wage among nonagricultural workers in Metro Manila was P300, but labor groups said this is much lower than the cost of living in the metropolis—more than P500 each day. 

19.  ECOP said the bill, passed by the House Committee on Labor and Employment on January 13, 2005, would result in companies shutting down or moving their operations to countries where labor costs are comparatively lower. 

Comparing with neighboring countries 

20.  According to the National Wages and Productivity Commission MWPC), the daily minimum wage in the Philippines is higher than in China, Vietnam, Indonesia and Thailand. 

21.  In particular, the P300 minimum daily wage in Metro Manila was estimated at $5.36, higher than Vietnam's $0.91 to $0.92, China's $0.31 to $1.28, Indonesia's $1.41, and Thailand's $3.42 to $4.33. The minimum daily wage in the Philippines, however, is lower than Malaysia's daily wage range of $4.23 to $9.08, South Korea's $19.22, and Singapore's $14.25 to $44.77.

Globalization/Competitiveness 

22.  According to Scholastica D. Cororaton (Asst. Dir.of the NEDA National Policy and Planning Staff), “In a period of globalization, the labor market must adjust. You should not legislate wages. This is one of the reasons why Argentina now has a debt crisis.” 

23.   Cororaton also said that the proposed increase in wages will also affect the country’s competitiveness. 

Interest rates 

24.  The hike in interest rates that would follow a wage increase would also raise the cost of government borrowing. At a time when it is faced with a budget deficit, costlier credit would make it more difficult for the government to manage its finances.   

Wage hike to cut growth by 3.87 percentage points  

25.  The proposed wage increase would slow the economy by 3.87 percentage points, adding that unemployment rate will rise by 3.55 percentage points, or an additional 1.1 million to 1.5 million workers jobless (Cororaton).    

Related SWS Survey 

26.  The results of the social survey by the Social Weather Station (SWS) for the third quarter of 2004, showing that 15 percent of Filipino families spent an entire day with nothing to eat during the period, highlighted the need for a P125 across-the-board wage increase for workers and an increase in the farmgate price of palay (unmilled rice) as immediate economic relief for the country’s poorest sectors – who comprise 88 percent of the population based on studies by the socio-economic think tank IBON Foundation.