Marcos Jr’s first year passes without a wage hike, while NCR hike in July still paltry — IBON

July 3, 2023

by IBON Foundation

The wage hike approved for the National Capital Region (NCR) in June only takes effect in July, meaning constant wage erosion throughout the first year of the Marcos Jr administration. The amount given is also a far cry from what labor groups demand and certainly much less than what Filipino workers need and deserve, research group IBON said. The resulting NCR wage is still far below the family living wage.

The NCR Regional Wage Board will increase the Php570 daily minimum wage by Php40 to Php610 in July 2023. This is Php490 short of the Php1,100 minimum wage petition of the Unity for Wage Increase Now! (UWIN), Php710 less than the Makabayan bloc’s proposed Php750 wage increase, and Php110 shy of Senator Miguel Zubiri’s Php150 wage increase bid.

IBON also stressed that the resulting wage is still much less than the family living wage (FLW) of Php1,160 for a family of five to live decently in NCR as of May 2023. There is still a wage gap of Php550 and the new wage is still barely half or just 53% of the FLW in the NCR.

Computed on a monthly basis with a 5-day work week, the new NCR minimum wage is Php13,420 which remains lower than the already unrealistically low official poverty threshold of Php13,741 in the NCR. The wage hike is far from enough to help workers and their families cope with the high and rising cost of living.

IBON pointed out that this last-minute wage hike is the first and only one under the Marcos Jr administration in any of the country’s 17 regions. In contrast, the Duterte administration had 11 wage hikes, Noynoy Aquino gave 17 hikes, and Arroyo 9 hikes in their respective first years in office. This highlights the current government’s insensitivity to millions of workers and their families struggling with the rising cost of living.

Moreover, the real value of the NCR minimum wage or adjusting for inflation is still lower than the highest it reached four-and-a-half years ago. Computed at constant 2018 prices for comparability, the real value of the new wage is around Php516 which is still less than the peak Php538 reached in December 2016.

The meager wage hike does not correct how wages have not kept up with decades of increasing worker productivity. The Php40 for instance barely matches the increase in NCR worker productivity last year. Measuring productivity as nominal regional gross domestic product (GDP) divided by total employment, worker productivity increased 6.4% in 2022 from the year before while the Php40 wage on the other hand is just a 7% increase. This means that the bulk of growing workers’ productivity is still mainly going to increasing company profits.

The Marcos Jr administration cannot tout the NCR wage hike as an additional accomplishment to report on its first year, IBON said. The new NCR wage is still so much lower than demanded by workers, than the FLW for a more decent standard of living, and even less than the increase in worker productivity. Moreover, the plight of millions more low-income self-employed and other informal sector workers and unemployed Filipinos remains unaddressed. ###