Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

4827
HOUSE BILL No. __“° a7

INTRODUCED BY ANAKPAWIS PARTY-LIST REPRESENTATIVE
RAFAEL V. MARIANO

EXPLANATORY NOTE

Wage situation in the Philippines is characterized by labor
exploitation and employers and capitalists’ power and influence over the
legislative processes of the land. From the first wage law, Republic Act
No. 602 otherwise known as “An Act to Establish Minimum Wage Law,
and For Other Purposes” enacted in 1951 to the present Republic Act No.
6727 otherwise known as “An Act to Rationalize Wage Policy
Determination by Establishing the Mechanisms and Proper Standards
Therefor, Amending for the Purpose Article 99 of, and Incorporating
Articles 120, 121, 122, 123, 124, 126 and 127 into, Presidential Decree
No. 442, as amended, otherwise known as the Labor Code of the
Philippines, Fixing New Wage Rates, Providing Wage Incentives for
Industrial Dispersal to the Countryside, and For Other Purposes” enacted
in 1989, the Philippine government has guaranteed that Filipino workers
remain virtual slaves - receiving the lowest wages even as they bring in
the biggest profits for capitalists.

Since the 1950s, the productivity of the Filipino people has
increased annually and at a steady rate. Wages paid to direct producers,
however, averaged only to 30% of the wealth produced from 1951 to
1998. The biggest part of the unpaid value produced or about 38% is
spent to finance the extravagant lifestyles of the rich and ruling sectors of
society which constitutes only 3% of the country’s population. About 12%
is spent to finance the constant deficits in the colonial trade to fund
government operations, more than 60% of which are cither spent on
payments of local and foreign debt payments or lost to corruption.
Finally, only 20% of the over-all wealth of the country is used for the
development of the means of production.

Consequently, the economy has remained backward and pre-
industrial. The lives of the Filipino people - the working masses
composed of the industrial proletariat, semi-proletariat, poor peasants
and lower middle peasants who rely on selling their labor power to
augment their farm income and the petty bourgeoisie — have deteriorated.



Republic Act No. 6727 which was enacted after the ouster of the
Marcos dictatorship is a glaring example of a wage law enacted by the
government that heightened labor exploitation to unprecedented levels.
Nearly two (2) decades after this law was enacted, the working people
remain victims of low wages. According to the analysis and stand of
workers unions and ecumenical institutions advocating labor rights,
Republic Act No. 6727 enacted under the presidency of former President
Corazon Cojuangco-Aquino is the most notorious and violative of
workers’ rights to living and decent wages.

‘The transformation of the capitalist-dominated wage boards into
formal organizations authorized to determine and execute the self-serving
judgment and decision of its members from the ranks of big business and
employers regarding wages was a violent and comprehensive attack
against the economic interest of workers. The government, through this
anti-labor, mercenary law, gave businesses and employers the direct
power to determine the ultimate level of exploitation that they can impose
on the working people.

‘The law also shields the Philippine government from direct
accountability for the increased and worsened poverty of workers,
correspondent to the increased magnitude of exploitation borne by the
law's disastrous effect.

In the meantime, the granting of powers to the regional wage
boards also dispersed the campaign on the wage issue to other regions
where, away from the scrutiny of militant public opinion, the landlord
and bourgeois comprador classes hold firmer control. The creation of
these regional wage boards had the effect of blunting the power of the
country’s militant labor movement to fight for nationwide and across-the-
board wage increases through concentrated political battles in the
National Capital Region (NCR) or in other centers of the government's
authority and power.

Republic Act No. 6727 employs the most deceptive language to
mask its essential anti-labor nature and objective. It maintains a facade
of having democratic, just and progressive aims. Section 2 of Republic
Act No. 6727 provides that the State needs to “rationalize the fixing of
minimum wages...”

1. To promote productivity-improvement and __gain-sharing
measures to ensure a decent standard of living for the workers
and their families;

2. To guarantee the rights of labor to its just share in the fruits of
production;

3. To enhance employment generation in the countryside through
industrial dispersal; and

4. To allow business and industry reasonable returns on
investment.


‘The first and second objectives of the law are blatant lies. Republic
Act No. 6727, at the very first instance, ensured that the interest of
landlords remained tightly entrenched by pegging the wages in feudal
estates such as Hacienda Luisita lower by 34.27% compared to wages of
workers in the service and industrial sectors. The law also discriminates
agricultural workers in Metro Manila who receive wages of 14.24%-
17.85% less than the wages of workers in other sectors

Enhancement of employment generation in the countryside
through industrial dispersal as upheld by the third objective is not the
real intent of Republic Act No. 6727. It is a deceptive articulation of the
government which gives wider opportunity to foreign big business
monopolies and their local business partners to increase their profits by
taking advantage of the cheaper labor cost in the provinces. The wide
disparity between wages in Metro Manila and wages in the provinces
created by the landlord bourgeois comprador-controlled regional wage
boards induced multinational corporations to move to the provinces
particularly in the export processing zones.

‘This fact exposes the real pro-foreign big business, pro-monopoly
character and orientation of Republic Act No. 6727. It has not only
allowed business and industry reasonable returns on investment as
maintained by the law’s fourth objective. It is clear that (from the
government’s own statistics) the law’s only effect is the increased
exploitation of the working people. Since 1989, government and business
leaders have exuberantly bragged on the constant growth of the industry,
service and agriculture sectors. However, they remain indifferent to the
stagnation of wages.

The masses’ just demands for across the board wage increase are
met with obscure and irrelevant arguments. Among these are:

1. Higher wages are not good for the economy because they scare
away foreign investment (ie. foreign monopoly capital) that
presently employ a big part of the labor force.

2. Wage levels in the Philippines are too high. In fact, they are the
highest in the region.

3. Granting wage increase would lead to the bankruptcy of small
and medium scale enterprises.

4. Wage increase is impermissible at this time because of the
fiscal crisis.

Blatantly and conspicuously absent from these discourses are the
aims of “guaranteeing the rights of labor to its just share in the fruits of
production, and ensuring a decent standard of living for the workers and
their families.”

Likewise, these divert discussions away from the irrefutable
relationship between ever-increasing profits and ever worsening poverty
consequent to the machination of the ruling classes in implementing the
law.


Ecumenical Institute for Labor Education and Research (FILER),
citing the data from the Bureau of Employment and Labor Statistics
(BLES) said that the latest index of compensation as of 2009 was 112.9,
which is exactly the same as during 1995. The group also said that the
real value of wages stagnated even with wage orders issued by the
regional wage boards.

‘The group further averred that the fact that the real value of
workers’ compensation stagnated for fifteen (15) years despite pay
increases clearly tells that wage boards failed in its mandate to raise
standards of living of Filipino workers. It also tells us that workers have
long been denied of substantial wage increase

‘The group also noted that workers’ compensation in 2009 was
much lower compared to its value in 1989, the year when the regional
wage boards were created under Republic Act No. 6727.

Based on its record, regional wage boards have granted increases
not exceeding P26 since its inception in 1989.

Based on Ecumenical Institute for Labor Education and
Research’s (SILER) computation, the new P426 minimum wage (as of
June 2011) with the integrated cost of living allowance (COLA) in the
National Capital Region (NCR) is only worth P248 in real terms using the
April 2011 inflation. Assuming that the current rate of price hikes will
continue throughout the year, the P248 real wage in National Capital
Region (NCR) will shrink to only P235 by September.

The group also monitored that regional wage boards have
approved measly wage hikes averaging P13 in ten (10) regions since
August 2010. In some regions, wage boards granted wage increase
amounting to a ridiculous low of P5. In 2009, seven (7) out of ten (10)
Filipinos are living on P104 or less a day based on the latest Family
Income and Expenditure Survey.

Finally, Congress must prioritize the repeal of Republic Act No.
6727 which has created disaster to the life of the Filipino workers and
has denied them the right to a just and living wage. Congress must also
legislate laws that will uphold the economic welfare of the workers and
the rest of the working people.

In view of the foregoing, the early passage of this bill is earnest!
requested.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _ “©

INTRODUCED BY ANAKPAWIS PARTY-LIST REPRESENTATIVE
RAFAEL V. MARIANO

AN ACT
REPEALING REPUBLIC ACT NO. 6727 OTHERWISE KNOWN AS “AN
ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY
ESTABLISHING THE MECHANISM AND PROPER STANDARDS
THEREFOR, AMENDING FOR THE PURPOSE ARTICLE 99 OF, AND
INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126 AND 127
INTO, PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES, FIXING NEW
WAGE RATES, PROVIDING WAGE INCENTIVES FOR INDUSTRIAL
DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES”

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Republic Act No. 6727 otherwise known as “An Act to
Rationalize Wage Policy Determination by Establishing the Mechanisms
and Proper Standards Therefor, Amending for the Purpose Article 99 of,
and Incorporating Articles 120, 121, 122, 123, 124, 126 and 127 into,
Presidential Decree No. 442, as amended, otherwise known as the Labor
Code of the Philippines, Fixing New Wage Rates, Providing Wage
Incentives for Industrial Dispersal to the Countryside, and For Other
Purposes” is hereby repealed.

SECTION 2. This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved.