Republic of the Philippines
‘ HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Thirteenth Congress
First Regular Session

HOUSE BILL NO. 1063

Introduced by Anakpawis Representatives Crispin B. Beltran, Rafael V. Mariano; Bayan Muna
Representatives Satur C. Ocampo, Teodoro A. Casifio, Joel G. Virador;
Gabriela Women's Party Rep. Liza Largoza-Maza

EXPLANATORY NOTE

The right of workers to a “living wage” is recognized under Article XIII, Section 3 of the 1987
Philippine Constitution. At the same time, the Constitution upholds the participation of workers in
decision-making processes affecting their rights and benefits. Beyond these legal provisions, however,
is the basic social right of workers to demand just compensation for the value and quality of labor-
power they put in to fuel industry and the economy in general.

Under Republic Act 6727 or the Wage Rationalization Act of 1989, the task of studying and fixing of
minimum wages was given to the Regional Tripartite Wages and Productivity Boards (RTWPB). Since
then, the minimum wage has differed from one region to another, and further differentiated according
to locality, industry and employment-size - among other standards set arbitrarily by the wage boards.

What is clear, however, is that minimum wages have remained grossly inadequate to support decent
living standards after more than a decade of wage “rationalization.” This hightights the failure of the
government to provide economic relief for the workers towards securing a living wage as mandated by
the Constitution.

An independent study by IBON Foundation shows that the minimum wage has not improved compared
to the cost of living in the last decade. In the National Capital Region (NCR), for instance, the
minimum wage ten years ago fulfilled barely 51% of living costs. As of June this year, the proportion
has gone down to 48%.

In June 2001, the National Wages and Productivity Commission (NWPC) of the labor department came
up with new estimates of the living wage and cost of living for all regions. The NWPC defines “living
wage” as the amount of family income needed to provide for the "cost of living,” which includes food
and non-food requirements, with sufficient allowance for savings and investments for social security.

According to the NWPC, the cost of living for a family of six in the NCR is around P15,300 a month, or
P510 a day. The prevailing daily minimum wage, however, is only P250 for non-agricultural workers
and P213 for agricultural workers. The gap between the minimum wage and cost of living ranges from
a low of P260 to a high of P297.

The situation is similar or even worse in the other regions:

In the Cordillera Autonomous Region, the highest minimum wage is pegged at P185 and the lowest
is P174, while cost of living is P497.83. The gap is from P313 to P324.


®in Region 1, the highest and lowest minimum wage is pegged at P180 and P172 while cost of living
is P433.93. The gap is from P276 to P316.

In Region 2, the he highest minimum wage is pegged at P180 and the lowest is P172, while cost
of living is P433.93. The gap is from P254 to P262.

In Region 3, the highest and lowest minimum wage is pegged at P208.50 and P197 while cost of
living is P454.23. The gap is from P245 to P257.

® In Region 4, the highest minimum wage is pegged at P217 and the lowest is P174, while cost of
living is P480.60. The gap is from P264 to P307.

In Region 5, the highest and lowest minimum wage is pegged at P182 and P135 while cost of living
is P446.10. The gap is from P264 to P311.

® In Region 6, the highest minimum wage is pegged at P173 and the lowest is P143, while cost of
living is P385.27.83. The gap is from P212 to P242,

® In Region 7, the highest and lowest minimum wage is pegged at P190 and P160 while cost of
living is P462.33. The gap is from P272 to P302.

®in Region 8, the highest and lowest minimum wage is pegged at P177 and P173 while cost of living
is P337.63. The gap is between from P161 to P165.

® In Region 9, the minimum wage is at standard P'165, while cost of living ‘while cost of living is
P446.10. The gap is P281.

in Region 10, the highest and lowest minimum wage is pegged at P180 and P173 while cost of
living is P408.60. The gap is from P229 to P236.

® In Region 11, the highest minimum wage is pegged at P180 and the lowest is P173, while cost of
living is P390.37. The gap is from P210 to P217.

® In Region 12, the minimum wage is pegged at a standard P160, while cost of living is P430.90.
The gap is P271.

‘In the ARMM, the highest and lowest minimum wage is pegged at P140 and P129.20 while cost of
living is P648.90. The gap is from P509 to P520.

We can infer from the foregoing data that the prevailing minimum wages represent only 37% to 41% of
the average cost of living of all regions. A P125.00 wage hike as demanded by the workers, would
bring minimum wages to within 64% to 68% of cost of living estimates. A P125.00 hike is therefore still
insufficient, yet substantial to raise the quality of life of 16 million workers and their dependents.

The argument of employers groups and government economic planners that high wages in the country
have forced many companies to shut down or retrench workers is invalidated by official figures from
the labor department. Of the 937 firms that resorted to permanent closure or retrenchment due to
economic reasons from January to April this year, only 22 firms or 2.3% cited the minimum wage rate
increase as main reason.


Around half (46.6%) of establishments cited reorganization, 20% attributed to lack of market or slump
in demand, while the rest cited uncompetitive price of products, competition from imports and lack of
raw materials - all functions of the worsening crisis in the domestic economy.

The argument that a wage increase will be inflationary is also disproved by the fact that labor costs
Comprise no more than 11% of production costs on the average of all Philippine industries. A wage
adjustment of P125 can therefore increase production costs by no more than 11%, This means that
businesses can absorb a substantial wage hike and the increase will not be inflationary if businesses
charged this against their profit margin.

The Constitutional provision on Social Justice and Human Rights mandates Congress “to give highest
Priority to the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities. by equitably diffusing wealth and power
for the common good.” (Article XIII, Section 1)

Consistent with the constitutional mandate for the respect of human rights, minimum wage should be
able to maintain the basic standards of living necessary for the health, efficiency and general well-
being of the worker and his/her family.

However, the government's Family Income and Expenditures Survey depicts the skewed distribution of
wealth in the country. The survey shows that the richest 20% of Filipino families account for 57% of the
total family income, while the poorest 40% account for only 11% of total family income. The extent of
Poverty and income disparity in the country reflect the subsistence conditions under which many in
the working class are forced to live.

As of September 2000, unionized workers accounted for only 3.8 million or around 12% of the total
workforce. Of this number, only around 489,000 workers are covered by existing Collective Bargaining
Agreements, or a measly 1.5% of total labor force. Thus, a great majority of Filipino workers are
effectively disempowered from bargaining for higher wages, benefits and better work conditions.
These workers can be given a voice through a legislated wage increase.

The Philippine wage hike problem is a socio-economic problem which involves the very dignity of
Filipino workers. The solution lies not in the company’s ability to pay higher wages, but in its social
and moral commitment to share profit with the workers through payment of living wages.
Unfortunately, this commitment is not shared by capitalists in the country, a situation that should be
remedied by legislation,

It's therefore most urgent and necessary to enact a legislation that would strengthen and give life to
the constitutional right of workers to living wage.

Hence, support of this bill is earnestly sought.

In view of the foregoing, approval of this bill is highly and-earnestly cp
AUN SIEM Ean iG Rafael V-Warlano

Anakpawis Anakpawis

[222 A. Gain ZL L len
Rep. Satur C. Ocampo Rey odoro A. Casifio Rep. Joel G. Virador Reg/Liza L.

Bayan Muna Bayan Muna Bayan Muna Gabriela Women's Party



Republic of the Phillppines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Thirteenth Congress
First Regular Session

1063

HOUSE BILL NO.

Introduced by Anakpawis Representatives Crispin B. Beltran, Rafael V. Marlano; Bayan Muna Representatives
Satur C. Ocampo, Teodoro A. Casliio, Joe! G. Virador;
Gabriela Women’s Party Rep. Liza Largoza-Maza

AN ACT
PROVIDING FOR A P125.00 DAILY ACROSS-THE-BOARD INCREASE IN THE SALARY RATES OF
EMPLOYEES AND WORKERS IN THE PRIVATE SECTOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION 1. This act shall be known as "The P125.00 Daily Across-The-Board Wage Increase Act.”

SEC. 2. It is hereby declared to be the policy of the State to alleviate the living conditions of the ordinary
Filipino through policies that provide for a decent and humane standard of living and improved quality of
life, particularly of the working class; to ensure the right of labor to its just share in the fruits of
Production; to guarantee the workers’ right to a living wage; and to promote social justice through the
adoption of measures calculated to ensure the well-being and economic security of all the members of the
community.

SEC. 3, In tine with the declared policy under this Act, all employers in the private sector, whether
agricultural or non-agricultural, regardless of capitalization and number of employees shall pay their
workers an across-the-board wage increase in the sum of One Hundred Twenty Five Pesos (P'125.00) a day
upon the effectivity of this act.

SEC, 4, No wage increase shall be credited as compliance with the increase prescribed herein unless
expressly provided under the collective bargaining agreements; Provided, That such wage increase was
granted in anticipation of the legislated across-the-board ‘wage increase under the Act; and, Provided
further, That where such increase is less than the prescribed increase under this Act, the employer shall pay
the difference. Such increases shall not include anniversary wage increases, merit wage increases and those
resulting from the regularization or promotion of employees.

SEC. 5, Nothing in this Act shall be construed to reduce any existing allowance and benefit of any form
under existing laws, decrees, issuances, executive orders, and any contract or agreement between workers
and employers.

SEC. 6. The Department of Labor and Employment shall, approval of this Act, conduct inspection of the
payroll and other financial records kept by the company or business to determine whether the workers are
paid the prescribed across-the-board wage increase and other benefits granted by law. In unionized
companies, the Department of Labor and Employment inspectors shall always be accompanied by the
president or any responsible officer of the recognized bargaining unit or of any interested union in the
conduct of the inspection. In non-unionized companies, establishments or businesses, the inspection should
be carried out in the presence of a worker representing the workers in the said company. The workers’
representative shall have the right to submit his own findings to the Department of Labor and Employment
and to testify on the same if he cannot concur with the findings of the labor inspector.


SEC. 7. Any person, corporation, trust, firm, partnership association, or entity violating any provision of this
Act shall be punished by a fine of not less than Twenty five thousand pesos (P25,000.00) nor more than One
hundred thousand pesos (P100,000.00) or imprisonment of not less than two (2) years nor more than four (4)
years, or both such fine and imprisonment at the discretion of the court;

Provided, That if the violation is committed by a corporation, trust or firm, association or any other entity,
the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including, but not
limited to, the president the vice-president, chief executive officer, general manager, managing director or
partner.

The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits
owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the
criminal liability imposable under this Act: Provided futher, That any person convicted under this Act shall
Not be entitled to the benefits provided for under the Probation Law.

SEC. 8. The Secretary of Labor and Employment shalt promulgate the necessary rules and regulations to
implement this Act.

SEC. 9. If any provision or part of this Act, or the application thereof to any person or circumstance is held
invalid or unconstitutional, the remainder of this Act or the application of such provision or part thereof to
other persons or circumstances, shall be affected thereby.

SEC. 10, All laws, orders, issuances, rules and regulations or part thereof inconsistent with the Provisions of
this Act are hereby repealed, amended, or modified accordingly.

SEC. 11. This Act shall take effect within fifteen (15) days after its publication in the Official Gazette or in
at least two (2) newspapers of general circulation, whichever comes earlier,

Approved.