TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUl -7 A 9 33
S. No.
SENATE
163
Introduced by Senator Loren Legarda
AN ACT
ESTABLISHING THE STANDARDS FOR A LIVING WAGE, AMENDING FOR THE 
PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES, AS AMENDED
EXPLANATORY NOTE
According to the International Labour Organization (ILO), over half of the global 
workforce are wage earners. This means that, for many househoids, the primary 
source of income is wages. However, the ILO also noted that millions of workers earn 
wages "too low to afford a decent standard of living".1
In the Philippines, a data report from the Ibon Foundation as of January 2025 
iilustrates a significant disparity between the national average daily minimum wage, 
which is P469, compared to the average family living wage of Pl,237. This reflects an 
average wage gap of P762 for all working Filipinos.2
Last year, 2024, the ILO reached an agreement regarding the concept of living 
wage, with experts defining it as "the wage level that is necessary to afford a decent 
standard of living for workers and their families, taking into account the country 
circumstances and caicuiated for the work performed during the normal hours of work, 
calculated in accordance with the ILO's principles of estimating the living wage, to be 
achieved through the wage-setting process in line with ILO principles on wage
1 Retrieved June 26, 2025, from: International Labour Organization on Living Wages. 
https://www.ilo.org/Iiving-wages.
2 Retrieved June 26, 2025, from: IBON Foundation. (2025, February 6). Minimum wage and family 
living wage per region, as of January 2025. https://www.ibon.org/flw-regl-2501/
1


setting."3
The most recent findings available in the 2023 study by PwC and Wage 
Indicator reveal a global trend where 24% of employers currently pay a living wage, 
while 54% of employers expect to do so in the next five years.4
The Philippine Constitution mandates that all workers shall be entitled to a living 
wage (Section 3, Article XIII, 1987 Constitution), among other labor rights such as 
security of tenure and humane conditions of work. Although Republic Act No. 6727 or 
the Wage Rationalization Act includes living wages as a factor in wage-setting, the 
reality on the ground remains far from this goal.
By amending Article 124 of Presidential Decree No. 442, or the Labor Code of 
the Philippines, this measure seeks to institutionalize the living wage as the new 
benchmark for regional minimum wage-setting. One that is data-driven and 
transparent, one that will facilitate assistance to families to meet their basic and 
essential needs, including adequate food, shelter, education, healthcare, and social 
participation.
Thirty-six years have passed since the enactment of the Philippine Labor Code, 
and the standards and assumptions that shaped wage policies in 1989 are no longer 
responsive to the needs of the modern Filipino worker. After more than three decades, 
it is time to update the wage-setting framework to reflect the country's current labor 
realities. This would also reaffirm the Constitutional promise of decent work and just 
compensation.
In view of the foregoing, the immediate passage of this biil is earnestly sought.
"LOREN LEGARDA
3 Retrieved June 26, 2025, from: the International Labour Organization. (2024, March 15). ILO reaches
agreement on the issue of living wages. https://www.ilo.org/global/about-the- 
ilo/newsroom/news/WCMS_918717/lang- 
t . n/
en/index.htm#:~:text=The%20agreement%20says%20that%20the,and%20local%20contexts/o20an
d%20socio°/o2D 
. 
, 
,
4 Retrieved June 26, 2025, from: PwC. (2023, October). Living wage: An emerging standard.
https://www.pwc.com/gx/en/services/tax/assets/global-living-wage-report.pdf
2


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session
S. No.
)
SENATE
163
|j! -7 A 9 33
\J J —
Introduced by Senator Loren Legarda
AN ACT
ESTABLISHING THE STANDARDS FOR A LIVING WAGE, AMENDING FOR THE 
PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE 
LABOR CODE OF THE PHILIPPINES, AS AMENDED
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
1 
Section 1. Short Title. — This Act shall be known as the "Living Wage Act".
2 
Sec. 2. Article 124 of Presidential Decree No. 442, as amended and
3 
renumbered, is hereby amended to read as follows;
4 
"ART. 124. Standards/Criteria for Minimum Wage Fixing. — The
5 
regional minimum wages to be established by the Regional Board shall
6 
[be as nearly odcquatG os is Gconomically foQsiblG to maintain the
7 
minimum standards of living nccGGsary for the health, efficiency and
8 
general well being of the cmployoGS within the framework of the
9 
national economic and sociai deveiopment program] MEET THE
10 
LIVING WAGE THAT IS NECESSARY TO AFFORD A DECENT
11 
STANDARD OF LIVING FOR WORKERS AND THEIR FAMILIES. In
12 
the determination of such regional minimum wages, the Regional Board
13 
shall, among other relevant factors, consider the following:
14 
(a) [The demand for iiving wages] ESTIMATION OF THE NEEDS
15 
OF WORKERS AND THEIR FAMILIES, INCLUDING BUT
16 
not limited to food, clothing, shelter.


17 
HEALTHCARE, EDUCATION, CONDUCTED THROUGH
18 
TRANSPARENT AND EVIDENCE-BASED METHODOLOGIES
19 
IN CONSULTATION WITH TRIPARTITE INDUSTRIAL
20 
PEACE COUNCILS (TIPCs);
21 
(b) Wage adjustment vis-a-vis the consumer price index;
22 
(c) [The] CHANGES IN the cost of living and [changes or incroases
23 
therein] PATTERNS OF CONSUMPTION;
24 
[(d) The needs of workers and their families;]
25 
(D)The need to induce industries to invest in the countryside;
26 
(E) Improvements in standards of living;
27 
(F) The prevailing wage levels;
28 
(G) [Fair return of the capital invested and c]Capacity to pay of
29 
employers;
30 
(H) Effects on employment generation and family income; and
31 
(I) The equitable distribution of income and wealth along the
32 
imperatives of economic and social development.
33 
X X X "
34 
Sec. 3. Implementing Rules and Regulations. — Within ninety (90) days from
35 
the effectivity of this Act, the Department of Labor and Employment, in coordination
36 
with the Tripartite Industrial Peace Councils and other relevant stakeholders, shall
37 
promulgate the rules and regulations for the effective implementation of this Act.
38 
Sec. 4. Separability Clause. — If any portion or provision of this Act is declared
39 
unconstitutional, the remainder of this Act or any provision not affected thereby shall
40 
remain in force and effect.
41 
Sec. 5. Repealing Clause. — Any law, presidential decree or issuance, executive
42 
order, letter of instruction, rule or regulation inconsistent with the provisions of this
43 
Act is hereby repealed or modified accordingly.
44 
Sec. 6. Effectivity. — This Act shail take effect after fifteen (15) days following
45 
its complete publication in the Official Gazette or a newspaper of general circulation.
Approved,