TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
25 JlJL-7 n2:02
SENATE
S.B. No. 210
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
AMENDING REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS THE WAGE 
RATIONALIZATION ACT, FURTHER RATIONALIZING WAGE POLICY AND 
MECHANISMS FOR BETTER WORKER EARNINGS BASED ON MICRO, SMALL, 
AND MEDIUM ENTERPRISES (MSME) PRODUCTIVITY AND FOR OTHER 
PURPOSES
EXPLANATORY NOTE
The existing framework for minimum wage setting in the Philippines, as 
embodied in Republic Act No. 6727, has served as a mechanism for adjusting wages 
at the regional level. However, persistent chalienges remain regarding the adequacy 
of mandated minimum wages in meeting the basic needs of workers and their famiiies, 
often faiiing short of regional poverty lines. Critics argue that the composition and 
operationai dynamics of the Regional Tripartite Wages and Productivity Boards 
(RTWPBs) tend to yieid conservative wage adjustments.
The curent composition of the RTWPBs, primariiy comprising representatives 
from the Department of Labor and Empioyment (DOLE), National Economic and 
Deveiopment Authority (NEDA), and Department of Trade and Industry (DTI), aiong 
with private sector representatives, often leads to wage orders that prioritize economic 
stability and business viability, sometimes at the expense of substantial wage 
increases. While these concerns are valid, the perception of a "conservative 
technocratic" influence can iead to a disconnect between mandated wages and the 
actual cost of living.
Furthermore, the iegitimate concern for the capacity of Micro, Small, and 
Medium Enterprises (MSMEs) to afford higher wages is a recurrent justification for 
modest adjustments. While exemptions exist for distressed enterprises and certain 
small establishments, these measures are reactive and do not address the 
fundamental issue of enhancing MSME productivity and their abiiity to provide 
competitive compensation. Economic analyses, such as those by Lanzona, highlight


the potential for minimum wage policies to inadvertently contribute to a "brain drain" 
from MSMEs to larger firms, thus exacerbating disparities and hindering overall 
economic dynamism.
This proposed legislation seeks to address these critical issues by introducing 
reforms that aim to create a more balanced, responsive, and forward-looking wage 
setting mechanism. It recognizes that sustainable wage increases must be intrinsically 
linked to enhanced productivity and competitiveness of firms, particularly MSMEs, 
while simultaneously providing robust safety nets for vulnerable sectors.
This Act proposes the following key amendments to Republic Act No. 6727:
• 
Rebalancing Voting Power of Government Agencies: Section 5 of RA 6727 is 
amended to stipulate that the collective vote of the Regional Directors of DOLE, 
NEDA (or its successor agency, such as the proposed Department of Economic 
Development), and DTI shall constitute one (1) vote within the Regional 
Boards. This structural change aims to ensure that while the expertise of these 
agencies is considered, their combined influence does not disproportionately 
dominate the wage determination process. It encourages internal consensus­
building among these agencies, fostering a more unified government stance on 
wage policies.
• 
Inclusion of Governors in RTWPBs: A significant innovation is the inclusion of 
two (2) Provincial Governors from the respective region, selected by the 
Regional Development Council (RDC), as voting members of the RTWPBs. 
Governors, as directly elected representatives and chief executives of their 
provinces, bring a critical local perspective, directly responsive to the socio­
economic realities, employment dynamics, and development priorities at the 
grassroots level. Their inclusion ensures that regional wage decisions are more 
attuned to local conditions and broader regional development strategies, 
fostering a more holistic approach to wage policy.
• 
Mandatory Regulatory Impact Assessment (RIA) for Wage Orders: The Act 
mandates the RTWPBs to conduct a comprehensive Regulatory Impact 
Assessment (RIA) for every proposed minimum wage adjustment. This RIA will 
specifically evaluate the potential economic and social effects on MSMEs, young 
workers, and women, who are often most vulnerable to adverse impacts of 
wage hikes. The RIA will serve as a crucial evidence-based tool to identify 
potential negative consequences, moving beyond anecdotal concerns to data- 
driven analysis.
• 
Proactive Countervailing Safety Nets: Based on the findings of the RIA, the 
RTWPBs are empowered and mandated to propose appropriate countervailing


safety nets and support mechanisms to the RDC and relevant national agencies. 
These safety nets, to be supported by the national budget, could include wage 
subsidies, targeted skills training programs, facilitated access to credit for 
MSMEs, and technical assistance. This provision shifts the paradigm from simply 
limiting wage increases to avoiding negative impacts, to proactively mitigating 
those impacts through government support. It acknowledges that fostering 
decent work and fair wages is a shared societal responsibility.
o
Development of Regional Productivity Roadmaps and Industrial Policy: This is 
a forward-looking provision that fundamentally links wage adjustments to long­
term productivity and industrial development. Each RTWPB, in coordination 
with the RDC, is tasked with developing a regional roadmap for an industrial 
policy approach. This roadmap will focus on:
o Enhancing Firm Capabilities: Helping MSMEs improve product/service 
quality, reliability, pricing, and scale of operations.
Market Participation: Enabling firms to participate in more demanding 
local and international markets.
Innovation and Technology: Promoting the adoption of new technologies 
and innovative practices. This provision is rooted in the economic 
principle that labor is a derived demand. By enhancing the overall 
capability and competitiveness of firms, particularly MSMEs, the demand 
for skilled and productive labor will naturally increase, leading to higher 
compensation for workers. This approach ensures that wage increases 
are not merely mandated but are sustainable outcomes of a more robust 
and productive economy. The regional autonomy in developing these 
roadmaps acknowledges the diverse economic landscapes across the 
Philippines.
The enactment of the "Fair Wages and Productivity Act of 2025" is expected to yield 
several positive outcomes:
• 
More Responsive Wage Adjustments: The rebalanced composition of the 
RTWPBs and the inclusion of local government leaders will lead to wage orders 
that are more reflective of regional socio-economic realities and the needs of 
workers, while still considering the capacity of businesses.
• 
Evidence-Based Policymaking: The mandatory RIA will ensure that wage 
decisions are informed by comprehensive analysis, allowing for targeted 
interventions to mitigate adverse effects.
• 
Stronger Social Safety Nets: The institutionalization of countervailing safety 
nets, supported by the national budget, will protect vulnerable firms and 
workers from potential negative impacts of wage adjustments, fostering a more 
inclusive growth environment.
• 
Sustainable Wage Growth through Productivity: The focus on regional


productivity roadmaps and industrial policy will shift the long-term approach to 
wage increases from mere mandates to organic growth driven by enhanced 
firm capabilities and competitiveness, leading to better-compensated workers 
in a thriving economy.
• Reduced Brain Drain from MSMEs: By enhancing the capacity of MSMEs to be 
more productive and thus afford better wages, the proposed measures can help 
retain skilled workers within these crucial enterprises, fostering more balanced 
regional development.
This Act represents a paradigm shift in minimum wage policy, moving beyond 
a purely wage-setting regulatory approach to an integrated strategy that combines 
fair wage setting with proactive economic development for MSMEs and social 
protection.
In view of the foregoing, the passage of this bill is earnestly sought.
RISA HONTIVEROS U 
Senator


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
25 JUl -7 PI2 -02
SENATE
S.B. No.
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
AMENDING REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS THE WAGE 
RATIONALIZATION ACT, FURTHER RATIONALIZING WAGE POLICY AND 
MECHANISMS FOR BETTER WORKER EARNINGS BASED ON MICRO, SMALL, 
AND MEDIUM ENTERPRISES (MSME) PRODUCTIVITY AND FOR OTHER 
PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Short Title. This Act shall be known as the "Fair Wages and
2 
Productivity Act of 2025."
3 
Sec. 2. Declaration of Policy. It is hereby declared the policy of the State to
4 
promote a just and dynamic social order that will ensure the prosperity and
5 
independence of the nation and free the people from poverty through policies that
6 
provide adequate social services, promote full employment, a rising standard of living,
7 
and an improved quality of life for all. Towards this end, the State shall continue to
8 
rationalize the setting of minimum wages, ensuring not only the welfare of workers
9 
and their families but also fostering productivity and competitiveness of enterprises,
10 
particularly Micro, Small, and Medium Enterprises (MSMEs), and developing long-term
11 
strategies for inclusive economic growth.
12 
Sec. 3. Section 3 of Republic Act No. 6727 is hereby amended to read as
13 
follows:
14 
"SEC. 3. Creation of National Wages and Productivity Commission. There is hereby
15 
created a National Wages and Productivity Commission, hereinafter referred to as the
16 
Commission, which shall be attached to the Department of Labor and Employment
17 
(DOLE) for policy and program coordination.


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
The Commission shail be composed of the Secretary of Labor and Employment as ex- 
officio Chairman, the Director-Generai of the National Economic and Development 
Authority (NEDA) or its successor agency as ex-officio Vice-Chairman, and two (2) 
members each from the workers and empioyers sectors who shail be appointed by the 
President of the Phiiippines for a term of five (5) years without reappointment: 
Provided, That if a member of the Commission representing the workers or empioyers 
sectors faiis to compiete his term, the President shaii appoint his successor for the 
unexpired portion of the term."
Sec. 4. Section 5 of Repubiic Act No. 6727 is hereby amended to read as 
foilows:
"SEC. 5. Creation of Regional Tripartite Wages and Productivity Boards. There is 
hereby created Regionai Tripartite Wages and Productivity Boards, hereinafter 
referred to as Regionai Boards, in ali regions, including autonomous regions as may 
be estabiished by iaw. The Commission shaii determine the offices/headquarters of 
the respective Regional Boards.
Each Regional Board shall be composed of: (a) The Regional Director of the 
Department of Labor and Empioyment as Chairman; (b) The Regionai Directors of the 
Nationai Economic and Deveiopment Authority or its successor agency, and the 
Department of Trade and Industry, as Vice-Chairmen. However, for purposes of voting 
on wage orders and productivity programs, the coilective vote of the Regionai 
Directors of the Department of Labor and Empioyment, the National Economic and 
Deveiopment Authority or its successor agency, and the Department of Trade and 
Industry shaii coiiectiveiy constitute one (1) vote, to be cast based on their internal 
consensus and prior deiiberation on the proposed wage order or productivity program, 
(c) Two (2) members each from the workers and empioyers sectors who shaii be 
appointed by the President of the Philippines, upon recommendation of the Secretary 
of Labor and Empioyment, for a term of five (5) years without reappointment: 
Provided, That if a member of the Regionai Board representing the workers or 
empioyers sectors fails to complete his term, the President shaii appoint his successor 
for the unexpired portion of the term, (d) Two (2) Provinciai Governors from the 
region, seiected by the Regionai Deveiopment Councii, who shaii serve for a term of 
three (3) years concurrentiy with their terms as local chief executives, and who shaii


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
each have one (1) vote."
Sec. 5. Section 6 of Republic Act No. 6727 is hereby amended by inserting new 
paragraphs to read as follows:
"SEC. 6. Powers and Functions of the Regional Boards. The Regional Boards shall have 
the following powers and functions in their respective territorial jurisdiction:
a) To develop plans, programs, and projects relative to wages, incomes, and 
productivity improvement for their respective regions;
b) To determine and fix minimum wage rates applicable in their region, provinces, 
or industries therein and to issue the corresponding wage orders, subject to 
the guidelines issued by the Commission;
c) To undertake researches and studies on wages and productivity;
d) To review, assess, and approve applications for exemption from wage orders;
e) To conduct public hearings and consultations, including joint consultations with 
labor and employer representatives, to ascertain the socio-economic conditions 
in the region and gather inputs on proposed wage adjustments;
f) To conduct a comprehensive Regulatory Impact Assessment (RIA) on the 
potential economic and social effects of proposed minimum wage adjustments, 
particularly on Micro, Small, and Medium Enterprises (MSMEs), young workers, 
and women, identifying potential negative impacts on employment and 
business viability. The RIA shall serve as a basis for the identification and 
proposal of countervailing safety nets;
g) To propose to the Regional Development Council (RDC) and relevant national 
government agencies, with the support of the national budget, appropriate 
countervailing safety nets and support mechanisms to mitigate any identified 
negative effects of higher regional wages on vulnerable sectors, including but 
not limited to, wage subsidies, skills training programs, access to credit, and 
technical assistance for MSME productivity enhancement;
h) To develop and implement, in coordination with the Regionai Development 
Council (RDC) and relevant government agencies, a regional roadmap for an 
industrial policy approach aimed at raising the productivity and competitiveness 
of firms, especially MSMEs. This roadmap shall focus on:
a. Enhancing the capability of firms to improve the quality of their products


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
and services;
b. Improving the reliability, price, and scale of their deliveries;
c. Facilitating their participation in more demanding local and international 
markets; and
d. Promoting innovation and technological adoption. The regional roadmap 
shall be tailored to the specific economic landscape and development 
priorities of each region, with the ultimate goal of increasing the capacity 
of firms to provide higher compensation to workers through .enhanced 
productivity and profitability.
i) To exercise such other powers and functions as may be necessary to carry out
their functions and to attain the purposes of this Act."
Sec. 6. Transitory Provisions. The selection of the two (2) Provincial 
Governors to sit in the Regional Boards shall be completed by the respective Regional 
Development Councils within ninety (90) days from the effectivity of this Act.
Sec. 7. Implementing Rules and Regulations. The Secretary of Labor and 
Employment, in consultation with the National Wages and Productivity Commission, 
the Department of Trade and Industry, the National Economic and Development 
Authority, and representatives from the workers and employers sectors, and the 
Regional Development Councils, shall promulgate the necessary rules and regulations 
for the effective implementation of this Act within one hundred eighty (180) days from 
its effectivity.
Sec. 8. Repealing Clause. All laws, presidential decrees, executive orders, 
proclamations, rules, and regulations, or parts thereof, inconsistent with the provisions 
of this Act are hereby repealed or modified accordingly.
Sec. 9. Separability Clause. If any provision of this Act is declared 
unconstitutional, the same shall not affect the validity and effectivity of the other 
provisions hereof.
Sec. 10. Effectivity Clause. This Act shall take effect fifteen (15) days after 
its complete publication in the Official Gazette or in at least two (2) newspapers of 
general circulation.
Approved,