What is Minimum Wage?
The minimum wage is the least amount allowable by law that employers should compensate their employees. Additionally, the employer cannot set minimum wages any less using any collective agreement or individual contract.
Additionally, minimum wages are in place to ensure fair compensation for the employees’ basic necessities with the salary that they earn. That is why in the Philippines, the minimum wage varies from region to region.
These wages are set by the local productivity boards and are further classified by work sectors. Ultimately, the minimum wage corresponds with the region’s cost of living and adjusts to inflation rates.
Who or what controls the minimum wage?
The minimum wage rates are updated as often as necessary. This is to address changes in the cost of basic necessities and upon approval of petitions for wage hikes. But who regulates these changes? Such is the duty of the National Wages and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivity Board (RTWPB).
These agencies are also under the Presidential Decree No. 442 or Labor Code of the Philippines. Moreover, it was further revised and amended in 1989 by Republic Act No. 6727.
Furthermore, the NWPC and the RTWPBs (wage boards) have the authority to set the new minimum wage rate per region. Additionally, the RTWPB sets the regional tripartite wage after reviewing the current cost of living in the region.
The goal of the RTWPB and NWPC is to set a fair minimum wage rate that allows minimum wage earners to afford their basic necessities and make the necessary wage adjustments when needed.
Wage Sectors in the Philippines
The Philippine employment landscape is further divided into many sectors to classify wage rates. Below are the common classifications:
- Agricultural Sector
- Plantation
- Non-Plantation
- Non-Agricultural Sector
- Manufacturing
- Construction
- Retail
- Services
- Hospitality
- Finance
- Other sectors
The Wage Rationalization Act
The Wage Rationalization Act in the Philippines mandated a legislated national wage hike to establish a fair and standardized national minimum wage. This applies to private sector workers across different regions.
Moreover, this law empowers regional wage boards to determine appropriate wage levels based on various factors. Such may include the cost of living, productivity, socio-economic factors, and demands from labor groups.
To ensure accuracy and fairness in setting the living wage, these boards conduct consultations with stakeholders. This includes the Philippine Statistics Authority, which gathers data and insights necessary for setting equitable wages reflective of regional economic realities.
Ultimately, this act aims to promote decent living standards and economic stability for salary workers throughout the country.
Regional Minimum Wages
The regional daily minimum wages in the agriculture sector and the non-agriculture sector often differs. Moreover, the agriculture sector is further divided into lantation and non-plantation. The minimum wage set for each region may also vary depending on which of these three industries the employee belongs to.
National Capital Region (NCR)
The minimum wage in the National Capital Region is usually the benchmark for the minimum wage in the Philippines. This year (2023), after the wage hike took effect, the MWR is Php 610.00 for the non-agriculture sector and Php 573.00 for the agriculture sector.
Related:
Other Regions
Cordillera Administrative Region (CAR)
Effective in 2024, the MWR is Php 400.00 for all sectors in CAR.
Region I – Ilocos Region
Currently, after the second tranche of the minimum wage increase, the non-agriculture sector with 30 or more employees gets a rate of Php 430.00 per day.
Furthermore, those with 10-29 employees get paid Php 402.00, those with less than ten employees, and those in the non-plantation agriculture sector get paid Php 402.00, while those in plantation get Php 402.00 per day.
Region II – Cagayan Valley
Effective 2024, the MWR for the non-agriculture sector and retail and service establishments employing no more than ten employees is Php 435.00 per day, while those in the agriculture sector have their MWR set at Php 415.00 per day.
Region III – Central Luzon
Except for the province of Aurora, the MWR for Region III ranges from Php 443.00 to Php 450.00 for non-agriculture. In addition, the agricultural workers get Php 404.00 to Php 420.00. Finally, Php 425.00 to Php 439.00 for retail and services.
Region IV – A – CALABARZON (Cavite, Laguna, Batangas, Rizal, Quezon)
The MWR in Region IV-A for non-agriculture is Php 520.00. For agriculture, on the other hand, the rate is Php 479.00.
See the updated minimum wages for Calabarzon.
Region IV – B – MIMAROPA (Mindoro, Marinduque, Romblon, Palawan)
Starting on the tenth of June 2022, the minimum wage rate in MIMAROPA will range from Php 329.00 to Php 355.00 across all sectors.
Region V – Bicol Region
Effective on the first day of December 2022, the MWR in the Bicol Region is Php 365.00 across all sectors.
Region VI – Across Western Visayas
Across all sectors, the minimum wage will range from Php 440.00 to Php 480.00.
Region VII – Central Visayas
After the wage order took effect on the 14th of June 2022, the MWR across all sectors in Region VII was set from Php 458.00 to Php 468.00.
Region VIII – Eastern Visayas Region
The current MWR in Region VIII is set at Php 375.00 to Php 405.00 for non-agriculture, agriculture, and retail and services.
Related: Updated minimum wages for the regions in Visayas
IX – Zamboanga Peninsula
For the Zamboanga Peninsula, the minimum wage rate is Php 381.00 across all sectors.
Region X – Northern Mindanao
The current MWR set for Northern Mindanao ranges from Php 393.00 to Php 405.00 for all sectors.
Region XI – Davao Region
The MWR for the Davao Region ranges from Php 438.00 to Php 443.00 across all sectors. This is after the full implementation of all tranches of the wage increase.
Region XII – SOCCSKSARGEN (South Cotabato, Cotabato, Sultan Kudarat, Sarangani, General Santos CIty)
Currently, Region XII has an MWR set at Php 390.00 for the non-agriculture, agriculture, and services and retail establishment sectors.
Region XIII – CARAGA (CARAGA Administrative Region)
Across all sectors, the MWR for CARAGA is set at Php 350.00.
BARMM (Bangsamoro Autonomous Region in Muslim Mindanao)
At present, BARMM has a minimum wage rate ranging from Php 306.00 to Php 341.00 across all sectors.
See the rest of the minimum wages in Mindanao.
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