Higher pay for workers expected next year

MANILA, Philippines - Workers can look forward to better wages and higher standard of living in the coming year.

Ciriaco Lagunzad, executive director of the National Wages and Productivity Commission (NWPC), said the government has started implementing programs that could provide high wages and raise the standard of living for all Filipinos nationwide, particularly workers.

By next year, Lagunzad said they expect half of commercial establishments in every region to implement a productivity-based wage system.

“Our target next year and I believe we can do is that between 30 to 50 percent of commercial establishments in each of the 17 regions to be adopting gain sharing or productivity-based wage system,” Lagunzad said in an interview.

He noted that 85 percent of commercial establishments in Region IV are already adopting gain-sharing policy in compliance with the newly adopted two-tiered wage system.

The NWPC chief cited the advisory for the specifically percentage-based performance of the industry in granting productivity-based bonus to workers.

 “Region IV pilot-tested the two-tiered wage system and it’s working,” he said.

According to him, Labor and Employment Secretary Rosalinda Baldoz initiated the adoption of the two-tiered wage system to provide better income for all workers.

He denied published reports that Filipino workers are getting lower wages.

The International Labor Organization (ILO) earlier reported a slowdown in wage growth despite the increasing productivity rate worldwide. As a result, the ILO said employers are benefitting more than the workers.

But Lagunzad said the Philippines is an exemption to the global trend since Filipino workers are gaining from the increasing productivity due to the newly adopted two-tiered wage system.

He said the additional income that the workers are receiving through productivity-based wage system has not been accounted for in the survey.

 “While the global trend in wage growth is declining, it does not mean Filipino workers are getting less. We are an exemption to the trend,” he said.

Although there has been a reduction in real wages and purchasing power, Lagunzad said the government has been working hard to restore real wages.

 “Annually there has been an effort to restore real wages, however, this is being balanced to the capacity of the economy to absorb the wage increase,” he explained.

“The secret of a good wage system is in the setting of a correct balance,” he added while noting that the ILO has been assisting the NWPC in coming out with a wage system that would address workers’ needs.

Lagunzad said the NWPC and the DOLE have been promoting productivity-based wage because minimum wage can be coercive.

Through the productivity-based wage, he said workers are given the opportunity to negotiate and good performance gets rewarded.