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Wage Order No.

NCR-18
Approved

: 06 September 2013

Affirmed

: 18 September 2013

Published

: 19 September 2013
The Philippine Star

Effectivity

: 04 October 2013

IR Published : 12 October 2013


The Manila Times

Regional Tripartite Wages and Productivity Board National Capital Region

Outline of Presentation
1. The Process
2. WO NCR-18: Salient Features
3. Other Details
4. Views on WO NCR-18

Regional Tripartite Wages and Productivity Board National Capital Region

Regional Tripartite Wages and Productivity Board National Capital Region

Approved by the Board

: September 6, 2013

Affirmed by the Commission : September 18, 2013


Published

: September 19, 2013


: The Philippine Star

Effectivity

: October 4, 2013

Implementing Rules Signed

: October 09, 2013

Published

: October 12, 2013


: The Manila Times
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Regional Tripartite Wages and Productivity Board National Capital Region

TUCP Wage Petitions


Mendoza (filed on July 1)
P 456.00
9.63
27.36
48.00
P 541.00

MW since 2012
2.1% price increase
from March 2012 to
Feb.2013
Projected 6% price
increase (March to
Dec. 2013)
Equity Supplement
(P2/yr. x 24 yrs.)

Wage Increase is P541.00


- 456.00
P 85.00/day

Herrera (filed on June 7)


P 404.00
31.50
21.78
72.00
P 529.00

MW in July 2010
7.8% price increase
from July 2010 to April
2013
Projected 5% price
increase (May to Dec.
2013)
Equity Supplement
(P3/yr. x 24 yrs.)

Wage Increase is P529.00


- 446.00
P 83.00/day

Both petitions asked for an across-the-board increase


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Regional Tripartite Wages and Productivity Board National Capital Region

Formulation Timeline
a. TUCP Petitions filed on:
April 3, 2013 (Dismissed for premature filing)
June 7, 2013
July 1, 2013 (Dismissed Petition refiled)
b. Consultations conducted on:
July 5, 2013
Philippine Trade and Training Center, Manila
(130 participants from 77 organizations/companies)
July 17, 2013
Occupational Safety and Health Center (OSHC), Quezon City
(170 participants from 93 organizations/companies)
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Regional Tripartite Wages and Productivity Board National Capital Region

Formulation Timeline
c. Public Hearing:
August 8, 2013
OSHC, Quezon City
(108 participants)

d. Wage Deliberation:
September 6, 2013

Regional Tripartite Wages and Productivity Board National Capital Region

Criteria for Minimum Wage Fixing


Minimum Wage

Needs of
Workers and
their Families

Capacity to
Pay

Comparable
Wages and
Incomes

Requirements
of Economic
and Social
Development

Art. 124. LCP, as amended; IRR


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Regional Tripartite Wages and Productivity Board National Capital Region

Regional Tripartite Wages and Productivity Board National Capital Region

The Wage Order mandates:


P10.00/day Basic Wage increase effective

October 4, 2013
P15.00/day COLA integration into the BW

effective January 1, 2014 (from the


P30.00/day COLA under WO No. NCR-17)
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Regional Tripartite Wages and Productivity Board National Capital Region

a. Effective October 4, 2013


Basic Wage
WO No.
NCR-17

Basic Wage
WO No.
NCR-18
(+ P10.00)

Non-Agriculture

P426.00

P436.00

P30.00

P466.00

Agriculture

P389.00

P399.00

P30.00

P429.00

Private Hospitals w/ Bed


Capacity of 100 or less

P389.00

P399.00

P30.00

P429.00

Retail/Service Establishments
employing 15 workers or less

P389.00

P399.00

P30.00

P429.00

Manufacturing Establishments
regularly employing less than
10 workers

P399.00

P399.00

P30.00

P429.00

Regional Tripartite Wages and Productivity Board National Capital Region

COLA

Minimum
Wage Rates
WO No.
NCR-18

b. Effective January 1, 2014


Basic
Wage
October 4,
2013

Basic Wage
January 1,
2014
(+ P15.00)

COLA
January 1,
2014
(- P15.00)

Minimum
Wage Rates
January 1,
2014

Non-Agriculture

P436.00

P451.00

P15.00

P466.00

Agriculture

P399.00

P414.00

P15.00

P429.00

Private Hospitals w/ Bed


Capacity of 100 or less

P399.00

P414.00

P15.00

P429.00

Retail/Service
Establishments employing
15 workers or less

P399.00

P414.00

P15.00

P429.00

P399.00

P414.00

P15.00

P429.00

Manufacturing
Establishments regularly
employing less than 10
workers

Regional Tripartite Wages and Productivity Board National Capital Region

Employer Cost/month
WO No. NCR-17

WO No. NCR-18
October 4, 2013

P426.00 BW
P436.00 BW
30.00 COLA
30.00 COLA
P456.00/day P466.00/day
Monthly Wage

January 1, 2014

P451 BW
15 COLA
P466.00/day

P11,780.00

P12,038.33

P12,038.33

SSS + EC

858.00

858.00

858.00

Philhealth

137.50

137.50

137.50

Pag-Ibig

100.00

100.00

100.00

P12,875.50

P13,133.83
(+2.0%)

P13,133.83
(+2.0%)

Regional Tripartite Wages and Productivity Board National Capital Region

13th Month Pay


(Affected by date of BW Increase)
a.

2012 Jan to May (5mos) : P404 BW


June to Dec (7mos) : P426 BW
5
P404x310
13th Mo Pay =
x
12
12

P10,769.00

b.

9
12

2013 Jan to Sept (9mos) : P426BW


Oct. to Dec. (3mos) : P436BW
9
P426x310
3
12
12
12
x
+
13th Mo Pay =

P426x310
+
12

P436x310
12
x

= P11,070

(+2.8%)*
c.

2014 Jan to Dec


(12mos) : P451 BW
P451x310
(Assuming there
12is no BW increase)
13th Mo Pay =

Increase of

13th

= P11,651 (+8.3%)**

Mo. Pay between 2012 to 2013

** Increase of 13th Mo. Pay between 2012 to 2014


Regional Tripartite Wages and Productivity Board National Capital Region

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Workers Take Home Pay/month


WO No. NCR-17

P426.00 BW
30.00 COLA
P456.00/day

Monthly Wage

WO No. NCR-18
October 4, 2013

January 1, 2014

P436.00 BW
30.00 COLA
P466.00/day

P451 BW
15 COLA
P466.00/day

P11,780.00

P12,038.33

P12,038.33

SSS

400.00

400.00

400.00

Philhealth

137.50

137.50

137.50

Pag-IBIG

235.60

240.77

240.77

P11,006.90

P11,260.06
(+2.3%)

P11,260.06
(+2.3%)

a. OT Pay/hr

426 X1.25= P66.56


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436 X1.25= P68.12 451 X1.25= P70.07


8
8
(+2.3%)
(+5.9%)

b. NDP/hr

426 X1.10= P58.57


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436 X1.10= P59.95 451 X1.10= P62.01


8
8
(+2.4%)
(+5.9%)
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Regional Tripartite Wages and Productivity Board National Capital Region

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Regional Tripartite Wages and Productivity Board National Capital Region

COVERAGE / BASIS

All MINIMUM WAGE EARNERS in


the private sector in the NCR
regardless of their position,
designation or status, and
irrespective of the method by which
their wages are paid.
For normal working hours (8 hours
per day)

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Exclusions

Household or domestic helpers


(RA 10361);
Persons in the personal service of
another, including family drivers ;
Workers of registered BMBEs with
Certificates of Authority (RA 9178).
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Sec. 4 Application to Contractors


In case of contracts for construction, security and
similar services:
The Wage increase and COLA integration shall

be borne by the principals or clients


The existing contract is deemed amended
The contractor shall be jointly and severally

liable with the principal or client if the latter fails


to pay the prescribed wage rates
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Regional Tripartite Wages and Productivity Board National Capital Region

Sec. 5 Application to Private Educational Institutions

For schools that increased tuition fees in SY 2013-2014:


Workers share in tuition fee increase shall be

credited as compliance with the Wage Order


Any shortfall shall be given starting SY 2014-2015

For SY 2014-2015
All Schools shall implement the Wage Order

whether they increased tuition fees or not


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Regional Tripartite Wages and Productivity Board National Capital Region

IR, Rule II, Sec. 9. Mobile and Branch Workers


The MW rates of workers, who, by the nature of

their work have to travel, shall be those applicable in


the domicile or head office of the employer
The MW rates of workers working in branches or

agencies of establishments in or outside the NCR


shall be those applicable in the place where they are
stationed.
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Regional Tripartite Wages and Productivity Board National Capital Region

IR, Rule II, Sec. 10. Transfer of Personnel

The transfer of personnel to areas outside the


Region shall not be a valid ground for the
reduction of the wage rates being enjoyed by
the workers prior to such transfer. The workers
transferred to other Regions with higher wage
rates shall be entitled to the minimum wage
rates applicable therein.
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Regional Tripartite Wages and Productivity Board National Capital Region

Sec. 8 Exemptions
Upon application with the Board 75 days from the date of
publication of IRR. (10/19/13, Manila Times; Dec. 26, 2013)
Distressed Establishments
Retail and Service establishments employing not more than ten
(10) Workers
3. Establishments whose total assets inclusive of loans but exclusive
of the land on which the office, plant and equipment are located, are
not more than P3M
4. Establishments adversely affected by natural calamities
1.
2.

EXEM PTI ON I S FOR A M AXI M UM PER I OD OF


ONE YEAR FR OM EFFECTI VI TY OF THE W AGE OR DER
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Regional Tripartite Wages and Productivity Board National Capital Region

Sec. 10 Creditable Wage Increase


For Organized Firms

For Unorganized Firms

Wage increase granted

Wage increase granted

within 3 months prior to

within 5 months prior to

effectivity (i.e. July 3 to

effectivity (i.e. May 3 to

October 3, 2013) may

October 3, 2013) may

be credited, if specified

be credited

in CBA

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Regional Tripartite Wages and Productivity Board National Capital Region

Sec. 10 Creditable Wage Increase


In both cases:

Does not include anniversary, merit increase, and


those resulting from regularization or promotion of
employees

If the increase granted is less than the prescribed


adjustment, the employer shall pay the difference

An increase given in the form of an allowance


shall be integrated into he basic wage of the
workers
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Regional Tripartite Wages and Productivity Board National Capital Region

Sec. 11 Effects on Existing Wage Structure


Wage Distortion - happens when the implementation of a
mandated minimum wage increase results in:
Elimination

or disappearance of a wage differential

or
Severe contraction

Elimination - the previous wage differential or gap no longer exists.


Severe contraction contraction by more than 50% of the
previous wage differential or gap in pay between two groups of
workers in an establishment (Metrobank and Trust Company
Employees Union ALU-TUCP vs. NLRC, 226 SCRA 268)
Cf. Art. 124, Labor Code, as amended
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Regional Tripartite Wages and Productivity Board National Capital Region

Severe Contraction

CONTRACTION =

(Previous Wage Difference) (New Wage Difference)


x 100
Previous Wage Difference

If the Result is more than 50%, there is a Wage Distortion

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Regional Tripartite Wages and Productivity Board National Capital Region

Correction for Wage Distortion


P500
(P500 P470) (P500 P479.70)
CONTRACTION =
x 100
(P500 P470)
= 32.3% (There is no Wage Distortion)

P470 +P9.70
(P470 P456) (P470 P466)
CONTRACTION =
(P470 P456)
= 71.4% (There is Wage Distortion)
Correction

= P456

New Wage

X P10 = P9.70
P470
= P470 + P9.70 = P479.70

P456 +P10 BW Increase


Regional Tripartite Wages and Productivity Board National Capital Region

x 100

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Other Provisions

The other provisions are standard


provisions contained in the 18
Wage Orders issued since 1990.

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Regional Tripartite Wages and Productivity Board National Capital Region

WO, Sec. 12 & IR, Rule V. Productivity and


Performance Incentive Programs
In order to sustain rising levels of wages and enhance
competitiveness, labor and management as partners are
encouraged to adopt productivity improvement schemes
that will improve the quality of life of workers and in turn
enable them to produce more and earn more, such as time
and motion studies, good housekeeping, quality circles,
labor and management cooperation as well as implement
gain-sharing and other performance incentive programs.
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Regional Tripartite Wages and Productivity Board National Capital Region

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Regional Tripartite Wages and Productivity Board National Capital Region

Labor Sector and other allied groups


Barya Barya Lang! Mumo!

Labor groups started the clamor for a


P125/day across-the-board wage
increase in 1999. Since then, the NCR
Board has increased the Minimum Wage
12 times for a total of P268 per day or
more than double P125.
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Regional Tripartite Wages and Productivity Board National Capital Region

The P268 come from these Barya Barya


WO No. NCR-

Amount

7 (1999)

P 25.50

8 (2000)

26.50

9 (2001/02)

30.00

10 (2004)

20.00

11 (2005)

25.00

12 (2006)

25.00

13 (2007)

12.00 (+ Integration of P30 COLA)

14 (2008)

20.00

15 (2010)

22.00

16 (2011)

22.00

17 (2012)

30.00 (+ Integration of P22 COLA)

18 (2013)

10.00 (+ Integration of P15 COLA)

Regional Tripartite Wages and Productivity Board National Capital Region

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ECOP and other business groups


NCR has the highest Minimum Wage in ASEAN
Philippines
NCR
IV-A
III
VII

9.39 10.21
5.71 7.83
6.38 7.53
5.82 6.83

Thailand
Bangkok

6.89 9.31

Indonesia
Jakarta

2.52 6.67

Vietnam

2.21 3.16

Cambodia

2.03

Myanmar

0.51
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Regional Tripartite Wages and Productivity Board National Capital Region

Dep. Gov. D. Gunigundo, BSP

(Philstar, 9/16/13)

The wage hike in NCR will not affect prices much.


Thats within the broad assumption of the Bangko
Sentral. Our inflation forecast already incorporates
the adjustment in wages for NCR.
DDG E. Esguerra, NEDA

(Business Mirror, 9/10/13)

The wage increase in NCR would have a bigger


impact on employment than on inflation. It could
negatively impact on the expansion plans of some
firms.
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Regional Tripartite Wages and Productivity Board National Capital Region

Senator Vicente Sotto III

(Inquirer.net, 9/19/13)

The recent P10 increase in the minimum wage is too small.


Wages have invisibly decreased due to the rise in prices of
basic commodities. Improved business earnings have not
cascaded on its ownThose who have less in life should
have more in law. Explanatory Note, SB 1645, mandating the grant of 14th
month Pay to all government and non-government employees

BusinessWorld, Sept. 9, 2013 Headline


Wage hike lowest so far for Metro Manila
Labor and business groups both normally reject mandated
minimum wage hikes, with the former complaining the
amounts are not enough and the latter decrying the added
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cost.
Regional Tripartite Wages and Productivity Board National Capital Region

Henry J. Schumacher, ECCP

(BusinessWorld, 9/09/13)

This seems to be a fair decision, staying close to


inflationI dont think it will lead to layoffs but it may
well affect the hiring of more people.
John D. Forbes, AmCham

(BusinessWorld, 9/09/13)

(The wage increase is) fair [M]inimum wages in


the Philippines is still not as competitive as that of
Vietnam and Cambodia. It is still much higher than
Burmas and about the same as Jakartas.
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Regional Tripartite Wages and Productivity Board National Capital Region

Ramon R. del Rosario, MBC

(BusinessWorld, 9/09/13)

(our group would have no objection to the P10 increase if was


the result of) adequate tripartite representation...With GDP
growth above 7% for the last four quarters, most large
companies should be able to cope with the proposed wage
increase but some small- and medium-sized businesses may
find the increase challenging We should also be constantly
conscious of the need to remain competitive in labor costs
against our Asian neighbors.

Edgardo Lacson, ECOP (BusinessWorld, 9/09/13)


the P10 should have been only P7...non-compliance
carried steep penalties for employers.
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Regional Tripartite Wages and Productivity Board National Capital Region

Alan A. Tanjusay, TUCP

(BusinessWorld, 9/09/13)

The P10/day increase is outrageous! This amount cannot


even buy half a kilo of rice or take a worker to work and
back home... This amount is a joke, a painful joke to
working class who worked so hard to improve our
economy We will definitely appeal the decision.

Wilson Fortaleza, PM

(BusinessWorld, 9/09/13)

Janet Napoles steals P10 billion from the peoples money and
the government offers P10 in coins to workers as a
consolation.
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Regional Tripartite Wages and Productivity Board National Capital Region

Salamat po...

2nd Flr DY International Bldg, San Marcelino cor


Gen. Malvar Streets, Malate, Manila
Telephone Nos: 527-51-55
400-67-65
Email add: wage_ncr@yahoo.com.ph
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Regional Tripartite Wages and Productivity Board National Capital Region