On the History and Impact of Wage Setting in the Philippines

Ensuring feudal, semi-feudal and semi-colonial exploitation of the Filipino people characterizes
the history of wage setting in the Philippines. Through the first wage law RA 602 enacted in 1951 to the
present RA 6727 enacted in 1989, the Philippine State has guaranteed that the Filipino working people
remain enslaved to the drive of the local ruling classes and imperialism to increase their profits.

Since the 1950s, the productivity of the people has increased annually. However, wages paid to
direct producers averaged only 30% of the wealth produced from 1951 to 1998. The biggest part of the
unpaid value produced or about 38% is spent to finance the parasitic lifestyles of the ruling classes,
which constitutes only 3% of the countrys population.

About 12 percent is spent to finance the constant deficits in the colonial trade and to fund
government operations, more than 60 percent of which are spent on payments of local and foreign
debts and lost to corruption. Finally, only 20% is used for the development of the means of production.

Consequently, the economy has remained agrarian, backward and pre-industrial. Meanwhile,
the lives of the people the industrial proletariat, semi-proletariat, poor peasants and lower middle
peasants who rely on selling their labor power to augment their farm income, and the petty bourgeoisie
have progressively deteriorated.

History of Wage-Setting in the Philippines

A common feature of all the wage laws (except during Martial Law when Marcos unilaterally
determined wage levels) is the appointment of wage boards. The wage boards track developments in
the local economy and recommend or determine therefrom the levels of wages to grant the working
people. Clearly, these are created to ensure the promotion of the interests of imperialism and the local
ruling classes during deliberation of wage matters. The members of the wage boards mainly come from
representatives of the government and private property owners themselves. Representatives from the
public or from the labor sector are appointed to provide a democratic facade. However, the blatantly
exploitative nature of all the wage laws betrays either the puppetry or impotence of the so-called labor
representatives.

The setting of wages evolved in a manner that conforms to the escalating crisis of the semi-
colonial semi-feudal economy and of the world under imperialism. The changes took place in three
distinct periods; pre-Martial Law or from 1951 1972, Martial Law or from 1972 1986, and from 1987
to the present.


Pre-Martial Law Wage Laws and Their Impacts

Five wage laws were legislated during this period RA 602, 3844, 4180, 4707 and 6129. The
Philippine Congress and Senate enacted these laws. A distinct attribute of these pre-Martial Law wage
laws is their recognition of the most oppressive feudal relations like tenancy where landlords arbitrarily
determine the share of their tenants, feudal servitude and other forms of feudal rent. These ensured
that the vast majority of the working people remain enslaved by feudalism. These also set the precedent
for the pro-feudal bias of succeeding wage laws.

From the first law RA 602 enacted in 1951, workers in landlord estates (from 12 hectares up)
were discriminated to receive 37.5% less than their counterparts in the non-agriculture sector. The law
also prescribed that the tenants that comprise the majority of workers in these estates are not covered
by it. Tragically, it did not recognize or it glossedover the fact that all family members of tenants exert
labor to produce commodities in the estates. It also safeguarded the right of landlords to exact feudal
servitude from their tenants by exempting domestic servants from its coverage. Finally, it allowed
landlords to deduct up to 86% or PhP1.50 of the PhP1.75, 88% or PhP1.75 of the PhP2.00, and 90% or
PhP2.25 of the PhP2.50, for rent like board and lodging etc. from wages granted by the law for the
corresponding 1
st
, 2
nd
and 3
rd
years.

Since then, by reactionary legal fiat, the poor peasants, lower middle peasants and farm
workers in feudal estates have become the most oppressed section of the Filipino working classes. By
the 3
rd
wage law enacted in 1965, the PhP37.5% difference between the wages of agriculture workers
and non-agriculture workers increased to more than 41%. The 5
th
wage law enacted in 1970 decreased
the difference by one percentage point or to 40%.

These wage laws and other state instruments boosting feudal (i.e. share-tenancy and feudal
servitude, etc.) and semi-feudal relations (i.e. wage-labor relations with rents eating up 86-90% of
wages) ensured that:

1. The economy remains backward and agrarian. Denied of their just share from the fruits of their
labor, the peasants to overcome starvation are forced to rely on petty production for direct
consumption including small-scale backyard gardening and animal husbandry, food gathering
from the land, forests, mountains, rivers and the sea. With no surplus to invest in upgrading
production tools they are forced to produce handcrafted agricultural instruments. The utility of
these primitive instruments some work animals, bolo, sickle, plough, hoe, shovel, bag and sack,
etc. handcrafted by the peasants for the feudal estates are in reality part of the land rent.

As all these products do not pass through the market, these are not reflected in the national
accounts that understate by an incredulously wide margin the share of agriculture in the GDP.
This provides the Philippine State ammunition to assert that the Philippine economy has
continuously industrialized. More importantly, the wage boards use the understated labor
productivity in the agriculture sector as basis to insist lower wage levels for workers therein.

2. The main productive force, the starved peasantry, serves as an endless source of labor power
desperate to find jobs as seasonal farm workers in feudal and imperialist-owned estates
producing commodities like copra, sugar, banana, pineapple etc. for export. Or as low paid
workers in bourgeois comprador and or imperialist-owned manufacturing and service firms in
the cities or in extractive industries like mining and logging.

In later years, a big part of this huge army of excess laborers became prime commodities for
export. From the 1970s, exporting of millions to work in imperialist-owned firms in other third
world countries like the Middle East began. Exporting women to become domestic helpers in
places like Hong Kong or prostitutes in countries like Japan began in the 1980s. From the 1990s
commenced the export of professionals from the petty bourgeoisie especially nurses, doctors,
midwives and other health workers to serve as low-level medical personnel in imperialist states.


Regional Tripartite Wages and Productivity Board
The Regional Tripartite Wages and Productivity Boards ("Regional Boards") were created in all regions,
including autonomous regions as may be established by law, with 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 guidelines issued by the National
Wages and Productivity Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of their functions,
objectives and programs, and to collect and compile data on wages, incomes, productivity and
other related information and periodically disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and
intention of the Labor Code;
(e) To receive, process and act on applications for exemption from prescribed wage rates as may
be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out their mandate
under the Labor Code.
Implementation of the plans, programs and projects of the Regional Boards shall be through the
respective regional offices of the Department of Labor and Employment within their territorial
jurisdiction. The Regional Boards shall have technical supervision over the regional office of the
Department of Labor and Employment with respect to the implementation of said plans, programs and
projects.
Prohibition against injunction
No preliminary or permanent injunction or temporary restraining order may be issued by any
court, tribunal or other entity against any proceedings before the National Wages and Productivity
Commission or the Regional Boards.
Composition of Regional Boards
Each Regional Board to be headed by its chairman shall be assisted by a Secretariat, and
composed of the following:
Chairman - Regional Director of the Department of Labor and Employment
Vice-Chairmen - Regional Directors of the National Economic and Development Authority and
Department of Trade and Industry
Two (2) members each from workers and employers sectors who shall be appointed by the
President of the Philippines, upon recommendation of the Secretary of Labor and Employment,
to be made on the basis of the list of nominees submitted by the workers and employers sectors,
respectively, and who shall serve for a term of five (5) years.
The National Wages and Productivity Commission shall determine the offices/headquarters of the
respective Regional Boards.