Working Filipino’s real wage, purchasing power weakening under Duterte

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Research group IBON said that accelerating inflation is rapidly eroding the real wage and purchasing power of minimum wage earners in the National Capital Region (NCR).

Real wages show the actual value of wages after these are adjusted for inflation. After almost two years in power, the Duterte administration has only raised the minimum wage in the NCR once–in October last year–which increased this from Php491 in July 2016 to Php512 as of March 2018. The nominal Php21 increase has however not been enough to keep up with rising prices.

Inflation has been steadily accelerating since the start of the Duterte administration to reach a six-year-high of 3.7% in 2017. It is looking to become even higher this year at 4.8% already in the first quarter of 2018. Minimum wage earners have actually already lost Php16.80 per day with the real value of their wages, measured at 2012 prices, falling from Php466.70 in July 2016 to just Php449.90 in March 2018. The year 2012 is used as the reference period because this is the base year of the Philippine Statistics Authority (PSA) in computing the consumer price index (CPI) and inflation.

As it is, the NCR minimum wage of Php512 falls far short of the estimated Php973 family living wage (FLW) for a family of five, and even further short of the Php1,168 FLW for a family of six. The eroding purchasing power of workers is resulting in even lower standards of living for minimum wage earners.

IBON said that the government should urgently address the grossly insufficient wages of workers, which is even being rapidly eroded by high inflation. Immediate and concrete steps include: implementing the Php750 national minimum wage demanded by workers’ groups; suspending implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Package One, which is driving prices up and amending this to become genuinely progressive; and enforcing price controls such as on staple food items. ###

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