Living Wage Act

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL -2 P5:30 SENATE Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT ESTABLISHING THE STANDARDS FOR A LIVING WAGE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, AS AMENDED EXPLANATORY NOTE Article XIII, Section 3 of the 1987 Philippine Constitution explicitly mandates the State to uphold the right of every worker to a "living wage" which is essential to provide all Filipinos with a just and humane standard of living. • Despite this constitutional guarantee, the reality for many workers tells a different story. The current minimum wage in Metro Manila is P645.00 per day, which translates to around P14,190.00 per month based on a 22-day work schedule. Yet, estimates from the IBON Foundation suggest that a family of five needs at least P1,222.00 per day or about P26,579.00 per month to live decently — almost twice the current minimum wage.' The disparity is even more evident in poorer regions.? This wage gap undermines the ability of workers to provide for the basic needs of their families, such as food, housing, healthcare, and education, perpetuating cycles of poverty. Moreover, the absence of a living wage worsens inequality and limits economic mobility. According to the Philippine Statistics Authority (PSA), approximately 15.5% of the population lived below the poverty line in 2023,3 a situation largely driven by 1 IBON Foundation. NCR Family Living Wage, as of March 2025. Published on 05 April 2025. Available at https://www.ibon.org/flw-ncr-2503/. Accessed on 23 April 2025. 2 IBON Foundation. Minimum Wage and Family Living Wage per region, as of March 2025. Published on 09 April 2025. Available at https://www.ibon.org/minimum-wage-and-family-living-wage-per-region-as-of-march- 2025/. Accessed on 23 April 2025. 3 PSA. 2023 Full Year Official Poverty Statistics of the Philippines. Published on 15 August 2024. Available at

inadequate wages. Legislating a living wage that is based on the cost of living would ensure that workers are compensated in a manner that reflects economic realities. It would boost household spending, increase worker satisfaction, and reduce reliance on social welfare. In addition, establishing a living wage would align with international labor standards. The International Labour Organization (ILO) has called for the provision of "an adequate living wage" which it describes as "the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work."4 Thus, this proposed measure seeks to amend the Labor Code of the Philippines to ensure that all Filipino workers receive compensation sufficient not only to meet basic needs but also to live with dignity. With more disposable income, households can spend more on goods and services, boosting local businesses and increasing tax revenues. Further, it promotes productivity and employee retention, reducing recruitment and training costs for employers. Ultimately, legislating a living wage is a step towards advancing the country's labor framework from subsistence-based wage standards to a rights-based and inclusive model that affirms the inherent worth of every Filipino worker. In view of the foregoing, the immediate passage of this bill is earnestly sought. https://psa.gov.ph/sites/default/files/phdsd/2023%20FY%200fficial%20Poverty%20Statistics%20Publication _15August2024.paf. Accessed on 23 April 2025. 4 ILO. Report of the Meeting of Experts on wage policies, including living wages. Published on 05 March 2024. https://www.ilo.org/sites/default/files/wcmsp5/groups/public/%40ed_norm/%40relconf/documents/meetingd ocument/wcms_915989.pdf. Accessed on 23 April 2025.

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session JUL -2 P5:30 SENATE Senate Bill No. _ Introduced by Senator JOEL VILLANUEVA AN ACT ESTABLISHING THE STANDARDS FOR A LIVING WAGE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, AS AMENDED Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Living Wage

Act."

SEC. 2. Article 124 of the Labor Code of the Philippines is hereby amended

to read as follows: "ART. 124. Standards/Criteria for minimum wage fixing. - The regional minimum wages to be established by the Regional Board shall [be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program] MEET THE LIVING WAGE STANDARDS IN THE REGION, WHICH SHALL ENSURE NOURISHMENT, CLOTHING, SHELTER, EDUCATION, HEALTH, AND GENERAL WELL-BEING OF EMPLOYEES AND THEIR FAMILIES. In the determination of such

regional minimum wages, the Regional Board shall, among other relevant factors, consider the following: (a) The [demand for living wages] ESTIMATED COST OF LIVING FOR A DETERMINED SIZE OF A FAMILY IN THE REGION; (b) Wage adjustment vis-à-vis the consumer price index; (e) The cost of living and changes or increases therein; [(d)] (C) The needs of workers and their families; [(e)] (D) The need to induce industries to invest in the countryside; [(A)] (E) Improvements in standards of living; [(g)] (F) The prevailing wage levels; [(h)] (G) [Fair return of the capital invested and e]Capacity to pay of employers; AND (i) Effects on employment generation and family income; and [i>] (H) The equitable distribution of income and wealth along the imperatives of economic and social development. XXX"

SEC. 3. Implementing Rules and Regulations. - Within thirty (30) days

from the effectivity of this Act, the Secretary of Labor and Employment shall, in consultation with the Tripartite Industrial Peace Council and other relevant stakeholders, promulgate the necessary rules and regulations to effectively implement the provisions of this Act. Failure of the relevant government agencies to promulgate the IRR within the specified period shall subject the heads of these government agencies to administrative penalties under applicable civil service laws. Should the IRR contain provisions that are contrary to this Act, the heads of the government agencies responsible for such provision, when done in bad faith or with gross negligence, shall be held administratively liable.

SEC. 4. Separability Clause. - If any portion or provision of this Act is

declared unconstitutional, the remainder hereof or any provisions not affected thereby shall remain in force and effect.

SEC. 5. Repealing Clause. - Any law, presidential decree or issuance,

executive order, letter of instruction, rule, or regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.

SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days after its

5 complete publication in the Official Gazette or in a newspaper of general 6 circulation. Approved,