Philippines Minimum Wage Laws

March 21st 2024

Guaranteeing fair compensation for workers is an important part of Labor Laws in the Philippines, to ensure social justice. The Philippines minimum wage laws uphold the rights and well-being of employees across industries, establishing a minimum standard of living for Filipino workers and protecting them from exploitation.

In our thorough guide, you will find what you need to know about the Philippines minimum wage laws. Understanding these rules, either as an employer or employee, is critical for promoting fair labor practices and economic stability.

This Article Covers:

What is the Minimum Wage in the Philippines?

The Wage Rationalization Act, Republic Act No. 6727, sets the applicable minimum wage rates per region, province, and industry sector. 

Although the minimum wage in the Philippines has increased to 610 Philippine pesos (PHP) per day, the daily wage rate varies from region to region. As of February 2024, here is a summary of the current regional daily minimum wage in the Philippines:

Region Minimum Wages
NCR PHP 573 to PHP 610
Region I PHP 402 to PHP 435
Region II PHP 415 to PHP 435
Region III PHP 422 to PHP 500
Region IV-A PHP 385 to PHP 520
Region IV-B PHP 369 to PHP 395
Region V PHP 395
Region VI PHP 440 to PHP 480
Region VII PHP 415 to PHP 468
Region VIII PHP 375 to PHP 405
Region IX PHP 381 to PHP 368
Region X PHP 401 to PHP 428
Region XI PHP 438 to PHP 443
Region XII PHP 382 to PHP 403
BARMM PHP 316 to PHP 361

The minimum wage rates established in Chapter V of Title II of Book Three of the Labor Code, as amended by the Wage Rationalization Act (the generally applicable minimum wage rates), apply to all workers and employees in the private sector, regardless of their position, designation, or status, and regardless of the method by which their wages are paid, except:

  • Household or domestic helpers, including family drivers and workers in the personal service of another.
  • Workers and employees in retail or service establishments regularly employ not more than 10 workers (when exempted from compliance with the Act for a period fixed by the Commission or Boards).
  • Workers and employees in Barangay Micro Business Enterprises.
  • Government sector employees.

Private sector employers are required to pay their rank and file employees a 13th-month pay on or before December 24 of each year, regardless of their position, designation, employment status, or wage payment method. The Department of Labor suggests that employers may give 50% of the 13th-month payment before the regular school year starts and the remaining 50% on December 24. The payment cannot be less than one-twelfth of the total basic salary earned by a worker. Employers must report compliance by January 15th each year.

History of the Philippines Minimum Wage Laws

The Philippine government has been working on establishing the Philippines minimum wage laws since June 1989. Before the Wage Rationalization Act, the only distinction in the national minimum wage was between agricultural and non-agricultural wages and, to a minor degree, between Metro Manila and outside Metro Manila (for non-agriculture) and between plantations and non-plantations (for agriculture).

When RA No. 6727 was signed into law, it was declared that wages would henceforth be set on a regional basis by regional wage boards. According to IBON Foundation, a non-profit development organization in the Philippines, as soon as RA 6727 was legislated, a PHP 25 wage hike was implemented. It was around a 39.1% increase and resulted in the non-agriculture basic wage reaching PHP 89 in all 17 regions. Since regionalization, minimum wage increases have varied widely between regions in terms of frequency and percentage.

Who is Eligible Under the Minimum Wage Laws in the Philippines?

The Philippines minimum wage policy applies to all workers in the private sector, regardless of their job title and employment status.

Wages must be paid at least once a month, but they can be paid every two weeks or twice a month at intervals of no more than 16 days. If wages are delayed owing to force majeure or circumstances beyond the employer’s control, the employer is required to pay the wages as soon as the force majeure or circumstances cease.

Lastly, the law prohibits interference in dispensing of wages, unauthorized wage deductions, withholding of wages without the worker’s consent, deductions to ensure employment, and retaliation against workers through the reduction of or refusal to pay wages. However, an employer may deduct from an employee’s wages when:

  • Authorized by law: Deductions for insurance premiums that are advanced by the employer on behalf of the employee, as well as union dues, if the employer has acknowledged the right to deduct or the employee has permitted it in writing.
  • Authorized by the employee: A written agreement by the employee for payment to a third party must be present, provided that the employer does not directly or indirectly gain any financial benefit from the transaction.

Exempt Employers from the Philippines Minimum Wage

Under Wage Order No. NCR-22, the following employers are exempt:

  1. Distressed establishments
  2. Retail or service establishments regularly employing no more than 10 workers
  3. Establishments adversely affected by calamities (e.g., natural and human-induced disasters)

However, for the employers to be exempted from the Philippine minimum wage, they should file an application with the Regional Tripartite Wages and Productivity Board. After careful consideration by the Board, the qualified applicant employer may be granted an exemption for a maximum period of 1 year.

If the decision was disapproved by the Board, it may be appealed to the National Wages and Productivity Commission within 10 days from the date the applicant received the decision.

Who is Responsible for Upholding the Philippines Minimum Wage Laws?

The National Wages and Productivity Commission (NWPC) is responsible for establishing rules and guidelines for determining appropriate minimum wage and productivity measures at the regional, provincial, and industry levels, as well as reviewing regional wage levels set by the Regional Tripartite Wages and Productivity Boards to ensure that they are consistent with prescribed guidelines and national development plans. Each region in the Philippines has its own Regional Tripartite Wages and Productivity Board, which sets minimum wage rates for their respective provinces or localities.

The Regional Board sets regional minimum wages to maintain living standards for employees’ health, efficiency, and wellbeing within the national economic and social development program. Factors considered include workers’ needs, living costs, wage levels, income distribution, employment generation, employer capacity, wage adjustment, consumer price index, and promoting rural investment and improved living standards. The minimum wage rates are based on the equitable distribution of income and wealth, employment generation, and employer capacity.

The recommendation can be rejected or approved by the Secretary of Labor and Employment, who then issues a Wage Order, subject to the President’s approval.

Compliance with Minimum Wage Laws in the Philippines

Under Republic Act 8188, employers who fail or refuse to comply with pay rate increases or adjustments are subject to legal penalties. Employers are liable to be fined between PHP 25,000 and PHP 100,000, imprisoned for two to four years, or both, at the discretion of the court.

Furthermore, the employer should pay an amount equal to double the underpaid benefits owed to the employees. If the offense is committed by a corporation, trust, firm, or organization, the responsible officers, which may include the president, vice president, CEO, general manager, managing director, or partner, are liable for imprisonment.

Employee Benefits for Minimum Wage Earners in the Philippines

Employee statutory benefits are legally mandated entitlements that should be provided by employers and regulated by government legislation. The benefits include:

  • National Health Insurance Program Healthcare: Health coverage, including PhilHealth and the Social Security System, is mandatory for employees. Individuals should contribute 2.75% of their principal income, which is split equally between the employer and employee.
  • Home Development Mutual Fund Pag-IBIG: This is a national savings plan for affordable housing. Employees and employers both contribute 2%. Pag-IBIG deposits are typically used to fund home loans, multi-purpose loans, disaster relief loans, and so on.
  • Bonus or 13th-Month Pay: The sum is comparable to 1/12 of an employee’s base wage for the year. If an employee has worked for less than a year, the bonus will be allocated accordingly.

Employers can offer other benefits as an additional perk to supplement compensation packages beyond the statutory standards.

  • Christmas Bonus: Employees are compensated in addition to their 13th-month payment to show appreciation for their services throughout the year.
  • Allowances: Although allowances are unusual in the Philippines, a few employees have begun to provide them. The most common allowances are for accommodation, transportation, medical care, and childcare, which are all tax deductible.

Minimum-wage earners in the Philippines are not eligible for personal income tax as their yearly income is below PHP 250,000.

How Often Does the Minimum Wage in the Philippines Increase?

The Regional Tripartite Wages and Productivity Boards may set and adjust the minimum wage rates on a regular basis (every 3 years) in order to improve them. Here are a few major considerations for how the Board decides to raise a region’s minimum wage:

  • Periodic assessment: The Regional Tripartite Wages and Productivity Board assesses minimum regional wages and determines if current wages are responsive to in-region economic conditions.
  • General public complaints: When public hearings and consultations show a general discontent with extraordinary hikes in prices of basic goods and services.
  • Unionized petitions: The Board received several petitions from the Federation of Free Workers, the Metal Workers Alliance of the Philippines, and the Association of Minimum Wage Earners and Advocates on recent price hikes.
  • Combined economic and social factors: This includes, but is not limited to, public discontent, socio-economic indicators, the declining purchasing power of the Philippine peso, increased poverty, and the impact of COVID-19.

Do All Regions in the Philippines Have the Same Minimum Wage?

The Board continuously regulates and assesses the minimum wage rates across the Philippine regions. In determining the minimum wage for each region, the Board considers the following factors:

  1. Demand for living wages;
  2. Wage adjustment in relation to the consumer price index;
  3. Changes or increases in the cost of living;
  4. The needs of employees and their families;
  5. The need to induce industries to invest in the countryside.

Important Cautionary Note

When making this guide, we have tried to make it as accurate as possible. However, we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you to seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred by the use of this guide.