RP to consult with ILO, others on wage system

THE DEPARTMENT of Labor and Employment (DoLE) will consult with the International Labor Organization (ILO) and other countries on the planned shift to a two-tiered wage system.

Labor Secretary Rosalinda D. Baldoz said consultations will help determine whether the first tier will be a national minimum wage or industry-based minimum pay where salaries differ across industries. The second tier is based on productivity.

“We have asked the ILO for assistance in doing policy research on the proposed wage system and to provide labor experts from Singapore who can discuss industry-based minimum wage systems with us,” Ms. Baldoz said on the sidelines of the launch of the Model Overseas Filipino Worker Family of the Year Award in Intramuros, Manila.

She explained that Singapore has been “very successful” in implementing a two-tiered wage system, with industry standards as the first tier and productivity-based bonus the second tier.

The United States, on the other hand, has a national minimum wage and other wage levels as defined by different states and collective bargaining agreements, she added.

The National Wages and Productivity Commission (NWPC) will implement the new wage system, but “if needed, I am willing to support and recommend legislation that would implement the two-tiered wage system,” Ms. Baldoz told BusinessWorld by phone.

Ms. Baldoz earlier tasked Ciriaco A. Lagunzad III, NWPC executive director, to start broad consultations and studies on the two-tiered wage system. — Nathaniel R. Melican, Businessworld