The Department of Labor and Employment (DOLE) will closely monitor inflation to ascertain its impact on workers' wages following the implementation of the 12% R-VAT beginning February 1, 2006.

Inflation is one of the indicators in determining whether or not adjustments have to be made on the wages of workers in private establishments. The National Economic Development Authority (NEDA) usually announces the inflation rate on a monthly basis. The data serve as one of the factors to be considered in the wage fixing process by the regional wage boards, under the supervision of the National Wages and Productivity Commission (NWPC).

The most recent round of wage increases began in May 2005. The boards issued 17 wage orders, 10 of which were adjustments without consultation, while seven were based on petitions for wage increases filed by labor groups.

Labor groups usually have to wait before they can file petitions for wage increases with the wage boards because the law prohibits issuance of a new wage order within 12 months of the previous one. However, wage increases may be granted within the year from the latest round of wage increases if economic data shows that R-VAT has resulted in drastic price increases.

The NWPC has reported that it has one pending petition, from labor groups in Region 6, asking for a P75 across-the-board wage increase. The petition was filed on January 25, 2006.

The wage boards regularly assess the wage situation in the regions. They study the effects of the rise of consumer prices, power, and transportation on the purchasing power of the workers. They act on petitions for wage increase or initiate the issuance of a wage order if a supervening condition warrants an increase. A supervening condition is characterized by abnormal movements in the key socio-economic indicators affecting wages, such as extra-ordinary increase in the prices of basic goods and commodities.

...back to 9 February 2006


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DOLE to monitor impact of R-VAT to workers' wages

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