In July 1989, the Philippine Congress enacted into law Republic Act No. 6727, also known as the "Wage Rationalization Act."
The Act established a new mechanism for minimum wage determination through the creation of the National Wages and Productivty Commission ( NWPC) and the Regional Tripartite Wages and Productivity Boards (RTWPBs) in all regions of the country.
The NWPC is an attached agency of the Department of Labor and Employment (DOLE).
Justly remunerated and productive Filipino workforce in globally competitive enterprises.
Set minimum wage that protects workers' welfare.
Promote enterprise and workers' productivity
The NWPC is committed to:
- Provide quality service to the workers and enterprises on wages, incomes and productivity through policy and program development and implementation.
- Comply with all applicable legal requirements
- Continually improve all processes and systems to meet requirements of relevant interested parties; and
- Enhance the competencies of its talents.
Performing one's duties and responsibilities according to the work ethics in public service.
Acting with a sense of urgency and providing timely, relevant and pioneering solutions to ensure quality service to internal and external clients.
Working with determination and dedicationto exceed clients' expectation.
Ensuring open government initiatives and upholding the values of tripartism, participation and partnership.
Generating and translating ideas into goods or services that create value.
Cultivating synergy with the organization and among partners and stakeholders towards a common goal.
- Determine minimum wages at the regional,provincial and/or industry levels; and
- Promote productivity improvement and gainsharing schemes, particularly among micro, small and medium enterprises.
NWPC formulates policies and guidelines on wages, incomes and productivity and exercises technical and administrative supervision over the RTWPBs.
With 17 RTWPBs (including ARMM) responsible for setting minimum wages and promoting productivity improvement programs.
The NWPC and RTWPBs provide the following services on wages, incomes, and productivity:
Research and Policy
- Advise the President and Congress on matters relating to wages, incomes, and productivity
- Determine and fix minimum wage rates at the regional,provincial, and industry levels
- Undertake researches and studies on wages and productivity
- Formulate policies and guidelines on wages, incomes, and productivity
Training and Consulting
Information and Publication
- Provide training courses on quality and productivity (Q&P) improvement for company owners, managers, supervisors, and workers of qualified small and medium enterprises (SMEs).
- Extend firm level consulting and technical assistance on the actual implementation of Q&P improvement projects for beneficiary-SMEs.
- Promote gainsharing schemes at the firm level.
- Render information services in the areas of wages, incomes, and productivity to walk-in and phone -in clients, as well as through the NWPC website and library.
- Disseminate publication and information materials on minimum wages and Q&P improvement and gainsharing.
- Conduct wage clinics or one-on-one consultation with clients on wage related concerns.
- Policies/Guidelines/Standards Formulation on Wages and Productivity
- Implement the two-tiered wage system (2TWS) along the objectives of adequate protection to income of vulnerable workers and improved productivity and competitiveness within a total incomes policy framework. Floor or minimum wage shall continue to be set by the RTWPBs under the 2TWS while productivity or performance-based pay in accordance with the prescribed guidelines;
- Conduct facility evaluation and time-and-motion studies/work improvement in support of wage fixing and productivity improvement mandate; and
- Enhance research, advocacy and database development towards greater focus on the 2TWS.
Technical Assistance and Advocacy Services on Wages and Productivity
- Intensify capacity building of enterprises towards greater adoption of innovative practices and environmental sustainability;
- Create a multi-agency pool of competent productivity specialists through sustained capacity building on productivity, innovation, and enterprise development;
- Sustain the advocacy on Productivity Toolbox as a strategy to attract more MSMEs to engage in productivity improvement programs and gainsharing;
- Adopt innovative advocacy strategies towards boosting public awareness and securing support on policies and programs on wages, incomes and productivity; and
- Intensify/broaden networking alliances on wages, incomes and productivity through convergence and partnerships with strategic (DOST, DTI, DOT, DA, academe) and social partners both at local and international levels
- Strengthen program management for efficient public service through improved planning and execution processes;
- Implement continuous capacity building through staff development and training
- Focus on core governance functions and improve performance and service delivery, consistent with the objectives of EO 366 thru QMS; and
- Promote employees’ safety and welfare by undertaking programs on health maintenance, cultural and GAD-related activities.
Republic of the Philippines
Department of Labor and Employment
NATIONAL WAGES AND PRODUCTIVITY COMMISSION
NWPC Policy Guidelines
Series of 2005
POLICY DIRECTIONS AND PROGRAM THRUSTS : 2006-2010
Pursuant to Article 121 b and c of the Labor Code as amended by Section 3 of Republic Act No. 6727, the National Wages and Productivity Commission hereby adopts the following policy directions and program thrusts to govern the proceedings in the Commission and the Regional Tripartite Wages and Productivity Boards in the determination of minimum wages and the promotion of productivity improvement and gain sharing in the regions:
Section 1. The Commission and the Regional Boards shall continue the policy of minimum wage determination pursuant to Republic Act No. 6727 or the Wage Rationalization Act issued in July 1989.
Section 2. In this context, the minimum wage rates to be set by the Regional Boards shall be rooted on the basic concept of providing workers with "safety net" protection against unduly low wages. Said minimum wage rates shall be confined as much as possible to protecting the lowest paid workers from the vagaries of the labor market. Furthermore, the use of the salary ceiling and across-the-board methods in adjusting minimum wages shall be discouraged.
Section 3. The determination of wages above the minimum shall be left to collective bargaining in the organized sector or employer-employee negotiations in the unorganized sector. The minimum wage levels to be set by the Regional Boards may serve the purpose of providing workers and employers with a reference figure as their guide in salary and wage negotiations. Payment of wages above the minimum may be also based on productivity and/or performance of the enterprise.
Section 4. Following the safety net approach, the present minimum wage structures shall be simplified. Existing differentials based on such factors as employment size, level of capitalization, amount of gross sales, hospital bed capacity, hiring date and population size, shall be discouraged. Thus, wage differentiation shall be based on such broad classifications as non-agriculture, agriculture and retail/service establishments employing not more than 10 workers.
Section 5. The Regional Boards shall continue to implement the existing policy on exemption as embodied in NWPC Guidelines No. 1, series of 1996 (Rules of Exemption from Compliance with Mandated Wage/COLA Increases Granted by the Regional Tripartite Wages and Productivity Boards), until such time that the Commission shall have reviewed and revised the Rules on Exemption in order to make the same more relevant to the requirements of the tripartite sectors.
Section 6. In response to the requirements for business flexibility and emerging global trends, the Regional Boards are encouraged to consult with employers and workers groups in selected industries in order to forge tripartite consensus on wages and wage-related benefits, and on improving the productivity and competitiveness of business enterprises. To this end, the Regional Boards may issue wage advisories to serve as a guide to the parties in drawing up their wage proposals, subject to guidelines to be issued by the Commission.
Section 7. In order to boost the adoption of productivity improvement programs and gain sharing schemes at the enterprise level, the Commission and the Regional Boards shall provide the necessary information and extend technical assistance to micro, small and medium enterprises that may want to set up its ISTIV-Productivity Awareness Program (ISTIV-PAP). Business enterprises may share in the cost of training and consultancy services on ISTIV-PAP and other productivity technologies, subject to applicable existing rules and regulations.
Section 8. With the overriding commitment to provide workers and their families the means to improve their standard of living, and recognizing that such cannot be attained by increasing wages alone, the Commission shall adopt a total income approach in wage policy formulation. Thus, it shall advocate for the provision of adequate social services in such areas as education, health care, housing and transportation and the formulation of sound pricing and taxation policies that enhance incomes and standards of living.
Section 9. This Guidelines shall take effect fifteen (15) days after its publication in a newspaper of general circulation.
Manila, Philippines, 07 December 2005.
(Sgd) LUZVIMINDA G. PADILLA
Undersecretary - DOLE
(Sgd) AUGUSTO B. SANTOS
Acting Director General - NEDA
(Sgd) DAVID L. DIWA (Sgd) FRANCISCO F. FLORO
Member, Labor Sector Member, Employer Sector
(Sgd) CEDRIC R. BAGTAS (Sgd) EDUARDO T. RONDAIN
Member, Labor Sector Member, Employer Sector
(Sgd)REBECCA J. CALZADO
The NWPC is composed of the following:
- Secretary of Labor and Employment-ex-officio Chairman;
- Director-General of the National Economic and Development Authority (NEDA) as ex-officio Vice Chairman;
- Two representatives each from the worker and employer sectors (appointed by the President for a term of five years) as Members; and
- Executive Director of the NWPC Secretariat-ex officio member.
The Commission is assisted by its secretariat.
Each RTWPB is composed of the following:
- DOLE Regional Director as ex-officio Chairman;
- Regional Directors of the NEDA and Department of Trade and Industry as ex-officio Vice Chairmen; and
- Two representatives each from the worker and employer sectors (appointed by the President for a term of five years) as Members.
The boards are assisted by their respective secretariat.