Press Release
April 23, 2008

RP can afford new wage hike -- Legarda
Survey says workers in Manila have world's third cheapest wages

The Philippines can definitely afford a new round of wage increases for private sector workers, and still stay highly competitive, Sen. Loren Legarda, Senate economic affairs committee chairperson, said Wednesday.

Legarda cited the 2008 survey by the global financial services giant UBS AG*, which showed that workers in Manila receive the third cheapest wages worldwide.

Only workers in Jakarta and Mumbai get wages that are lower than those received by laborers in Manila, according to the UBS survey that covered 70 cities around the globe.

Based on the UBS poll, the top 10 cities where workers enjoy the highest wages are, ranked No. 1 to 10: Zurich, Geneva, Luxembourg, Berlin, Dublin, Frankfurt, Auckland, Los Angeles, Munich and Oslo.

The 10 cities where workers have the lowest wages are, ranked No. 61 to 70: Bucharest, Mexico City, Nairobi, Kiev, Bangkok, Sofia, Delhi, Manila, Mumbai and Jakarta.

Legarda said Filipino workers in both private and public sectors definitely deserve "upward pay rate revisions" to enable them to cope with soaring food and fuel prices.

"We are absolutely in favor of a new round of wage adjustments with respect to private sector workers, with the exact amount of the increase to be ascertained by the regional wage boards," Legarda said.

"If we look at India, wages there are rising an annual rate of 17 percent, so we still have the comparative advantage in terms of cost of labor," Legarda said.

Like India, the Philippines has been attracting global corporations that require ample supply of inexpensive, English-speaking staff, particularly in information technology-enabled services, such as business process outsourcing.

Based on the UBS survey, India has two cities -- Delhi and Mumbai -- that offer some of the world's lowest wages.

"If there is any issue that the government should address right away, it should be the unusually high cost of electricity," Legarda said, adding that local power rates are abnormally elevated, even with soaring fuel prices.

"Our large manufacturing and export-oriented industries desperately need access to cheaper electricity," Legarda said.

As to public sector workers, the senator said she also favored the P3,000 across-the-board salary increase being pushed by the Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE).

COURAGE is the umbrella organization of 90 public sector unions with 150,000 members.

Two large business groups earlier expressed support for Malacañang's directive to the wage boards, for them to promptly convene and determine as to what extent regional floor pay rates should be increased.

The Makati Business Club and the Employers' Confederation of the Philippines acknowledged that the wage boards may have to consider new pay adjustments on account of the rising cost of living.

Various labor groups have already filed petitions seeking wage increases raging from P50 to P150.

The existing daily minimum wage in Metro Manila, which has the highest regional floor pay, is P362.

However, the National Wages and Productivity Commission has determined the "living wage" for a family of six in Metro Manila to be at least P858 per day.

The UBS survey was based on an index with New York wages as the guidepost, at 100 points.

Based on the survey, workers in 24 cities around the world receive wages that are higher than those obtained by employees in New York.

The 24 cities with 143.7 to 101.3 points are: Zurich (143.7), Geneva (135.8), Luxembourg (130.6), Berlin (128.6), Dublin (125.7), Frankfurt (124.3), Auckland (121.8), Los Angeles (119.8), Munich (119.5), Oslo (117.3), Helsinki (117.2), Sydney (116.5), Chicago (115.1), Brussels (114.3), Toronto (113.8), Copenhagen (111.3), Vienna (110.9), Montreal (109.7), Lyon (106.1), Nicosia (105.2), Barcelona (101.8), Miami (101.7), Stockholm (101.5), and Amsterdam (101.3).

Employees in 45 cities receive wages that are lower than those obtained by workers in New York.

The 45 cities with 97.4 to 18.1 points are: Madrid (97.4), Tokyo (94.5), London (91.5), Dubai (88.2), Paris (87.7), Milan (87.4), Athens (84.8), Johannesburg (77.9), Taipei (76.9), Rome (73.3), Manama (69.5), Kuala Lumpur (68.7), Seoul (66.6), Singapore (63.9), Prague (62.1), Lisbon (61.8), Ljubljana (60.4), Buenos Aires (57.1), Sao Paulo (55.3), Bratislava (49.7), Hong Kong (48.9), Tallinn (46.4), Lima (46.3), Moscow (44.4), Santiago de Chile (44.2), Vilnius (42.2), Budapest (41.3), Istanbul (40.8), Rio de Janeiro (39.3), Warsaw (39.1), Riga (38.4), Shanghai (35.8), Caracas (33), Bogota (31.9), Beijing (29.7), Bucharest (29.6), Mexico City (28.5), Nairobi (28), Kiev (27.4), Bangkok (27.1), Sofia (25.4) Delhi (23.4), Manila (22.7), Mumbai (21.7), and Jakarta (18.1).

*Zurich, Switzerland-based UBS AG (formerly Union Bank of Switzerland, which merged with Swiss Bank Corp. to form UBS AG), is one of the largest banking and financial services companies in the world. With a global client base, UBS is present in all major financial centers worldwide, with offices in 50 countries. In 2007, the Americas accounted for 38% of operating income, followed by Switzerland 27% rest of Europe/Middle East/Africa 27%, and Asia-Pacific 8%.

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