In 2022, the Philippine Statistics Authority (PSA) reported that the food threshold for a family of five in 2021 was P8,379. This means that spending more than P18.62 per meal would prevent you from being classified as “food poor” by the government.
More than two years later, while the food threshold has been adjusted, data from the National Economic and Development Authority shows that the standard remains low at P64 per day, or P21.33 per meal.
The food bundle used to determine the threshold is designed by the Food and Nutrition Research Institute (FNRI). It includes the cheapest local foods that meet 100% of the average person’s energy and protein needs and 80% of other nutrients. This bundle varies by region; for instance, it might include rice and boiled fish in some areas or corn and boiled pork in others. In the National Capital Region (NCR), the bundle features scrambled eggs, rice, and coffee with milk for breakfast; boiled monggo with dilis and malunggay, rice, and banana for lunch; and fried tulingan, rice, and boiled kangkong for dinner, plus pandesal for merienda.
While raising the minimum wage might provide temporary relief for workers, it alone will not eradicate poverty. The root causes of poverty are complex, involving issues such as inflation, limited access to education and healthcare, and a lack of sustainable employment opportunities, which cannot be solved solely through wage increases.
Therefore, to effectively address these gaps, business icon Rene Romero has proposed a robust solution for managing the challenges of wage increases. Romero is the past president of the Pampanga Chamber of Commerce and Industry, Inc. (PamCham) and currently serves as the director for Infrastructural Development.
Instead of demanding unrealistic minimum wage hike, he drafted a more balanced approach to enhance workers’ living standards while also offering security and stability, all without placing excessive strain on the economy.
His proposal suggests that businesses should cover 20% of the wage hike, while the government would subsidize the remaining 80%. This subsidy could take various forms, including cash, in-kind contributions, and reduced premiums for mandatory benefits.
Romero’s proposal could be enacted through legislative reforms aimed at reallocating poverty alleviation programs towards wage subsidies instead of traditional aid.
The plan encompasses the development of Implementing Rules and Regulations (IRR) for the Government Wage Subsidy Program, aiming to prevent wage distortions and ensure its effectiveness.
Romero advocates for a strategic shift away from conventional aid schemes and short-term solutions, such as “ayuda” or patronage politics, in favor of direct wage subsidies. He argues that this approach will not only empower Filipinos but also minimize corruption, thereby guaranteeing that government assistance is efficiently and equitably distributed to those in genuine need. By instituting well-defined IRR, the program can achieve its objectives of fairness and transparency, ultimately leading to a more impactful and streamlined support system.
Romero elaborates daily wage earners would receive their base salary from employers, with an additional government-subsidized amount provided through direct methods such as bank transfers. He further suggests that the government could issue direct payments, like stimulus checks, to enhance purchasing power until financial stability is achieved, businesses thrive, and the economy strengthens, in line with the Philippine Development Plan: “Ambisyon Natin 2040.”
Romero stressed that wage subsidies could significantly boost economic activity by preserving consumer spending, ensuring business continuity, and safeguarding jobs, thereby helping to keep unemployment rates low.
As chairman and president of The Romac Group of Companies, Romero was invited by the Department of Labor and Employment (DOLE) National Wages and Productivity Commission Regional Tripartite Wages and Productivity Board – III (RTWPB-3) to participate in and submit an employer sector survey for minimum wage review. He was also asked to develop plans and programs related to wages, income, and productivity improvement in the region. This consultation for the Bulacan, Pampanga, and Tarlac cluster will be held on August 20, 2024, at the CDC Training Hall – Health and Sanitation Department, Clark Freeport Zone, Pampanga.
As a long-time advocate for business and infrastructure development, Romero has dedicated over 30 years to analyzing economic conditions to improve worker productivity and efficiency. Despite these efforts, he noted that ongoing challenges such as inflation, rising living costs, and other financial pressures continue to hinder workers’ effectiveness and morale, leading to decreased productivity in the workplace.
Romero highlighted that daily wage earners often face financial stress due to insufficient wages, making it challenging to cover essential living expenses. Based on interviews with these workers, who strive for a modest yet stable life, Romero compiled data on their typical monthly expenses for a family of four (two parents and two children).
He provided empirical data reflecting real-life experiences rather than theoretical models, offering a clear picture of their financial reality. According to the data, the monthly expenses for a family of four include PHP 18,300 for food (PHP 600 per day x 30.5 days), PHP 2,000 for house rent, PHP 2,000 for utilities (water and electricity, excluding internet), PHP 2,600 for transportation allowance, PHP 3,000 for education allowance, PHP 2,000 for personal expenses (such as clothing and health items), and PHP 2,000 for an emergency fund or savings. In total, these monthly expenses amount to PHP 31,900, which translates to a minimum daily wage requirement of approximately PHP 1,026.23.
“To genuinely support our workers, it is crucial to ensure they achieve a decent standard of living, encompassing access to nutritious food, quality healthcare, good education, emergency funds/savings, and overall well-being. This goal aligns with the Philippine Development Plan: ‘Ambisyon Natin 2040’, which envisions a future where Filipinos enjoy ‘Matatag, Maginhawa at Panatag na Buhay’ (stable, comfortable, and secure life),” Romero remarked.
“By 2040, this plan aims for Filipinos to enjoy a well-rooted lifestyle with adequate resources for daily needs, secure housing, and the freedom to pursue personal goals, all supported by a clean, efficient, and fair government,” he added.
Romero also acknowledged, “Increasing the minimum wage in Region-III to PHP 1,000 daily could present significant challenges for businesses, particularly for micro, small, and medium enterprises (MSMEs). With 15 years left to achieve the goals of ‘Ambisyon Natin 2040’, it’s crucial to critically assess whether these objectives are genuinely attainable. If we fail to address the needs of Filipinos, especially daily wage earners who represent a significant portion of the workforce, there is a considerable risk that we might not realize the vision of Ambisyon Natin 2040.”