My Thoughts on the Minimum Wage Law of the Philippines

“I’m sorry, ma’m,” my sales agent texted me, “But I can’t get to work today.”

“What do you mean can’t get to work?” I asked.

“Oh, I don’t have transport money to get to work,” he texted back. “So I can’t come in today.”

My response: “……”

I pay my sales staff the minimum wage + reimburse their transport allowance + a commission for all their sales collected. This is the same as anybody who works in a fast food chain, plus

The daily minimum wage in the Philippines is Php 446.00 (or USD 11.00) per day. This is for the agricultural sector for eight hours worth of work. Agricultural sectors earn less than this.

Click here for the complete chart.

Gape at the fact that the daily wage is a mere cost of a meal in McDonalds in the US, but the normal Filipino can subsist with this allowance.

For example, in our company, our working days are from Monday till Saturday, so six days a week from 9:00am to 6:00pm. There is a one-hour lunch break from 12:00pm till 1:00pm, and a 15 minute break in the afternoon. Breaks are sacred here in the Philippines that you can never make anyone work in between these times.

So given the six-days-a-workweek schedule, there is an average of 26 days in a month, or Php 11,600.00 monthly salary (or USD 285.00). From this money, you spend:

• Php 2,500 (or USD61) for housing – be it renting from a relative (common!) or from a landlord. It’s usually a small room with shared bathroom.
• Php 120 (USD 3) for daily food, or Php 3,800 a month for food for yourself.
• Php 50 (USD1.20) per day for transport, or Php 1,500 a month.
• Php 500 for call and text load on your cellphone.

So overall, that is already Php 8,300.00 (USD 204) in monthly expense give or take.

Or Php 3,300 (USD 80) left for savings and miscellaneous expense. This is assuming you are single and living alone. If you have a family and mouths to feed, the financial burden is even greater.

That is why people here borrow too much. My employees call it “cash advance” but it’s plain old borrowing. If they have no money to borrow, they will go to a 5/6 shop, which is even worse — you borrow a “5” and you pay for a “6” or a whooping 20% interest at the maturity period!

And before you complain about the lowness of the payscale, imagine how it was before the minimum wage law has been given! There are still a lot of small companies that pay its people half of this by the way — or specifically, Php 250-300 (USD 6-9) per day.

No wonder the rate of graft and corruption in the Philippines is high — people aren’t really getting paid a lot of money.

So yes, not having enough money for prepaid load or transport can be quite common in the Philippines. There has been numerous instances where my people couldn’t even report or call me just because they don’t have enough money.

And yet, the lack of money is still not an excuse.

If my sales agent does not get to work, he will NOT be paid. If he takes enough absences, we kick him out. In the end of the day, we are still running a business, and we are paying him fairly and treating our employees quite well.

Hence, the lack of money to get to work may be a valid reason BUT it is not an excuse.

The next day, I explain to my employee my logic.

Put it this way, if he gets to work, he will get paid. Absences are a no-no, and are unpaid (of course). Given his role, if he makes a lot of sales, he will get a commission.

So the more work he does, the more sales he will get. The more sales he will get, the more he will get paid in payday.

And my role as his boss is to just pay him fairly whatever is his due. This is way better than other employers who no longer pay their people the right minimum wage, and are delayed for a few weeks before they release the paychecks.

Yes, it is tough, but the alternative is even tougher. Being unemployed sucks.

Also, having no money in the Philippines is like cutting your hands and feet.

You cannot do anything, and you have to beg for money. And nobody wants to be obligated and be in debt with someone else. It is not uncommon to have people borrow around up to 6 months to a year of their salary. 🙁

Don’t worry, I used to be shocked too on how much people subsist. But in the end, it’s all about competencies and background too.

70-80% population are paid small, but those who are well educated are paid even better. For example, a 21-year old graduate from my university (which is Top 3 here) earns at least Php 30,000 (or USD 730) a month. That is 2.5x the minimum wage.

And this is just an inexperienced 21 year old. What more once he/she gets more experience?

So complain all you want. Welcome to the Philippines. This is reality.

And before you rant and rave on the cruelties of Manila, think about it this way, there is still the other side of the story. In other words, take a look as well on the side of the employer. The boss is not as bad as you think.

But that is the topic of another story.

Have a great weekend everyone!

**Thanks to Masonywu for suggesting this topic. Feel free to suggest more topics as well.**