Business Cost NewsLabor NewsPart 2 News: Becoming More Competitive

Philippine wages rank third highest in region

This is an article repost.

THE COST of labor in the Philippines remains one of the highest in Southeast Asia, according to the latest online report of the National Wages and Productivity Commission (NWPC).

Data from the policy-making body showed that as of end-June, workers in Metro Manila get a daily minimum wage of P389.00 to P426.00 or $8.93 to $9.78, using the exchange rate at the time.

This makes Philippine labor the third most expensive in Southeast Asia, next to Singapore, where workers get $21.57 to $64.71 per day, and Malaysia, whose daily minimum wage ranges from $5.50 to $17.36.

“A few years ago, we were among the countries that offered cheap labor. However, due to yearly wage hikes, we have outpaced our neighbors,” said Sergio R. Ortiz-Luis, Jr., honorary chairman of the Employers Confederation of the Philippines.

“Rather than creating jobs, we are losing jobs because of our expensive labor,” Mr. Ortiz-Luis added.

Economist Cid L. Terosa of the University of Asia and the Pacific said the country has become less competitive in manufacturing, but not in professional services.

“Relatively expensive labor becomes a disadvantage to the country if we talk about manufacturing activities that involve assembly or mass production, but in activities involving professional services, our wages are competitive as they are not as high as those in developed countries,” Mr. Terosa said.

Among the 13 Asia-Pacific countries included in the NWPC’s list, Australia has the highest minimum wage at $127.15 a day. Also with double-digit daily minimum wages are New Zealand ($68.00 to $85.00), Japan ($62.13 to $78.13), South Korea ($30.40) and Taiwan ($20.61).

Labor is cheapest in Vietnam, where workers are paid 36,666.67 dong to 51,666.67 dong, or $1.78 to $2.51 per day.

It is followed by Cambodia, where workers are entitled to at least $2.03 a day, China ($2.58 to $5.78), Indonesia ($2.83 to $5.22), and Thailand ($4.89 to $6.67).
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By: Judy Dannibelle T. Chua Co
Source: Business World, Aug. 18, 2011
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