ASSESSMENT OF

PHILIPPINE LABOR MARKET

Joe Caranto
Ian Galicia
Ghint Pernes
Rev Ramos
Justin Sy
PHILIPPINE LABOR MARKET
 This study analyzes labor market performance in the
Philippines from the perspective of workers’ welfare. It argues
that pervasive in-work poverty is the main challenge facing
labor policy. Poverty is primarily due to low earning capacity
of the poor and to their limited access to regular and
productive jobs. Behind these are the two interrelated root
causes of in-work poverty - low education of the poor, and
the scarcity of productive job opportunities. The labor market
is segmented into good and bad jobs, with the poor working
in the latter. They hold jobs that are informal, temporary or
casual, and low-paid.
LABOR FORCE
 The labor force is the number of people who
are employed plus the unemployed who are looking
for work. The labor pool does not include the jobless
who aren't looking for work. For example, stay-at-home
moms, retirees, and students are not part of the labor
force. Discouraged workers who would like a job but
have given up looking are not in the labor force either.
To be considered part of the labor force, you must be
available, willing to work, and have looked for a job
recently.
EMPLOYMENT
Employment is a relationship between two parties,
usually based on a contract where work is paid for,
where one party, which may be a corporation, for
profit, not-for-profit organization, co-operative or
other entity is the employer and the other is the
employee.
UNEMPLOYMENT
Unemployment occurs when a person who is actively
searching for employment is unable to find work.
Unemployment is often used as a measure of the
health of the economy. The most frequent measure of
unemployment is the unemployment rate, which is the
number of unemployed people divided by the number
of people in the labor force.
UNDEREMPLOYMENT
 Labor that falls under
the underemployment classification includes those
workers who are highly skilled but working in low
paying jobs, workers who are highly skilled but
working in low skill jobs and part-time workers who
would prefer to be full time.
PERFORMANCE
PHILIPPINE PERFORMANCE REPORT

The Philippines climbed a

notch to 56th from previous
year’s 57th, in overall
ranking of 137 economies
(Global Competitiveness
Report 2017-2018)

We could make large gains in

competitiveness in we could
improve our performance in
infrastructure, health, and
education.
LABOR MARKET EFFICIENCY

Ranking in terms of
flexibility of wage,
capacity to attract talent,
and in female participation
in labor force have
improved.

Hiring and firing practices,

pay and productivity, and
county capacity to retain
talent, have yet to improve.
 EMPLOYMENT RATE (JANUARY 2018)
According to NEDA, employment rates surged in January
2018 as the Philippine labor market continued to thrive on
the back of sustained economic growth.

Article was published last March 7, 2018

LABOR AND EMPLOYMENT
INDICATORS
EMPLOYMENT SHARE BY SECTORS
“The Philippine economy has been growing rapidly,
at an annual growth rate of 5% over the past five
years. Such decent growth in gross domestic product,
however, did not translate into an increase in
household income. Wage income declined
in real terms.”

Author/Editor: Xubei Luo

SUSTAINED PH ECONOMIC GROWTH RESULTS IN BOUYANT LABOR MARKET
HTTP://WWW.NEDA.GOV.PH/2018/03/07/SUSTAINED-PH-ECONOMIC-GROWTH-RESULTS-IN-BOUYANT-LABOR-
MARKET/

THE GLOBAL COMPETITIVENESS REPORT (2017-2018)

HTTP://ILSDOLE.GOV.PH/THE-GLOBAL-COMPETITIVENESS-REPORT-2017-2018/

PHILIPPINE PERFORMANCE REPORT

HTTPS://ONEDRIVE.LIVE.COM/?AUTHKEY=%21AA7YX0PVWNVGGIS&CID=DDB0904599F0629B&ID=DDB0904599
F0629B%2114110&PARID=DDB0904599F0629B%21721&O=ONEUP

PHILIPPINES GDP GROWTH RATE

HTTPS://TRADINGECONOMICS.COM/PHILIPPINES/GDP-GROWTH

PHILIPPINES - LABOR MARKET REVIEW: EMPLOYMENT AND POVERTY

HTTP://DOCUMENTS.WORLDBANK.ORG/CURATED/EN/561291468294345143/PHILIPPINES-LABOR-MARKET-
REVIEW-EMPLOYMENT-AND-POVERTY
WORKER’S WAGES
AND WELFARE
WHAT IS THE
RULE ON
WAGES?
 Under Philippine law, wages
are remunerations or earnings
for services rendered.

 Employers and employees

may agree on rate but should
not fall below the minimum
wages set by the regional
tripartite wages and
productivity boards (RTWPB)
which has jurisdiction over the
place of work.
Region Non - Agriculture Agriculture - Plantation Agriculture - Non
Plantation
NCR 454.00 – 491.00 454 454
CAR 255.00 – 285.00 255 – 270 255 – 270
Region I 213.00 – 253.00 233 227
Region II 260.00 – 300.00 280 280
Region III 238.00 – 357.00 298 – 334 298 – 334

Region IVA 219.00 – 362.50 267- 337 267 – 317.50

Region IVB 210.00 – 280.00 230 – 235 230 – 235

Region V 248.00 – 265.00 248 248

Region VI 256.50 – 298.50 266.50 266.50
Region VII 275.00 – 353.00 275 – 335 275 – 335

Region VIII 235.50 – 262.00 241 235

Region IX 235.00 – 280.00 255 235
Region X 291.00 – 318.00 291 – 306 291 – 306

Region XI 286.00 – 317.00 307 307

Region XII 255.00 – 275.00 257 257
Region XIII 248.00 – 268.00 268 268
WORKER’S
WELFARE
• 13TH MONTH PAY
• OVERTIME
• RETIREMENT PAY
• NIGHT SHIFT DIFFERENTIAL (NSD)
• PREMIUM PAY
• HOLIDAY PAY
• NIGHT SHIFT DIFFERENTIAL
• SERVICE CHARGES
• SERVICE INCENTIVE LEAVE
• PARENTAL LEAVES
• OTHER LEAVES
• SEPARATION PAY
• GROSS BENEFITS & DE MINIMIS BENEFITS
• SOCIAL SECURITY SYSTEM
• PHILHEALTH
• HOME DEVELOPMENT MUTUAL FUND
If taxable income is: Tax due is:

Not over P 10,000 5%

Over P 10,000 but not over P 30,000 P 500 + 10% of the excess over P
10,000

Over P 30,000 but not over P 70,000 P 2,500 + 15% of the excess over P
30,000

Over P 70,000 but not over P 140,000 P 8,500 + 20% of the excess over P
70,000

Over P 140,000 but not over P 250,000 P 22,500 + 25% of the excess over P
140,000

Over P 250,000 but not over P 500,000 P 50,000 + 30% of the excess over P
250,000

Over P 500,000 P 125,000 + 32% of the excess over P

500,000
• HTTPS://WWW.ECOMPAREMO.COM/INFO/HERES-A-FULL-LIST-OF-MANDATORY-
BENEFITS-FOR-REGULAR-EMPLOYEES-IN-THE-PHILIPPINES/
• HTTPS://WWW.DAYANANCONSULTING.COM/PAYROLL-SALARY-COMPENSATION-
BENEFITS-PHILIPPINES/
• HTTP://PINOYWORKERS.WEEBLY.COM/WAGE-AND-MONETARY-BENEFITS.HTML
 POLICIES IN THE
PHILIPPINE LABOR
MARKET
 LABOR CODE OF THE
PHILIPPINES
 STANDS AS THE LAW GOVERNING EMPLOYMENT PRACTICES AND LABOR RELATIONS IN

THE PHILIPPINES.

 ENACTED ON LABOR DAY OF 1974 BY PRESIDENT FERDINAND MARCOS. (MAY 1, 1974)

 IT PRESCRIBES THE RULES FOR:

• HIRING AND TERMINATION OF PRIVATE EMPLOYEES

• THE CONDITIONS OF WORK (MAXIMUM WORK HOURS AND OVERTIME)

• EMPLOYEE BENEFITS (HOLIDAY PAY, THIRTEENTH MONTH PAY AND RETIREMENT PAY)

• THE GUIDELINES IN THE ORGANIZATION AND MEMBERSHIP IN LABOR UNIONS AS

WELL AS IN COLLECTIVE BARGAINING.

 POLICIES ON:
 MINIMUM WAGE

• VARIES FROM ONE REGION OF THE COUNTRY TO ANOTHER

• CURRENT MINIMUM WAGE IN NCR IS _

 WORK HOURS AND OVERTIME

• SHOULD NOT EXCEED EIGHT (8) HOURS A DAY

• AN EMPLOYEE WHO RENDERS WORK IN EXCESS OF 8 HOURS A DAY IS ENTITLED TO OVERTIME

PAY (DEPENDS ON THE NATURE OF THEIR DUTIES AND RESPONSIBILITIES).

 NIGHT SHIFT DIFFERENTIAL

• AN ADDITIONAL COMPENSATION OF AT LEAST 10% OF AN EMPLOYEE’S APPLICABLE WAGE RATE

IS PAYABLE TO EMPLOYEES WHO PERFORM WORK BETWEEN 10 P.M. AND 6 A.M. OF THE

FOLLOWING DAY. (DEPENDS ON THE NATURE OF THEIR DUTIES AND RESPONSIBILITIES)

 HOLIDAYS:

 REGULAR HOLIDAYS
• EMPLOYER SHOULD PAY ITS EMPLOYEES,
SPECIAL HOLIDAYS
THEIR REGULAR DAILY WAGE FOR ANY
• “NO WORK NO PAY”
UNWORKED REGULAR HOLIDAY.

• WORK DONE SHALL BE PAID 200% OF • WORK DONE FOR THAT

EMPLOYEE’S SALARY FOR THAT DAY BY THE
EMPLOYER. DAY SHALL BE PAID AN
• NEW YEAR’S DAY
• MAUNDY THURSDAY
ADDITIONAL 30% OF
• GOOD FRIDAY
EMPLOYEE’S SALARY.
• EIDUL FITR
• EIDUL ADHA
• ARAW NG KAGITINGAN
• LABOR DAY
• BENIGNO S.
• INDEPENDENCE DAY AQUINO JR. DAY
• NATIONAL HEROES DAY • ALL SAINTS
• BONIFACIO DAY
• CHRISTMAS DAY
• LAST DAY OF THE
• RIZAL DAY YEAR
 Rest days

• Employees have the right to have a 24 consecutive hours of rest day after every

6 days of work

 Leave benefits:

• Service incentive leave (5 days)

• Maternity leave (60 days normal – 78 days for caesarian)

- For every pregnant employee whether married or unmarried

• Paternal leave (7 days)

- All married male employees to allow husband lend support to his wife in nursing her

newborn child.
 MEAL PERIOD

• Meal period given should not be less than 60 minutes or 1 hour time-off for regular meals

of employees which is non-compensable.

 13TH MONTH PAY

• Given to all rank and file employees (must work at least 1 month during a calendar year)

• 1/12 of total basic salary earned for the year

• The required 13th month pay should be paid not later than 24 December of each year

 RETIREMENT PAY

• The amount given an employee who has reached the age of 60 years for optional

retirement and 65 years old for compulsory and who has served the company for at least

5 years in the service.

• Minimum retirement pay = 22.5 days x daily rate x number of years of service
 ISSUES IN THE
PHILIPPINE LABOR
MARKET
OUTPUT GROWTH AND EMPLOYMENT
• In the past years, the GDP of the Philippines had grown steadily. During

these periods of growth, there was a slower pace of growth in

employment. This "lagging" may be due to the extreme weather

disturbances the country experienced. Considering that a large part of

the labor force is employed in agriculture, this is valid.

• Another reason is the difference between GDP and employment with

respect to their sectorial structures.

• Lagging could also be viewed with distinction to full-time and part-time

employment
LABOR PRODUCTIVITY

• Total Factor Productivity (TFP), the efficiency in use of both labor and capital,
is important because labor income depends on labor productivity growth. This
growth is the average product of labor which correlates with labor’s
contribution to enterprise revenue and profits.

• It is important to educate the population and invest in human development

and research and development to improve TFP
UNDEREMPLOYMENT, OVERSEAS EMPLOYMENT

• With the declining earnings, people are looking for additional hours of work
(underemployed), or going abroad (overseas employment) or choose to be
self-employed.

• Also shows how they are not content with the quality of employment.

• It was reported that 1.423 million Filipinos were deployed overseas

• This mitigates the unemployment problem but also poses moral hazard
problems, reducing labor force participation in the family.
YOUTH UNEMPLOYMENT, JOB AND SKILL MISMATCH,
EDUCATED UNEMPLOYED

• More than half of the unemployed youth are stuck due to lack of job
opportunities, lack of skills and the competition with older ones. This lack of
training and skills and incompetence may be due to poor education, which
shows that indeed, education must be improved

• There is the job and skill mismatch. Even with the high unemployment rate,
there are actually jobs that are not filled because there are no applicants
who have the right qualifications
GOVERNMENT PLANS
AND ACTIONS
 INTRODUCTION
• With the Filipino work force the main stakeholders being catered to, in 2011, the national
government of the Philippines with its department of labor and employment (DOLE), in
collaboration with the social partners led by the national tripartite advisory committee
(NTAC) on decent work, other government agencies, civil society and international
organizations, undertook A consultative process to develop the Philippine labor and
employment plan 2011-2016. The LEP, A “tripartite-plus” plan aligned with the Philippine
Development Plan 2011-2016, provides the consolidated strategic direction for labor and
employment in the medium-term.
• With the implementation period of the LEP coming to a close and to prepare for the
transition to the next medium-term development planning cycle, the dole, with support from
the International Labour Organization, held a series of consultation and capacity-building
activities to assess the implementation of the existing plan and develop the proposed
Philippine labor and employment plan 2017-2022.
• The government’s development plan in order to address the needs of the labor market can
be summed up into a 10 point agenda focusing on key aspects of employment, labor
relations, labor standards, and social dialogue as well as governance
 EMPLOYMENT
AGENDA

• Increase competitiveness and the ease of doing business

• Promote rural and value chain development toward increasing
agricultural and rural enterprise productivity and rural tourism
• Invest in human capital development
• Promote science, technology and creative arts to enhance innovation
and creative capacity
• EXISTING POLICIES AND PROGRAMS
Employment Facilitation Skills / Professional Development

- Enhanced Phil Jobnet - Training-for-Work Scholarship

- Public Employment Services Program (TWSP)
- Labor Market Information - Technical and Vocational Education
- Career Guidance and Employment and Training (TVET), including
Coaching Assessment and Certification

Youth-Bridging Programs Competitiveness and Productivity

- Special Program for the Employment of - Two-Tiered Wage System (TTWS)

Students (SPES) - Productivity Toolbox
- JobStart Philippines
- - Government Internship Program (GIP)
 EMPLOYMENT – LABOR SECTOR
• Implement a comprehensive national industrial policy that creates value-added supply
chain by linking labor intensive sectors with competitive and comparative advantages,
such as agriculture and industry, to sustain investments and create employment
opportunities, and by aligning monetary, fiscal, financial, and trade and investment
policies in support of the comprehensive national industrial strategy (CNIS) (concerned
agencies: NEDA, DTI, DA, DOF, DOLE);
• Stimulate decent and productive job creation by helping create a business environment
conducive to foreign and local investments, such as lowering the cost of doing business
(i.E., Transport and utility costs, business fees and permits), streamlining bureaucratic
processes, and ensuring compliance with labor laws and social legislations (concerned
agencies: NEDA, DTI, DBM, DILG, DOTC, DOF, DPWH, BIR, DOLE);
• Address unemployment and job-skills mismatch, and produce globally competent
workforce
 EMPLOYMENT – EMPLOYER SECTOR
• Promote better business environment conducive to foreign and local investments, with
the end view of raising competitiveness of the country and improving productivity and
efficiency;
• Address job-skills mismatch and produce globally competent workforce;
• Increase productivity in the agricultural sector by revitalizing and promoting farming
and fishing industries, which may be done through strategies;
• Promote partnership between and among small and big industry players, minimizing
instances of poaching or pirating of skilled workers;
• Promote better coordination between employers, academe, government, and
international development partners by analyzing demand and supply information in
the labor market and by efficiently disseminating labor market information through
pesos down to the barangay level
LABOR RELATIONS, LABOR STANDARDS,
AND SOCIAL DIALOGUE

AGENDA

• Increase competitiveness and the ease of

doing business
* Promote the observance of the rule of law,
and strengthen the justice system (including
labor justice)
 LABOR RELATIONS, LABOR STANDARDS,
AND SOCIAL DIALOGUE
EXISTING POLICIES AND PROGRAMS

• Labor laws compliance system (LLCS)

• Single entry approach (sena)
• Conciliation-mediation
• Project speED (speedy and efficient delivery of labor justice)
• Tripartism and social dialogue
• Labor and employment education services (LEES)
• Labor-management councils (lmcs)
• Two-tiered wage system (TTWS)
• Productivity toolbox
 LABOR RELATIONS, LABOR STANDARDS,
AND SOCIAL DIALOGUE – LABOR SECTOR
Ensure and strengthen compliance with labor laws by:
• Passing a law institutionalizing the labor laws compliance system (LLCS) (concerned
agencies: congress, DOLE);
• Passing a law penalizing violations of general labor standards (GLS) and
occupational safety and health (OSH) standards, imposing stricter penalty for
repeated refusal of entry to labor law compliance officers (llcos), and requiring labor
compliance in the issuance and/or renewal of business permits (concerned agencies:
congress, DOLE, DILG, DTI);
• Strictly enforcing and executing compliance orders of DOLE regional offices and
decisions of the NLRC, and allowing automatic execution of the same after 10 days
(concerned agencies: DOLE, NLRC);
 LABOR RELATIONS, LABOR STANDARDS,
AND SOCIAL DIALOGUE – EMPLOYER SECTOR

• Strengthen and promote social dialogue mechanisms through tripartism by conducting

inclusive consultations with concerned stakeholders prior to the issuance of industry
rules and regulations
• Encourage the adoption by labor management councils (lmcs) of productivity
improvement programs focused on improving communication and productivity in
addition to monetary reward and gainsharing
• Promote strict compliance with general labor standards and occupational safety and
health standards
• Review and/or introduce schemes that will improve productivity in the industry
• Promote the speedy and efficient administration of labor justice
 GOVERNANCE

AGENDA

Streamline the bureaucracy, promote the

observance of the rule of law, and
strengthen the justice system including
labor justice
 GOVERNANCE

Existing Policies And Programs

• Transparency Seal
• Efficiency And Integrity Development Plan, Tripartite Efficiency And
Integrity Boards
• ISO – Certification Of Frontline And Support Services, Quality
Management System
• ARTA, Citizen’ Charter
• Project SpeED/SEnA
• Capacity-building Program For Employees And Stakeholders
 GOVERNANCE – LABOR AND EMPLOYER
SECTOR
• Upgrade QMS processes to ISO 9001:2015 standards
• Utilize technology in frontline services consistent with e-government standards,
including feedback mechanism
• Improve targeting and M&E systems by developing program databases and tracer
systems
• Improve personnel capacities in project management, monitoring and evaluation, labor
market analysis, documentation, systems development
• Enhance merit- and performance-based recruitment and selection consistent with CSC
PRIME standards
• Enhance performance management system towards linking this to rewards, incentives,
and discipline under the PRAISE guidelines and guidelines on administrative discipline