Northern Mindanao minimum wage hike still leaves workers below poverty line

CAGAYAN DE ORO, Philippines – Workers in Northern Mindanao will see their daily minimum wage rise by P39 to between P485 and P500 under a new wage order, the Regional Tripartite Wages and Productivity Board (RTWPB) said.

The rates, posted online on New Year’s Eve, are part of Wage Order No. RX-24, which was confirmed by the National Wages and Productivity Commission (NWPC) on December 22, 2025.

Business and labor leaders said the increase is too small to lift workers above the poverty threshold.

“The increase may not be enough if we compare it to the (family) living wage of about P1,200 per day, but it is better than nothing,” said Raymundo Talimio, a certified public accountant and immediate past president of the Cagayan de Oro Chamber of Commerce and Industry Foundation Incorporated (Oro Chamber).

He explained that employers and business owners rely on the regional wage-setting mechanism, noting that the RTWPB-X has never issued a P50- or higher increase since the tripartite body was formed 36 years ago in Northern Mindanao.

Talimio added that the situation would have been more challenging if the legislated wage hike of P100 to P300 had materialized, hinting that a one-time, across-the-board increase in the daily minimum wage could lead to layoffs and business closures.

He said proponents of legislated wage adjustments should have included protections for employers, such as tax credits, subsidies on contributions to the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, as well as low-interest loans to help businesses comply.

Despite this, Talimio said legislated wage adjustments could help narrow the gap between the daily minimum wage and the family living wage.

A family living wage refers to the income needed to cover a household’s cost of living, including all food and non-food requirements, with sufficient allowance for savings and social security investments.

“Wage increases like P25 + P14 remain symbolic gestures rather than real pathways out of poverty for Filipino workers,” said Cagayan de Oro-based lawyer Proculo Sarmen, legal counsel of the Federation of Free Workers (FFW). “We appreciate it, but honestly, it is another consuelo de bobo (fool’s consolation).”

Sarmen pointed out that while the Constitution mandates a living wage, workers still cannot support a family on today’s minimum pay because regional wage orders have effectively kept workers below the poverty line. “This is a failure of governance, not just an economic issue,” he said.

Formerly with the Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP), which proposed a P200-legislated daily wage increase in Congress, Sarmen lamented that most lawmakers “do not truly see public office as public service” because they are influenced by business interests.

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In formulating Wage Order No. RX-24, the RTWPB-X considered the 2023 poverty threshold of P13,873 per month for a family of five, as released by the Philippine Statistics Authority (PSA) in 2024.

Under Wage Order No. RX-23, the minimum wage for Wage Category 1 was P461. An employee working 26 days would earn a monthly gross pay of P11,986 – well below the PSA-calculated poverty threshold of P13,873 in Northern Mindanao in 2021.

Take-home pay is further reduced by mandatory deductions for SSS, PhilHealth, and Pag-IBIG contributions.

This year’s P39-increase will be implemented in two tranches: P25 on January 16 and P14 on May 1. This sets new daily minimum rates at P500 for Wage Category 1 areas and P485 for Wage Category 2. With P500 a day, an employee would earn P13,000 per month – still short of the P13,873-poverty line.

The first wage category includes those in the cities of Cagayan de Oro, El Salvador, Gingoog, Iligan, Malaybalay, Ozamiz, and Valencia, as well as the towns of Jasaan, Tagoloan, Villanueva, Opol, and Lugait in Misamis Oriental, Manolo Fortich, and Maramag and Quezon in Bukidnon. 

Other Northern Mindanao cities and municipalities, including business establishments employing 10 or fewer people, fall under the second category.

“We have to ensure timely adjustments in minimum wages,” Department of Labor and Employment-Region X Director Joffrey Suyao said during a forum on the region’s labor situation, which affects more than 152,000 daily wage earners in the private sector.

The Northern Mindanao Regional Development Plan 2023-2028 cites a 94.6% employment rate in 2021, representing about 2.176 million individuals aged 15 and older. Challenges include a 5.4% unemployment rate – around 124,000 jobless individuals – and an 18.3% underemployment rate, about 397,000 people whose low pay compels them to seek additional work.

Suyao said public hearings on the region’s wage rates were held in early December in Ozamiz, Iligan, Malaybalay, and Cagayan de Oro, with participation from employers and workers across agriculture, services, and industry sectors. – Rappler.com