TODAY, May 1, Filipino workers are in the limelight as their hard work and contributions to society are honored this Labor Day, locally known as Araw ng Paggawa.

Considered a regular holiday in the country, Labor Day was first celebrated on May 1, 1903 by the Union Obrera Democratica de Filipinas, the nation’s first labor federation that advocated the rights of Filipino workers during the American occupation in the country.

Today, there are various ways of celebrating Labor Day. While some hold activities like job fairs, others are taking to the streets to demand higher wages amid the increasing prices of goods and services.

The Philippine Statistics Authority (PSA) reported that the inflation rate accelerated to 3.7 percent in March 2024, driven by higher food and transportation costs.

But is the salary that Filipino workers, particularly single Gen Zs, enough to cover their living expenses?

Enough for one mouth

Danielle Ulanday, who works as a creative director in a private company in Manila, told republicasia that the salary he’s receiving is only enough for himself. He said that he lives under one roof with his parents, and he shoulders several financial expenses at home with his younger sister since their parents have retired.

“Sa kuryente, ako, and sa Internet, yung kapatid ko. When it comes naman sa food, hati kami,” he said.

For him to be able to provide for his family, Ulanday had to take on an additional job. 

“When it comes to magpo-provide ka sa family mo and may other [expenses] ka pa, parang hindi siya enough. You need to work two jobs, I think, para ma-meet niya yung expectations mo financially,” he said.

Content specialist Almira Geronimo also said that the salary she’s getting from her employer is enough to feed only one mouth. She said that her salary would be sufficient for an employee with a work-from-home setup, and does not need to allot budget for transportation costs. 

“I can say na malaki siyang amount if only you are [at home] like you are not going outside [to] travel or you’re not eating outside,” she said.

Geronimo lives with her sister in the metro, away from their parents. Fortunately enough, she said that her parents do not require them to cover bills in their home. The only expenses she has are food and other utility bills, which she shares with her sister in their separate house. She has to allot a budget for her transportation, too, because she reports onsite.

“Actually, [my salary is] just right for me. I can save [an] amount for myself and other expenses,” she said, adding that she can also save up for emergencies.

Budgeting challenges

There were times when Ulanday and Geronimo struggled to budget their finances. This happened to Ulanday at the height of the COVID-19 pandemic when prices of goods and services skyrocketed and many workers suffered job losses after a vast number of enterprises were forced to shut down due to strict government measures on movement and gatherings.

“Sobrang taas kasi ng inflation noong time na ‘yon na even kahit sino ata nagulat sa pagtaas ng mga bilihin,” he recalled.

“Ang problem kasi noon is yung budget–yung salary ko that time enough for myself lang, hindi doon sa current na nangyayari sa’tin. Like yung mga bilihin ‘di ko in-expect na ganon kataas agad,” added Ulanday.

Geronimo made an effort to monitor her spending using a budgeting app, but was not always successful.

“Every day, I tried to put yung expenses ko [sa tracker]. However, with the work setup [that I have], lalo na kung pagod ka na, I cannot put everything na nagastos ko within the day kahit na two digit lang, even a single-digit amount, so later on hindi ko na rin siya constantly updated,” said the content specialist.

Considering the country’s current inflation rate, Geronimo said that a single Gen Z worker like herself should earn at least P30,000 to P40,000 a month if they need to support someone else. Ulanday also agreed that having a monthly income of P40,000 would be enough for a single Gen Z worker to cover their living expenses in today’s generation.

But Geronimo believed that a worker would need to have a higher pay range if they have more mouths to feed.

How much is a ‘decent salary?’

The current daily minimum wage rates for Filipino employees working in the private sector vary in different parts of the country. Based on the website of the National Wages and Productivity Commission, the minimum wage rate in Metro Manila is from P573 to P610.

This wage rate is “more than enough” for a single Gen Z worker, according to economist Pablito Villegas. 

“But if it will be supporting a family, considering the inflation rate which is very high, the food cost is very high, the transport cost [is] very high, then it will barely subsistence level or meeting his basic living wage,” he told republicasia.

A living wage gives a worker the capability to support not only themselves but also their family, while still having savings. Looking at the current minimum wage rate in the metro, Villegas believed that it wouldn’t be sufficient to support more individuals.

If a Gen Z worker wants to consider their salary a “decent” one, he suggested that they should earn at least P1,000 a day. 

“The important level at this point is from P1,000 to P1,500 because of the inflation. It is practically almost double the prescribed government rate,” said Villegas.

This rate, however, can only attend to one’s “needs.” Attending to their “wants” is another story, he stressed. 

A Gen Z worker can cover expenses for their wants, or non-essential purchases, if they know how to manage their spending on food, transport, and rental.

“The living standard means you can have food three times a day, you can have at least a cellphone, you can have a computer, and you can go to work at least [via] a jeepney,” he noted.

But Villegas highlighted that the problem with having a P1,000 daily salary is that most companies in the Philippines are micro, small and medium enterprises (MSMEs).

“When you look at these employees working in the service industries, the service industries will only follow the prescribed range,” said the economist.

“In reality, most of them, particularly yung mga cafeterias, panaderias, are receiving much below that. But they have to do it because earning some money is much better than not earning money at all. It’s really a survival kind of work, especially in some factories or so.” 

“And you see, these are also small, micro-entrepreneurs, and we should thank them because they are able to pay at least,” he said.

How can gov’t, employers help?

Having insufficient income is what prompts many workers to take on additional jobs. While it would be helpful to have an extra income, not all employees have the capability to do side hustles. 

What can be done instead is to pay workers based on their productivity, suggested Villegas.

“The basis for pay should not only be limited to the prescribed standard ng government ng living wage. But maybe peg to productivity standards. The higher level of your productivity, then you get incentives for that,” he said.

However, this only applies to the private sector and cannot be legislated. Villegas said that the government can help Filipino workers with their expenses by reducing the prices of goods and services and making them affordable to everyone.

“For example, I have just been to Cebu and the price of food in Cebu is much, much lower than in Davao or Manila. The price of food and basic necessities, you reduce the cost of power, you reduce the cost of transport, so that is where the government efficiency will come in,” Villegas said.

“Kaya nga magkakaroon ng subways, the transport infrastructure will be improved, ‘yun yung mga mechanisms where the government can lower the cost of doing business and can lower the cost of maintaining a living standard that will be more affordable, given the wage rate that private companies are offering.”

The economist noted that the government has to balance four macro prices for the Philippine economy to grow: the inflation rate, the wage rate, the exchange rate, and the interest rate. 

He said that the government is “trying its best” to balance these four macro prices, but its best “is not good enough,” noting the lack of support for local workers and suppliers like farmers, fisherfolks, and micro-small industries.

On Labor Day, President Ferdinand Marcos, Jr. assured the public that the Philippines has enough supplies amid the dry season to avoid rising prices of goods.

The chief executive also tasked the Energy Regulatory Commission (ERC) to suspend the operation of the Wholesale Electricity Spot Market (WESM) whenever the National Grid Corporation of the Philippines (NGCP) declares a red alert on power grids. This is to prevent electricity costs from soaring amid the El Niño phenomenon, Marcos said.

Considering the impact of inflation, Marcos then directed the Regional Tripartite Wages and Productivity Board (RTWPB) to review the minimum wage rates in every region.