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Starting in June 2011, a mandatory 22 peso ($0.50) cost-of-living allowance will be added on to the minimum daily wage of 404 pesos ($9.30) in the Philippines.  This legislation was made in response to workers demanding higher wages to offset rising prices of food and essential products in the nation’s capital.

Many employees who were looking for a minimum wage increase are disappointed because this new allowance applies only to basic earnings, so it does not include overtime or bonus pay.  However, many small and medium businesses in the Philippines which pay their workers minimum wage are already struggling to stay afloat amid the recent increase in labor costs.

The government of the Philippines sees this new allowance as a way to balance the needs of both businesses and employees.  Though the Philippines has a very low minimum wage in comparison to other countries, its government decided against a minimum wage increase because such a move may have caused higher unemployment.