What is the labor cost in the Philippines?

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What is the labor cost in the Philippines?

Mon, 07/25/2011 - 14:46

What is the average wage in the Philippines?
Magkano ang karaniwang sahod sa Pilipinas?

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An official of the Board of

Mon, 07/25/2011 - 14:47

An official of the Board of Investments (BOI) has been trying to dispel reports that the Philippines has one of the highest labor costs in Asia, by citing the results of a survey by the Japan External Trade Organisation (JETRO) showing that China, which attracts a lot of investments, has higher labour costs.

BOI managing head Cristino Panlilio quoted the 20th Asia survey by JETRO in October 2009 which shows that salaries in the manufacturing and services sectors, both for employees and managers, are more expensive in China than in the Philippines.

"That is my call to business, employers.  Start checking, re-computing this cost competitiveness as far as labour is concerned," he said.  "I heard that there are serious efforts (by some manufacturing companies) to relocate here from China."

Mr. Panlilio noted that in manufacturing, salaries in China are about US$4,000 per annum, compared to US$3,800 in the Philippines.  For engineers, the salary in China is US$8,000 annually, much higher than US$6,000 in the Philippines.

Managers in the manufacturing sector in China also get US$14,900 each year, slightly higher in the Philippines where they receive US$14,800.  In the service industry, China’s salary figure is US$10,000 per annum, higher than US$6,000 in the Philippines.

Managers’ salaries in the service industry in China average US$25,000 annually, while the figure for the Philippines is US$18,000 per annum.

Mr. Panlilio said this puts the Philippines at par with Indonesia and Vietnam but cheaper than Thailand and Malaysia.   In manufacturing, the average annual salary of a worker in Indonesia is US$3,523 per year while in Vietnam it is US$1,903. The Philippines’ US$3,704 is cheaper than Malaysia’s US$4,312 and Thailand’s US$4,497.

In services, the average wage of a staffer in Indonesia is US$5,320 and in Vietnam US$5,584, cheaper than the US$5,940 in the Philippines. The figures for Thailand are US$10,317 and for Malaysia, US$15,044.

"Wages usually increase as a nation develops and that’s part of economic growth. The cost of labour becomes a giant cost, so businesses gravitate towards countries with reasonable labour costs. The Philippines is very competitive when it comes to labour and employment cost," he said.

He said the Philippines enjoys an advantage in its large number of college students.  In 2009, some 2.9 million or 57 percent of high school graduates proceeded to university.

There were also 298,000 new students in engineering, 648,000 students in nursing and medical-related courses and 260,000 in information technology as of last year.