Laws to address Filipino workers' rights
The Labor policy in the Philippines is specified mainly by the country's Labor Code of the Philippines and through other labor laws. They cover 38 million Filipinos who belong to the labor force and to some extent, as well as overseas workers. They aim to address Filipino workers’ legal rights and their limitations with regard to the hiring process, working conditions, benefits, policymaking on labor within the company, activities, and relations with employees.
The Labor Code and other legislated labor laws are implemented primarily by government agencies, namely, Department of Labor and Employment and Philippine Overseas Employment Agency (now the country's Department of Migrant Workers). Non-government entities, such as the trade unions and employers, also play a role in the country's labor.
Labor force.
The Philippines has one of the biggest available pools of qualified workers (aged 15–64) in the world in absolute terms which ranks 13th largest in the world behind countries like Vietnam, Japan, and Mexico. In 2010 its people qualified for work had reached 55.5M. As of 2011[ [update]], it ranked 147th, at 61%, bordering the middle and bottom third of the world ranking, by virtue of its relatively large population of elderly and children combined.
With this large pool of available workers, the Philippines has more than 38 million people that belong to the labor force which is one of the largest in the world almost making it to the top ten notwithstanding a relatively mediocre participation rate of 64.5%. The labor force has consistently grown by an average 2% for the past three years. This labor force is dominated by people that have an educational attainment below the tertiary level which make up 71%.
Employment.
As of 2011[ [update]], the labor force totaled approximately 40 million workers. As of 2020[ [update]], the labor force participation rate was 57%, a relatively large percentage that belongs to the upper-third in the world ranking. The Philippines ranks relatively low in its employed worker-to-GDP ratio with only $8,260 which hints about the country's productivity issues. Nevertheless, this GDP per employed worker has been growing by an average of 3% over the last decade.
Most of these employed workers are in the field of Services (50%), followed by Agriculture (34%) and Industry (15%) with the lowest share. There has been a considerable employment growth in each of the Services and Industry sector of about 4% since 2009 while employment in the Agricultural sector has been fluctuating. A large portion of these employed workers are salary/wage workers and then followed by self-employed.
The share of the Philippine labor force employed in agriculture declined from over 40% in 1991 to less than 25% in 2019. During the same period, employment in the service sector became the largest contributor to the workforce, accounting for over 60% by 2022. The industry sector also experienced moderate growth, rising from approximately 15% in 1991 to over 20% in 2022, reflecting the country’s shift toward urbanization and industrialization. This decline in agricultural employment emphasizes the movement of labor toward service and industry-based jobs, alongside a reduction in rural-based work opportunities. These trends demonstrate the changes of the Philippine employment over time. Additionally, the share of GDP contributed by the Philippine agriculture sector declined significantly from over 25% in the 1960s to below 10% by 2022. This decrease aligns with the reduction in agricultural employment, as the economy transitioned toward industry and services. This drop shows a broad shift in the economy, where work is valued more in non-agricultural sectors.
Unemployment and under-employment.
There are about 2.7 million Filipinos that are unemployed which constitutes about 7.4% of the labor force. This is the lowest rate the Philippines enjoys since 1996, before the country suffered from the Asian Financial Crisis. After unemployment rate peaked in 2000, it has been on a steep decline by an average of 8.5% each year through to 2010. Out of this unemployed group of workers, 88% is roughly split between people who at least had a high school or a college education.
A large proportion of college graduates are nursing graduates whose numbers now sum up to about 200,000 according to a report by Philippine Nurses Association. As of 2011, it is estimated that about 7M are underemployed. It went back up after it fell in 2010 at 6.5M. Visibly underemployed people, people working less than 40 hours per week, cover 57% while the rest is made up by Invisible underemployed people, those who work over 40 hours per week but wants more hours.
Labor issues.
Low wages.
Many workers receive wages that are below what is considered a living wage. Labor groups have called for the raising of the minimum daily wage mandated by the government.
Estimates from the Japanese External Trade Organization state that as of 2023 manufacturing sector wages in the Philippines is lower than that in Singapore, Malaysia, Thailand, Indonesia, and Vietnam, while non-manufacturing sector wages is lower than that in Singapore, Malaysia, Thailand, Indonesia, Vietnam, and Cambodia.
Balance between workers' welfare and employment generation.
Some businesses argue that having policies that are biased on workers’ welfare and protection may hinder employment creation. They argue that a rigid labor market due to government intervention may result in lower investments and thus, slower growth.
Hazardous working conditions.
A substantial number of workers in the Philippines are exposed to hazardous working conditions and are not provided sufficient safety equipment and training. Of the country's 13.8 million workers, an estimated 17 out 18 are exposed to various safety and health hazards.
The type of hazards workers are exposed to depends on the industry they are in. Workers in construction and manufacturing, for example, tend to work with electrical equipment and other dangerous tools and machinery, while those in agriculture are frequently exposed to toxic pesticides and fertilizers.
Maltreatment of migrant workers.
Many Filipino migrant workers have experienced abuse, exploitation, or human trafficking. In 2020, almost 5,000 cases of maltreatment of overseas Filipino workers (OFWs) were recorded by Philippine Overseas Labor Offices.
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. Improvements in workers’ real wages and earnings is related to labor productivity growth and not exactly to employment growth. Improvements in real wages, improves the poverty incidence of the people thus helping in poverty reduction. Canlas, Aldaba, Esguerra argues that policymakers should have a good understanding of the sources of TFP because sustainable growth comes from rising TFP growth.
"One key factor is educated labor, which has the capacity to invent, innovate, and master new techniques." At the long run, it is important to educate the population and invest in human development and research and development to improve TFP. Canlas, Aldaba, Esguerra advise that to raise TFP growth, monetary policy and fiscal policy should stabilize a predictable environment for the private sector.
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. This also shows how they are not content with the quality of employment. The self-employed are actually indifferent between the wage employment and self-employment that they decided to be on their own. This makes them, together with the unpaid family workers, part of the vulnerable employment and its earnings is weak compared to the wage one. On the other hand, they can be overseas Filipino workers. In 2009, 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.
In 2010, half of the 2.9 million unemployed Filipinos were age 15–24. 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. On the other hand, there is the job and skill mismatch. Even with the high unemployment rate, there are jobs that are not filled because there are no applicants who have the right qualifications. From this job mismatch problem also arises the educated unemployed. In 2010, the unemployment rate among the college educated is about 11%. Some have difficulty in finding an appropriate job for the degree they have. Others, on the other hand, have higher reservation wages and can afford to wait for better opportunities.
Labor Code of the Philippines.
The Labor Code of the Philippines governs employment practices and labor relations in the Philippines. It also identifies the rules and standards regarding employment such as pre-employment policies, labor conditions, wage rate, work hours, employee benefits, and termination of employees. Under the regime of the President [Ferdinand Marcos], it was promulgated on May 1, 1974 and took effect November 1, 1974, six months after its promulgation.
Pre-employment policies.
Minimum employable age.
The minimum age for employment is 15 years old for non-hazardous environments, and 18 for hazardous ones. Persons below that age are not allowed to be employed unless they are working directly under their parent's supervision or are working with family members.
Overseas employment.
As for overseas employment of Filipinos, foreign employers are not allowed to directly hire Philippine nationals except through board and entities authorized by the Philippine Overseas Employment Administration. Travel agencies also cannot transact or help in any transactions for the employment or placement of Filipino workers abroad.
Regulation on conditions of employment.
Minimum wage rate.
Minimum wage rates in the Philippines vary from region to region, with regional wage boards established for each region to monitor economic activity and adjust minimum wages based on growth rates, unemployment rates, and other factors. The Wage Rationalization Act, or Republic Act 6727, was enacted in 1989 and it is the ruling law regarding minimum wage rates. It established the National Wages and Productivity Commission which has supervision over Regional Tripartite Wages and Productivity Boards, which ultimately decide on minimum wage rates. As of July 2024, the highest minimum wage rate is in Metro Manila, set at ₱645 daily non-agricultural wage rate, while the lowest, as of February 2024, is in the Bangsamoro Autonomous Region in Muslim Mindanao, at ₱336 daily non-agricultural wage rate.
Regular work hours and rest periods.
Normal hours of work. – The normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
Meal periods. – Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.
Rest days.
All employee have the right to have a 24 consecutive hours of rest day after every 6 days of work. Employers are responsible for determining and scheduling the rest day of employees except only if the employee prefers a different day based on religious grounds. However, the employer may require an employee to work during his/her rest day in cases of emergencies, special circumstances at work in which employees are seriously needed, to prevent losses or damage to any goods or to the employer, and other cases that have reasonable grounds.
Nightshift differential and overtime.
Employees are also given additional wages for working in night shifts. The night shift starts from 10 o’clock in the evening until 6 o’clock in the morning, and employees will receive 10% more of his/her regular wage rate. 
Overtime work for employees (beyond 8 hours) are allowed and workers shall be paid with his/her regular wage plus an additional 25% of the regular wage per hour worked or 30% during