Primer

on
WAGE ORDER NO. RX-16

This Primer is in simplified FAQ form for the information of all covered workers and
employees and for the implementation and compliance of business and industries in the
private sector.

1. What is W.O. No. RX – 16?

It is an order issued by the Regional Tripartite Wages and Productivity Board – X (RTWPB-
X), prescribing new minimum wage rates to minimum wage earners in Region X.

2. What is a Minimum Wage?

It is the lowest wage rate fixed by law that an employer should pay his worker.

3. Who are covered by the New Minimum Wage Rates?

The new minimum wage rate covers all minimum wage earners in the Private Sector in
Region X, regardless of their position, designation or status and irrespective of the
method by which their wages are paid.

4. What are the areas comprising Region X?

Region X covers the Provinces of Bukidnon, Camiguin, Misamis Occidental, Misamis
Oriental and Lanao del Norte, and the Cities of Cagayan de Oro, El Salvador, Iligan,
Gingoog, Oroquieta, Ozamis, Tangub, Malaybalay and Valencia.

Under W.O. RX-16, there are four (4) wage categories corresponding to the respective
areas covered by Region X. The worker/employee shall apply the wage rate in
accordance with the wage category to where the area of his workplace belongs.

(The Sugar Agricultural Industry is covered by Supplemental Wage Order No. RX-15 A
effective February 17, 2011)
Please see TABLE II below.

5. What are the salient features of W.O. RX-16?

a. Increase of P17.00 as Cost of Living Allowance (COLA) for the first six (6) months
from effectivity of W.O. RX-16.
b. Integration of P17 Cost of Living Allowance (COLA) into the Basic Wage after six (6)
months from effectivity of W.O. RX-16 and onwards.

Please see TABLE I below.

RTWPB-X Primer on W.O. RX-16 1

6. When will it take effect?
a. Effective July 24, 2011 to January 24, 2012, workers will be receiving an
additional P17.00 increase as Cost of Living Allowance (COLA) granted under W.O.
RX – 16.

b. Effective January 25, 2012 and onwards, the additional P17.00 Cost of Living
Allowance (COLA) granted under W.O. RX – 16 received by workers shall be
integrated into their Basic Wage.

7. What is the effect of the integration of the COLA into the Basic Wage?
The integration of the COLA into the Basic Wage will result to an increase in the
computation of the worker’s benefits (e.g. 13th month pay, Holiday pay, SSS).

8. What is the basis of the Minimum Wage?

It is based on the normal working hours, which shall not exceed eight (8) hours work a
day.

9. How can an employer comply with the minimum wage of P269 basic salary and P
17 COLA under Wage Order No. 16?
An employer is deemed to have complied with the Wage Order if the total amount of
wages paid to the lowest paid worker amounts to the prescribed minimum wage of P
286 provided the basic salary is not less than P 269.

For example, an employer pays a basic salary of P280 and COLA of P 12 for a total of P
292 or any combination is deemed to have complied since it exceeds the minimum
wage of P 286.

However, if an employer is paying a basic salary of P 270 and COLA of P 12 or a total of

P 282, then the employer is required to adjust the rate by providing an additional
amount of P 4 either as basic salary or COLA.

All employers however are required to pay a minimum wage of not less than P 286
basic salary effective January 2012.

10. If we pay the employee, P265 basic pay and P 21 COLA for a total of P286, does
this mean we have complied with the Wage Order?
No, the basic salary must not be lower than the prescribed amount of P269. In this
example part of the COLA equivalent to P 4 maybe converted to basic salary to comply.

11. We have workers who are classified as “trainees”, are they entitled to the
additional COLA of P17 a day, how about the minimum wage of P 286?
Yes, the Wage Order the prescribed minimum wage of P 286 applies to all workers
irregardless of classification.

RTWPB-X Primer on W.O. RX-16 2

 Employers who has an accredited learners program approved by the Technical Education
and Skills Development Authority (TESDA) may pay their employees classified as
“trainees or learners” the amount of P214.50 which is 75% of the new minimum
provided the basic salary is not less than P 201.75.

12. If it is based on the normal working hours, how about Workers Paid by Result?
Workers paid by result including those paid by piecework and task basis shall be entitled
to receive not less than the prescribed new minimum wage per eight (8) hours work a
day or a proportion thereof for working less than eight (8) hours.

13. What is the rule on Workers under Contracting Arrangement?

Contracting arrangement is when an employer/principal contracts the performance of
another, referred to as the contractor or subcontractor. The contractor then employs its
own workers/employees.

The prescribed increases in the wage rates of the workers shall be borne by the
principal. In the event the principal fails to pay the prescribed wage rate, the contractor
shall be jointly and severally liable.

14. How about on Workers under Apprenticeship and Learnership agreements?

Wages under Apprenticeship and Learnership agreements duly approved by TESDA shall
in no case be less than seventy-five percent (75%) of the prescribed wage rate.

15. What is the rule on Mobile and Branch workers?

The wage rates of workers, who by nature of their work have to travel, shall be those
applicable in the head office of the employer.

Workers working in branches shall be those applicable in the place where they are
stationed.

16. What will happen to workers who are transferred to other region?
The transfer of personnel to areas outside the Region shall not be a valid ground for the
reduction of the wage being enjoyed by the worker prior to such transfer.

The workers transferred to other regions with higher wage rates shall be entitled to the
wage rate applicable on that region.

17. What is the rule on Private Educational Institutions including those offering
Technical/Vocational Education and Training (TVET) ?
Private educational institutions including those offering Technical/Vocational Education
and Training (TVET) shall implement the prescribed wage rate starting next school year
2012 – 2013.

RTWPB-X Primer on W.O. RX-16 3

18. In the application of the wage increase, what will happen if it will affect the wage
rates of non-minimum wage earners?
In cases where the wage rates of non-minimum wage earners (e.g. managerial,
supervisorial) are affected, it will result to a Wage Distortion.

19. Our workers are now being paid a basic salary of P270. Are we required to adjust
our wages by P17 to comply with the Wage Order?
No, because he is no longer a minimum wage earner. However, you are required to add P
16 a day either as a basic salary or COLA to meet the new minimum wage order.
Remember however that all new hires must also be paid P286 regardless of position.

20. Our workers are now receiving P286 a day, are we required to give the additional
P17 per day COLA?
No, provided the basic pay is not be less than P269 and remember the next employee
you hire who may even be a casual must be paid P286.

21. What is the difference between a basic salary and a COLA?

The basic salary is the base amount used in computing benefits such as overtime pay,
service incentive leaves, 13 th month pay, SSS contributions, Philhealth contributions and
others. Since the basic salary is the amount used to pay SSS, it follows that any SSS
benefit will be based on the basic salary and not the minimum wage.

On the other hand COLA is only paid for each day when an employee works except
holiday pay. Employees who are under SSS pay such as maternity or sick leave or ECC
are not entitled to the COLA while on leave.

Please note that under the Labor Advisory mentioned above, employees shall now be
entitled to the COLA during Legal Holidays whether work or unworked.

If an employee works overtime on a regular day, he is entitled to the basic salary of

P269 plus COLA of P 17 for the first 8 hours, overtime work rendered in excess of the 8
hours is computed by multiplying the basic hourly salary of P269 divided by 8 (hours)
by 1.25% times the number of hours worked. Please note that the employee is not
entitled to an additional COLA for overtime work.

In computing the 13th month pay only the basic salary is used which in effect amounts to
P 7,016.40 (P269 X 313 / 12) including holiday pay assuming the employee has a
perfect attendance, otherwise, simply divide the total basic salary paid for the year by
12.

22. What is the difference between the monthly paid rate against a daily paid rate?

A daily paid rate is the salary computed based on the number of days the employee
reported to work multiplied by the daily rate. Example, if an employee worked only for ten

RTWPB-X Primer on W.O. RX-16 4

(10) days from the 1st to the 15th of the month, then the employee would receive a basic
salary of P 2,690 plus COLA of P 170.

On the other hand, the salary of a monthly rated employee is computed by multiplying the
daily basic rate by the number of working days a month and dividing the result by 12 as
follows:

a) An employee who regularly works everyday including Rest Days, Regular Holidays
and Special Holidays

Basic salary 298.00 X P269/ 12 = P 6,680.17

COLA 298.00 X 17/12 = 422.17
Basic Salary for Rest day 67.60 X 269/12 = 1,515.37
COLA for Rest day 52.00 X 17/52 = 73.67
Basic Salary Regular 24.00 X 269/12 = 538.58
Holiday
COLA Regular Holiday 24.00 X 17/12 = 34.58
Basic Salary Special 3.90 X 269/12 = 87.43
Holiday
COLA Special Holiday 3.00 X 17/12 4.25
TOTAL P
9,355.04

b) An employee who regularly works 6 days a week but considered paid on Rest Days,
Regular Holidays and Special Holidays

Basic salary 298.00 X P269/ 12 = P 6,680.17

COLA 298.00 X 17/12 = 422.17
Basic Salary for Rest day 52.00 X 269/12 = 1,165.67
Basic Salary Regular 12.00 X 269/12 = 269.00
Holiday
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special 3.00 X 269/12 = 67.25
Holiday
TOTAL P
8,621.26

RTWPB-X Primer on W.O. RX-16 5

 c) An employee who regularly works 6 days a week and is not paid for rest days but
works during Special Holidays

Basic salary 298.00 X P269/ 12 = P 6,680.17

COLA 298.00 X 17/12 = 422.17
Basic Salary Regular Holiday 12.00 X 269/12 = 269.00
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special Holiday 3.90 X 269/12 = 87.43
COLA Special Holiday 3.00 X 17/12 = 4.25
TOTAL P 7,480.02

d) An employee who regularly works 5 days a week and is not paid for rest days but
works during Special Holidays

Basic salary 261.00 X P269/ 12 = P 6,680.17

COLA 261.00 X 17/12 = 422.17
Basic Salary Regular 12.00 X 269/12 = 269.00
Holiday
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special 3.90 X 269/12 = 87.43
Holiday
COLA Special Holiday 3.00 X 17/12 = 4.25
TOTAL P
6,598.18

FOR MUSLIM AREAS

a) An employee who regularly works everyday including Rest Days, Regular Holidays
Special Holidays and Muslim Holidays

Basic salary 295.00 X P269/ 12 = P 6,612.91

COLA 295.00 X 17/12 = 417.91
Basic Salary for Rest day 67.60 X 269/12 = 1,515.37
COLA for Rest day 52.00 X 17/52 = 73.67
Basic Salary Regular 24.00 X 269/12 = 538.58
Holiday
COLA Regular Holiday 24.00 X 17/12 = 34.58
Basic Salary Special 3.90 X 269/12 = 87.43
Holiday
COLA Special Holiday 3.00 X 17/12 = 4.25
Basic Salary for Muslim 6.00 X 269/12 = 134.50
Holidays

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 COLA Muslim Holidays 6.00 X 17/12 = 8.50
TOTAL P 9,426.55

b) An employee who regularly works 6 days a week but considered paid on Rest Days,
Regular Holidays, Special Holidays and Muslim Holidays

Basic salary 295.00 X P269/ 12 = P 6,612.91

COLA 295.00 X 17/12 = 417.91
Basic Salary for Rest day 52.00 X 269/12 = 1,165.67
Basic Salary Regular 12.00 X 269/12 = 269.00
Holiday
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special 3.00 X 269/12 = 67.25
Holiday
Basic Salary for Muslim 6.00 X 269/12 = 134.50
Holidays
COLA Muslim Holidays 6.00 X 17/12 = 8.50
TOTAL P 8,692.74

c) An employee who regularly works 6 days a week and is not paid for rest days but
works during Special Holidays

Basic salary 295.00 X P269/ 12 = P 6,612.91

COLA 295.00 X 17/12 = 417.91
Basic Salary Regular Holiday 12.00 X 269/12 = 269.00
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special Holiday 3.90 X 269/12 = 87.43
COLA Special Holiday 3.00 X 17/12 = 4.25
Basic Salary for Muslim 3.00 X 269/12 = 67.25
Holidays
COLA Muslim Holidays 3.00 X 17/12 = 4.25
TOTAL P 7,480.25

d) An employee who regularly works 5 days a week and is not paid for rest days but
works during Special Holidays

Basic salary 243.00 X P269/ 12 = P 5,447.25

COLA 243.00 X 17/12 = 344.25
Basic Salary Regular Holiday 12.00 X 269/12 = 269.00
COLA Regular Holiday 12.00 X 17/12 = 17.00
Basic Salary Special Holiday 3.90 X 269/12 = 87.43
COLA Special Holiday 3.00 X 17/12 = 4.25
Basic Salary for Muslim 3.00 X 269/12 = 67.50
Holidays

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 COLA Muslim Holidays 3.00 X 17/12 = 4.25
TOTAL P 6,240.93

Note: 1. Note that since the salary of a monthly paid worker is computed on an annual basis,
the monthly salary remains the same every month whether there are 28, 30, or 32 days.

2. The employer has the option of including the Holiday pay or paying them as they
are incurred.

3. COLA is paid when the employee reports to work and regular holidays in
accordance with the Labor Advisory.

4. Leave without pay or absences can be deducted from the salary.

5. Special working holidays must be computed and added when applicable.

6. There are three (3) Regular Special Holidays which are now paid even if unworked.

23. How do we compute the holiday pay of an employee who receives a basic salary
of P269 and a COLA of P 17 a day?
The employee is entitled to a regular holiday pay of P269 plus COLA of P 17 if the
employee does not work.

If the employee works, he is entitled to 200% of P269 plus the COLA of P 17 or a total of
P 572 (P286 X 2). The employee is now entitled to the COLA of P 17 under the Labor
Advisory.

24. How do we compute the special non-working holiday pay of an employee who
receives P 269 plus the COLA of P 17?
An employee who does not work on a special holiday is not entitled to any pay.
Similarly, if an employee works for 12 hours on a special non-working holiday, he is
entitled to the basic salary of P 269 plus the premium of .3% plus the COLA of P 17 for
the first 8 hours and 1.3$ for work in excess of 8 hours as follows:

1st 8 hours basic salary plus 1.30% P 269.00 X 1.30 P 349.70

1 8 hours COLA
st
17.00
Excess of 4 hours basic salary P 349.70/8 X 4 X 1/30 227.30
TOTAL P 594.00

Note: COLA is paid in a daily basis.

25. Using the prescribed minimum wage of P269 basic salary plus P 17 COLA, how do
we compute the service incentive leave? Vacation leave, sick leave?

RTWPB-X Primer on W.O. RX-16 8

 Since the employee is entitled to the basic pay simply multiply the daily rate of P 269
with the number of days, or P 1.345 for service incentive leave. The same holds true in
computing vacation/sick leave pay, only the basic salary is used.

26. If an employee is paid on a monthly basis, is he entitled to an additional amount

for legal holidays?
It depends, if the employee works six (6) days a week and is paid the minimum basic
salary for 314 days per year then the employee is no longer entitled to a legal holiday
pay, if he does not work. If he works on a legal holiday, then he would be entitled to an
additional amount equivalent to 100% of the basic pay plus COLA.

27. How is the 13 th month pay computed?

a) For daily paid employees

b) For monthly paid employees (Only regular working days are included in the 13 th
month pay)
c) For those who works 365 (Only regular working days are included in the 13 th month
pay)
d) For those who work 6 days a week

Sum up the total basic salary (excluding COLA) add 12 regular holidays and 3 special
holidays (both including COLA) and divide it by 12.

Working days 303 days X P 269/12 = P 6,792.25

Regular Holiday 12 days X 269/12 = 269.00
COLA Regular Holidays 12 days X 17/12 = 17.00
Special Holidays 3 days X 269/12 = 67.25
COLA Special Holidays 3 days X 17/12 = 4.25
TOTAL P 7,149.75

e) For those who work 5 days a week

Working days 261 days X P 269/12 = P 5,850.75

Regular Holiday 12 days X 269/12 = 269.00
COLA Regular Holidays 12 days X 17/12 = 17.00
Special Holidays 3 days X 269/12 = 67.25
COLA Special Holidays 3 days X 17/12 = 4.25
TOTAL P 6,208.25

28. Is the COLA taxable?

Yes. The COLA is subject to income tax however under RA 9504 employees receiving the
minimum wage are exempted from income taxes.

29. Is holiday pay, overtime pay and night premium pay taxable?

RTWPB-X Primer on W.O. RX-16 9

 Yes, however under RA 9504, the new law exempts minimum wage earners from
income taxes. However, for employees receiving a salary rate higher than the minimum
wage, then the same becomes taxable.

What is Wage Distortion and when does it occur?

Wage Distortion is a situation where an application of the wage increase results in the
elimination of the differences of the salary rates between and among employees. It
happens when there is:
a. An existing hierarchy of positions with corresponding salary rates;
b. A significant change in the salary rate of a lower pay class without a concomitant
increase in the salary rate of a higher one;
c. The elimination of the distinction between the two levels; or
d. The existence of the distortion in the same region of the country.

Example:

WAGE RATES EXISTING RATE APPLICATION OF WAGE ORDER 16

Casual P 269 P 269.00 + P17.00 = P 286
Wage 1 275 275.00 + 11.00 = 286
Wage 2 280 280.00 + 6.00 = 286
Wage 3 295 295.00 295

Note that the Casual, Wage 1 and Wage 2 rates are now the same after implementing the
Wage Order? This means that there is a wage distortion since there is no longer a
difference between the rates of a Casual and a Regular Employee.

30. How will we resolve when there is a Wage Distortion?

It depends whether an establishment is unionized or non-unionized.

a. Unionized – Employer and Union shall negotiate to correct the distortions using the
Grievance Machinery in the Collective Bargaining Agreement (CBA). If it remains
unsolved, it shall be decided through Voluntary Arbitration within ten (10) calendar
days.
b. Non-Unionized – Employer and Workers shall endeavor to correct the distortions . If
negotiation fails, it shall be settled through National Conciliation and Mediation
Board (NCMB). If it remains unsolved for ten (10) calendar days of conciliation, the
dispute shall be referred to National Labor Relations Commission ( NLRC) within
twenty (20) calendar days.

31. What is the formula for computation of wages when there is Wage Distortion?
The following suggested formula may be used to correct wage distortions (The Pineda
Formula):
Minimum Wage Order Amount of increase

RTWPB-X Primer on W.O. RX-16 10

 Wage Under No. RX-15 in WO RX-16 Amount of increase
___________________ X ______________ = due to distortion
Present Salary
P 269 X P 17 = P 16.62
P 275

RATE WO 15 ADJUSTMENT NEW RATE

Casual P 269 P 17.00 P 286.00
Wage 1 275 16.62 291.62
Wage 2 280 16.32 296.32
Wage 3 295 15.47 315.47

32. Will an employer still need to comply if he already granted a wage increase prior
to the effectivity of W.O. RX – 16?
Wage increases granted to workers within 3 months prior to the effectivity of W.O. RX –
16 (July 24, 2011) shall be credited as compliance with the order. However, if such
increases are less than the prescribed wage rate, the employer shall pay the difference.

33. What will happen to an employer who does not comply with the W.O. RX- 16?
An employer who does not comply with the W.O. RX – 16 will be subject to criminal
liability and payment of indemnity .

An employer who refuses or fails to pay the prescribed wage increase shall be punished
by a fine of not less than Twenty-Five thousand pesos (P25,000.00) nor more than One
Hundred Thousand pesos (P100,000.00) or imprisonment of not less than two (2) years
nor more than four (4) years or both fine and imprisonment at the discretion of the
court. Provided, any person convicted under the wage order shall not be entitled to the
benefits provided under Probation Law.

The employer concerned shall be ordered to pay an amount equivalent to double the
unpaid benefits owing to the worker. Provided, the payment of indemnity shall not
absolve the employer from criminal liability.

34. Are there any exemptions from W.O. RX – 16?

Yes, there are exemptions from compliance with the wage order. The establishments
that are exempt from the application of W.O. RX - 16 are the following:
a. Retail/Service establishment employing not more than ten (10) Workers;
b. Establishments whose total assets, including those arising from loans, but exclusive
of the land on which the particular business entity’s office, plant and equipment are
situated, are not more than Three Million Pesos (P3,000,000.00);
c. Distressed establishments and other sectors adversely affected by the economic
crisis as determined by the Board;
d. New business enterprises (NBEs);
e. Establishments adversely affected by natural calamities; and

RTWPB-X Primer on W.O. RX-16 11

 f. Establishments producing gifts, toys and housewares (GTH) items made of
indigenous materials.

35. How can an establishment avail of the wage exemption?

There are criteria used to determine whether the applicant-establishment is qualified for
the application for exemption and the submission of pertinent documents to support the
application for wage exemption.

Please see ANNEX I and II.

36. What is the procedure on applying for wage exemption?

HOW:
1. File an Application in three (3) legible copies in person or by registered mail;
2. Supporting Documents with Proper Authentication;
3. Proof of Notice stating that a copy of the application and the supporting documents
has been furnished to the workers.

WHERE:
1. RTWPB – X
2. DOLE Regional Offices
3. DOLE Provincial Offices

WHEN:
1. Not later than seventy-five (75) days or October 20, 2011 from the publication of
the IRR;
2. In the case of NBE’s, not later than sixty (60) days after date of registration.

37. Can any worker file an opposition to the application for exemption of an
establishment?
Yes, any worker or union in the applicant establishment may file with RTWPB-X within
fifteen (15) days from receipt of the notice of the filing of the application, an opposition
to the application for exemption stating the reasons why it should not be approved.

38. What is the effect of disapproved application?

The workers of the establishment with a disapproved application shall be paid the
mandated wage increase retroactive to the date of effectivity of the wage order (July 24,
2011) plus simple interest of one percent (1%) per month.

39. Can the establishment who had been denied exemption file an appeal?
Yes, any party aggrieved by the denial may file an appeal to the NWPC through the
RTWPB, not later than ten (10) days from date of receipt of the decision based on the
following grounds:
a. Non-conformity with the prescribed guidelines and/or procedures on exemption;

RTWPB-X Primer on W.O. RX-16 12

 b. Prima facie evidence of grave abuse of discretion on the part of the RTWPB; and
c. Questions of law.

This Primer is in collaboration with MR. ARSENIO L. SEBASTIAN III, RTWPB-X Management
Representative.

For reference, please refer to Wage Order No. RX – 16 and the Rules Implementing it.

You may contact RTWPB-X at Telefax No. (08822) 724210 or email us at

rtwpb10@gmail.com or send us a message at our Facebook Account: RTWPB Northern
Mindanao or visit us at 3rd Floor, FICCO Bldg., Tiano-Abellanosa Sts., Cagayan de Oro City.

TABLE I

EFFECTIVE July 24, 2011 to January 24, 2012:

NON-AGRICULTURE AGRICULTURE
CLASSIFICATIO BASIC COLA NEW BASIC COLA NEW
N WAGE MINIMUM WAGE MINIMUM
WAGE WAGE
RATE RATE
Wage Category I P269.00 P17.00 P286.00 P257.00 P17.00 P274.00
Wage Category II 264.00 17.00 281.00 252.00 17.00 269.00
Wage Category 259.00 17.00 276.00 247.00 17.00 264.00
III
Wage Category 254.00 17.00 271.00 242.00 17.00 259.00
IV

EFFECTIVE January 25, 2012 and onwards:

BASIC WAGE

CLASSIFICATION NON-AGRICULTURE AGRICULTURE

Wage Category I P286.00 P274.00

Wage Category II 281.00 269.00

Wage Category III 276.00 264.00

Wage Category IV 271.00 259.00

RTWPB-X Primer on W.O. RX-16 13

 TABLE II

Wage Category I Cities of Cagayan de Oro and Iligan,

and the Municipalities of Tagoloan, Villanueva and Jasaan;
Wage Category II Cities of Malaybalay, Valencia, Gingoog, El Salvador and Ozamiz,
and the Municipalities of Maramag, Quezon, and Manolo Fortich;
Wage Category III Cities of Oroquieta and Tangub,
and the Municipalities of Lugait, Opol and Mambajao;
Wage Category IV All other areas not covered under the above Categories;
Wage Category V Sugar Agricultural Industry (Covered by Supplemental Wage Order No. RX-
15 A effective February 17, 2011)

TABLE III
a. Amount of Increase in AMW x 100 = % Increase
Previous AMW

b. Existing Rate/Piece x % Increase = Increase in Rate/Piece

c. Existing Rate/Piece + Increase in rate/Piece = Adjusted Rate/Piece

RTWPB-X Primer on W.O. RX-16 14

ANNEX I less than 20% of the paid-up
capital for the same period.
CRITERIA FOR EXEMPTION
c. Conditional Exemption
A. Retail/Service establishment c.1. When the actual net loss as of
employing not more than 10 workers the interim period
1. It is immediately preceding the
engaged in the retail sale of goods effectivity of the Order
and/or services to end users for amounts to at least 25% of
personal or household use. total assets.
2. It is 2. Single Proprietorships/Partnerships
regularly employing not more than a. Full Exemption
ten workers regardless of status, a.1. When the accumulated net
except the owner/s, for at least six losses for the last two (2) full
months in any calendar year. accounting periods
immediately preceding the
B. Distressed Establishment and other effectivity of the Order
sectors adversely affected by the amounts to 20% or more of
economic crisis as determined by the the total invested capital at
Board the beginning of the period
1. For Corporations/Cooperatives under review; or
a. Full Exemption a.2. When an establishment
a.1. When the deficit as of the last registers capital deficiency
full accounting period i.e., negative net worth as of
immediately preceding the the last full accounting
effectivity of the Order period immediately
amounts to 20% or more of preceding the effectivity of
the paid-up capital for the the Order.
same period; or b. Partial Exemption
a.2. When an establishment b.1. When the accumulated net
registers capital deficiency losses for the last two (2) full
i.e., negative stockholders' accounting periods
equity, as of the last full immediately preceding the
accounting period effectivity of the Order
immediately preceding the amounts to at least 10% but
effectivity of the Order. less than 20% of the total
b. Partial Exemption invested capital at the
b.1. When the deficit as of the last beginning of the period
full accounting period under review.
immediately preceding the c. Conditional Exemption
effectivity of the Order c.1. When the actual net loss as of
amounts to at least 10% but the interim period
immediately preceding the

RTWPB-X Primer on W.O. RX-16 15

 effectivity of the Order Exemption may be granted to a
amounts to at least 25% of bank or quasi-bank under
total assets. receivership or liquidation when
3. Non-Stock Non-Profit Organizations there is a certification from the
a. Full Exemption Bangko Sentral ng Pilipinas that it
a.1. When the accumulated net is under receivership or
losses for the last two (2) full liquidation.
accounting periods b. Under Controllership/
immediately preceding the Conservatorship
effectivity of the Order A bank or quasi-bank under
amounts to 20% or more of controllership/ conservatorship
the fund balance/members' may apply for exemption as a
contribution at the distressed establishment.
beginning of the period; or 5. Establishments Under Corporate
a.2. When an establishment Rehabilitation
registers capital deficiency Exemption may be granted to
i.e., negative fund corporations, partnerships and
balance/members' associations under corporate
contribution as of the last rehabilitation when there is an order
full accounting period or from a court of competent jurisdiction
interim period, if any, that it is under rehabilitation pursuant
immediately preceding the to the Rules of Procedure on
effectivity of the Order. Corporate Rehabilitation (2008).
b. Partial Exemption
b.1. When the accumulated net C. New Business Enterprises (NBEs)
losses for the last two (2) full Exemption may be granted to New
accounting periods Business Enterprises located outside the
immediately preceding the National Capital Region and Export
effectivity of the Order Processing Zones and established within
amounts to at least 10% but two years from effectivity of the Order,
not more than 20% of the classified under any of the following:
fund balance/members' 1. Agricultural Establishments whether
contribution at the Plantation or Non-Plantation
beginning of the period. 2. Establishments with Total Assets after
c. Conditional Exemption financing of 5 million and below
c.1. When the actual net loss as of
the interim period D. Establishments whose Total Assets
immediately preceding the including those arising from loans but
effectivity of the Order exclusive of the land on which the
amounts to at least 25% of particular business entity’s office,
total assets. plant and equipment are situated, are
4. Banks and Quasi-Banks not more than P3 Million.
a. Under Receivership/Liquidation

RTWPB-X Primer on W.O. RX-16 16

 1. Its total assets during the business operations shall be
current year of effectivity of the Order considered.
amounts to not more than Three 4. Where
Million Pesos (P3,000,000.00) necessary, the Board or its duly-
2. Total Assets refer to all kinds authorized representative shall
of properties, real or personal used conduct an ocular inspection of the
for the conduct of business, including establishment or engage the services
proceeds of loans, but excluding the of experts to validate the extent of
land on which the particular business damages suffered.
entity’s office, plant and equipment
are situated. F. Establishments producing gifts, toys
3. Establishment is not registered and housewares (GTH) Items using
as a Barangay Micro Business Indigenous materials as certified to by
Enterprise (BMBE). the Department of Trade and Industry.
1. The establishment is producing gifts,
E. Establishments adversely affected by toys and housewares (GTH) items;
Natural Calamities 2. Using Indigenous Materials;
1. The 3. It is Labor Intensive.
establishment must be located in an
area declared by a competent ANNEX II
authority as under a state of calamity.
2. The natural SUPPORTING DOCUMENTS
calamities, such as earthquakes, lahar
flow, typhoons, volcanic eruptions,
A. Retail/Service Establishment
fire, floods and similar occurrences,
employing not more than ten (10)
must have occurred within 6 months
workers
prior to the effectivity of the Order.
1. Affidavit from the employer stating
3. Losses suffered
the following:
by the establishment as a result of the
a. It is a retail/service establishment;
calamity that exceed the insurance
b. It is regularly employing not more
coverage should amount to 20% or
than 10 workers for at least 6
more of the stockholders' equity as of
months in any calendar year;
the last full accounting period in the
c. Number of employees with its
case of corporations and
corresponding names and date of
cooperatives, total invested capital in
employment.
the case of partnerships and single
2. Business Permit for the current year
proprietorships and fund
from the appropriate government
balance/members' contribution in the
agency
case of non-stock non-profit
organizations.
B. Distressed Establishment and other
Only losses or damage to properties
sectors affected by the economic crisis
directly resulting from the calamity
as determined by the Board
and not incurred as a result of normal

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 1. Corporations, Cooperatives, Single
Proprietorships, Partnerships, Non- D. Establishment whose total assets are
Stock, Non-Profit Organizations: not more than Three Million Pesos
a. Full or Partial Exemption: Audited (P3,000,000.00)
Financial Statements (together 1. Affidavit of the employer stating its
with Auditor’s opinion and the total asset (real or personal property)
notes thereto) for the last 2 full during the current year of effectivity
accounting periods preceding the of this Order;
effectivity of the Order filed with 2. Copy of the latest Income Tax Return;
and stamped “received” by the 3. Current Business Permit
appropriate government agency. The Board may require the submission of
b. Conditional Exemption: Audited other pertinent documents to support the
Financial Statements (together application for exemption.
with Auditor’s Opinion and the
notes thereto) for the last full E. Adversely affected by Natural
accounting period and interim Calamities
quarterly financial statements for 1. Affidavit from the General Manager or
the period immediately preceding Chief Executive Officer of the
the effectivity of the Order filed establishment regarding:
and stamped received by the
a. Date and type of calamity
appropriate government agency,
b. Amount of losses/damages
to be submitted within 30 days
suffered as a direct result of the
from the lapse of the one year
calamity
exemption period.
c. List of properties damaged/lost
2. Banks and Quasi-Banks
together with estimated valuation
a. Certification from Bangko Sentral
d. For properties that are not
ng Pilipinas that it is under
insured, a statement that the
receivership/liquidation.
same are not covered by
3. For establishments under Corporate
insurance.
Rehabilitation
2. Copies of Insurance Policy Contracts
a. Order from a court of competent
covering the properties damaged, if
jurisdiction that the establishment
any;
is under rehabilitation.
3. Adjuster’s report for insured
properties;
C. New Business Enterprises (NBEs)
4. Audited Financial Statements for the
1. Affidavit from employer regarding the
last full accounting period preceding
following:
the effectivity of the Order stamped
a. Principal Economic Activity; received by the appropriate
b. Date of Registration with government agency.
appropriate government agency;
c. Amount of Total Assets;
2. Certificate of Registration from the
appropriate government agency

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F. Gifts, Toys and Housewares (GTH) 2. Certification from the Department of
items made of Indigenous Materials Trade and Industry that the applicant
1. Affidavit from employer stating the company is producing GTH items
following: made of indigenous materials;
a. Nature and description of 3. Current Business Permit.
business/economic activity;
b. Number of male and female The Board may require submission of
employee/workers; other pertinent documents to support the
c. Total Assets; application for exemption.

BOARD SECRETARIAT
Board Secretary VI Ms. Estrella Uy-Pahalla
Supervising LEO Ms. Myrna B. Callo
Labor and Employment Officer III Ms. Odette Leh V. Caragos

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Administrative Assistant III Ms. Neofita T. Japos
Administrative Aide VI Mr. Jose Lestil C. Guilaran
OJT – Legal and Training Officer Ms. Mouhmina Amaneeh D. Sharief

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 REGIONAL BOARD
Chairperson
Atty. Alan M. Macaraya, CEO III
RD DOLE – X

Vice-Chairpersons
Dir. Leon M. Dacanay, Jr., CEO III Dir. Linda O.Boniao, CEO V
RD NEDA – X RD DTI-X

Management Representatives
Mr. Arsenio L. Sebastian III Mr. Prudencio T. Plaza, Jr.
Oro Chamber COCI

Labor Representatives
Mr. Jose B. Ares Mr. Milbert M. Macarambon
ALU-TUCP AWATU-TUCP

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RTWPB-X Primer on W.O. RX-16 22