MANILA, Philippines—Factory wages in the Philippines may be higher than elsewhere in Asia, but the country is still the only key manufacturing center in the region where labor productivity has faltered over the years, research by global consulting firm Mercer suggests.

In a study on business competitiveness of six emerging markets—the Philippines, China, India, Indonesia, Thailand and Vietnam—Mercer has found that the Philippines to be handicapped by higher labor costs in the manufacturing sector even as its factory productivity fell from 2.3 percent in 1995-2000 to a marginal 0.9 percent in 2000-2005.

“The good news is, the Philippines is still in the middle of the pack as far as labor productivity is concerned,” Mercer managing director for ASEAN, Su-Yen Wong, said at a news briefing.

Productivity, the gross domestic product or output of each person employed, was noted to be strongest in Thailand among the countries in the set.

Wong noted that the Philippine manufacturing sector was paying more for both management and front-liners than its competitors in the region.

Annual base salary for factory managers was shown to be at par with counterparts from Thailand or China, but the pay scale was much higher for rank-and-file workers. Because of the high educational attainment of the workforce, she said, Filipinos were able to command relatively higher wages.

Wong said the migration of skilled workers could affect productivity in the short run, but in the long run, reverse migration could benefit the country like what is happening in China and India.

“Productivity is not only a factor of the individual, it’s also a factor of the environment, the organization, the quality of training, investments and equipment,” she said.

“To remain competitive, the challenge is basically how to improve labor productivity so as to be able to keep providing higher base salary and wages to workers over time,” she added. With editing by INQUIRER.net