AMA UNIVERSITY, QUEZON CITY

Online Education Department

59 Panay Ave, Quezon City

Notice of Acceptance of Thesis Adviser

Date: April 29, 2019

Name of Student Renelito D. Tangkay

Name of Program Masters in Business Administration

The Cost of Living in Boracay: A Study Why Region 6 Minimum

Proposed Title
Wage is Not Applicable in the Island

This is to certify that I accept to be the thesis adviser of the above-named student and has validated
his/her thesis title as described in this form.

Signature of
Thesis Adviser:

Name of Thesis
Adviser:

Approved by:

___________________________
Dean
 AMA UNIVERSITY, QUEZON CITY
Online Education Department
59 Panay Ave, Quezon City

Thesis / Dissertation Proposal Approval Form

Date: April 29, 2019

Name of Student Renelito D. Tangkay

Name of Program Masters in Business Administrations

Proposed Title The Cost of Living in Boracay: A Study Why Region 6 Minimum
Wage is Not Applicable in the Island

Background and Rationale of the Study

Introduction

Boracay is a small island in the Philippines located approximately 315KM

south of Manila and 2KM off the northwest tip of Panay Island in the Western

Visayas Region or Region VI. Apart from its white sand beaches, Boracay is

also famous for being one of the world’s top destination for relaxation. The

island comprises the barangays of Manoc-manoc, Balabag, and Yapak in the

municipality of Malay, in Aklan Province. In 1978 the Philippine Tourism Agency

(PTA), now Tourism Infrastructure Economic Zone Authority (TIEZA) was given

control of Boracay when President Marcos declared Boracay a tourist zone and

a marine preserve through presidential proclamation No. 1801, s. 1978. After

enactment of the Local Government Code on 1991, the island was being

administered by the provincial government of Aklan.

 This Island can be accessed from Philippines major cities; Manila and

Cebu by airplane through Caticlan-Boracay Airport, Kalibo International Airport

and Ilo-ilo City International Airport then followed by a 20-minute boat ride from

mainland Malay to the Island. In the island, the basic mode of transport are

tricycles, habal-habal and e-trikes in the main road and mostly walking along

the beaches.

Boracay Island and its beaches have received awards from numerous

travel publications and agencies. It was awarded as the 2012 best island in the

world from the international travel magazine Travel + Leisure. In 2014, the

resort island was at the top of the Best Islands in the World list published by the

international magazine Condé Nast Traveler. In 2016, Boracay headed the

magazine's list of Top 10 destinations to watch.

According to the Aklan Provincial Tourism Office, the island of Boracay

generated a total of 56,147,744,220.60 in tourism receipts for the year 2017

alone. The “tourist-spend” receipts in 2017 increased by 14.83% as compared

to the 2016 figure of 48,895,469,783.40. The said earnings came from the

2,001,974 tourists the island received in 2017, a little above of the two million

target tourist arrivals.

 Figure 1.1 Philippine Map showing the Island of Boracay

Background of the Study

Boracay is among the most expensive island in the Philippines to work

and live. For overview, a P20.00/kilo banana in the mainland costs P40.00/kilo

here in Island while a normally P30.00 per 5 gallons of water costs P80.00 here.

Thus, other than the legislative review of minimum wage fixing in this Island, the

workers need more protection from the government, both local and national

level, against some abusive businessmen; who (1) priced their products and

services too high, and (2) pay employees very low. But now, most of the

establishments are greedy. Some worker-friendly employers, like Hotels and

Restaurants, collect service charge from their customers’ billings in addition to

occasional tips from satisfied guest and even give incentives to their staff for

them to cope up with the Island’s high cost of living. However, those working in

other industries wherein there are no tips or service charge, like workers in

construction companies, delivery boys in ice plants, clerks in souvenir stores,

cashiers & baggers in malls, security guards, and the like, minimum wage is

definitely not enough to the skyrocketing monthly rents, utilities like water and

electricity, expensive food, and transportation wherein the minimum fare is

almost double in the mainland Malay, thanks to the local politicians who are

also tricycle owners approving this unreasonable fare matrix.

Since the first Wage Order by the Commission that took effect last

November 27, 1990, Boracay wage rate is the same with the rest of the

Region,which is now a Tourist-destination haven. The current minimum wage in

this Region, is 295.00 (including 5.00 COLA) per day for companies employing

not more than 10 employees while 365.00 (including 15.00 COLA) per day for

those employing more than 10 (Non-Agriculture Section).

 Table 1.1: Current Minimum Wage Rates in Western Visayas

Statement of the Problem

Statement of the Problem

Progress in Boracay tourism development has in fact brought large

impact of Malay Economy moving from fourth class municipality to being first

class category. However, it is evident that the current minimum wage is not

enough for the workers to afford decent standard of living for themselves and

for their families. Torii et al., (2011) noted that Boracay workers show that they

are at the lowest level and this is a reflection of uneven distribution of wealth in

this industry.
 While it is evident that businessowners in the Island can afford higher

salary to their staff, they can however can defend themselves that they are only

obliged by law to pay workers based on the current minimum wage rate.

Purpose/Objective of the Study

Purpose/Objective of the Study

The purpose of this study is to prove that the current minimum wage in

Boracay Island should not be the same with the rest of the Region. In order to

protect the labor sector’s welfare and well-being, the NWPC-DOLE, in

coordination with the Department of Trade & Industry (DTI) should have a

different set of criteria in computing minimum wage in Boracay as a separate

special tourism zone rather than as part of the whole Region.

Labor is a primary social economic force and as mandated by the

Constitution, the State shall protect the rights of workers and promote their

welfare. Article XIII of the Constitution dealing with Social Justice and Human

Rights provisions mandates to afford full protection to labor and guarantees that

workers shall be entitled not only to security of tenure and humane conditions of

work but also a living wage and participation in policy and decision-making

processes affecting their rights and benefits as may be provided by law.

The Constitution requires the State to implement a living wage which is

defined as one that ensures a "decent standard of human existence beyond

mere subsistence level" in contrast to a minimum wage which is the basic payor
 daily wage plus cost of living allowance received by a worker, not falling under

the exemptions as provided under the Wage Rationalization Act.

Verily, the minimum wage fixed by law is lower than the ideal living wage.

Still, compliance by corporations and other work establishments has remained a

persistent problem and it is very disturbing, to say the very least. With enhanced

monitoring by the DOLE and the new teeth that is being proposed in this

measure, it is expected that the mantle of protection we can stretch for our

workers will be much more assured.

Significance of the Study

Significance of the Study

The results of the study will be of great benefit to the following:

• Employees. This study is directly intended to help Boracay workers to

understand how much daily wage they should be receiving to correspond with

the Island’s cost of living.

• Management. The results of this study can also guide the Management in

setting salary standard to their staff.

• Local Labor Groups. Generally, labor groups are the organizations that

coordinates with NWPC-DOLE and RTWBPs for an increase in the Daily

Minimum Wage.
 • NWPC-DOLE. As a wage-setting body, this department may refer to this study

in revising their criteria of determining the minimum wage in the Island of

Boracay.

Research Methodology
Research Methodology

In this chapter, the research design, area of study, population and

sample size, sampling technique, research instrument, validation of the

questionnaire, and method of data collection will be discussed.

Research Design

The researcher choses a survey research design since it is the most

appropriate design of this study. The survey research is one in which a group of

people or items is studied by collecting and analyzing data from only a few

people or items considered to be representative of the entire group. In other

words, only a part of the population is studied, and findings from this are

expected to be generalized to the entire population (Nworgu 1991:68).

Area of Study

The respondents were all workers in the Island of Boracay, the subject matter of

this study. This Island has three barangays or districts; Manoc-manoc, Balabag,

& Yapak. In addition, price comparisons will be conducted to determine

difference in prices for a family’s basic needs in Boracay, mainland Malay (the

town where Boracay is located), Kalibo (the capital town of Aklan) and Ilo-ilo

City (the business center of Region 6).

Population and Sample Size of the Study

The target population of this research defined to include Boracay

(A) formal workers;

(1) who are receiving minimum wage,

(2) those receiving below minimum wage,

(3) those receiving above minimum wage; and

(B) informal workers;

(1) tricyle drivers,

(2) freelancers / commissioners

(3) vendors, since their salary / income is the subject matter of this study.

Before the 6-months Boracay temporary closure for rehabilitation on April

2018, the Public Employment Services Office (PESO) of Malay, Aklan gathered

data as to how many Boracay residents and workers will be affected by this

closure. This data is helpful in determining the sample size for this study.

WORKERS Number %

Registered (Formal Sector) 17,735 65%

Unregistered (Informal Sector) 9,365 35%

TOTAL 27,100 100%

Table 3.1: Data from the PESO Malay Aklan of Boracay Workers
 For some studies, the population may be small enough to warrant the

inclusion of all of them in the study. But a study may entail a large population

which cannot all be studied. That portion of the population that is studied is

called a sample of the population (Nworgu 1991:69). A sample in this study is,

therefore, a smaller group of elements drawn through a definite procedure from

an accessible population. The elements making up this sample are those that

are actually studied.

Using the sample size formula, with 10% margin of error, 95%

confidence level, 27100 population size and 50% response distribution, the

sample size of this study is a total of 96 respondents.

Sample size = where;

N = population size • e = Margin of error (percentage in decimal form) • z = z-score

Sectors # %

1 Formal Sector 62 65%

Receiving minimum wage 21

Below minimum wage 21

Above minimum wage 20

2 Informal Sector 34 35%

Tricycle drivers 11

Freelancers/commissioners 11

Vendors 12

TOTAL 96 100%

Table 3.2: Sample size of Boracay workers included in the study

Sampling Techniques

Expert purposive sampling technique was used for selecting the

participants of this study. This technique was used since the researcher needs

to gain knowledge from individuals that have particular knowledge and

experience about the subject matter. One-third or total of thirty-two formal and

informal workers were picked on each three districts of Boracay.

Research Instruments

The researcher designed a questionnaire titled “Survey about Boracay

cost of living and the appropriate wage level in the Island” was used in the data

collection instrument for this study. This questionnaire (see Appendix 1) was

aimed at eliciting relevant information about the cost of living in Boracay and the

appropriate minimum wage in this Island. It has 3 sections:

• Section A – data on Respondent’s personal profile

• Section B – on Price Comparison

• Section C – on Minimum Wage

The instrument was structured into modified Likert fashion, on a 4 – point

scale, ranging from “strongly agree” (SA), through “agree” (A), “disagree” (D) to

“strongly disagree” (SD) wherein respondents are instructed to respond to their

degree of agreement with the statements contained in the instrument;

Another instrument is the Price Comparison Sheet used in comparing

prices for determining cost of living in Boracay. It has four columns; Column-1
 Boracay Price, Column-2 mainland Malay price, Column-3 Kalibo, Aklan price

and Column-4 Ilo-ilo City price.

Methods of Data Collection

Ninety-six copies of the questionnaires were administered directly to the

chosen sample for the study - the workers/respondents while for price

comparison, costs of each items were manually surveyed to ensure that correct

prices are used in data analysis.

Statistical Treatment

To interpret the data effectively, the research employed the following statistical

tools:

1. Percentage. This will determine the frequency counts and percentage

distribution of personal related variables of the respondents.

Formula : P = (F/N) x 100

where: P = Percentage (%)

F = Frequency

N = total number of respondents

2. Weighted Average Mean. This will used to determine the assessment of

respondents with regards to their personal profiles and their responses in

questionnaire which are answerable with pre-determined choices.

Formula : W = Fx/N

Where W = Weighted Mean

F = Frequency
 x = weight of each item

N = number of cases

3. N-Way Anova. This variation of ANOVA (analysis of variance) statistical

technique was used in determining the difference of prices of goods

(independent variable) in Boracay from the rest of Region 6 (dependent

variables).

Formula : Refer to Appendix 3: N-Way Anova Formula

Expected Outputs and Derivations

Hi Prof Ali,

I am not familiar with this Section Expected Outputs and Derivations, may I know is this
Section supposed to appear in Chapter 3 – Research Methodology or in Chapter 4 – Results
and Analysis?

Thank you.

References

REFERENCES

Belman, Dale, and Paul J. Wolfson. 2014. What Does the Minimum Wage Do?
Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
https://doi.org/10.17848/9780880994583
Daniel Aaronson, Eric French, and James MacDonald (2010). The Minimum Wage,
Restaurant Prices, and Labor Market Structure. J. Human Resources July 1,
2008 43:688-720
Evardone, P. (2018, Jan 10). Boracay tourism earns P56B in 2017. Philippine
Information Agency. http://pia.gov.ph/news/articles/1003886
Fowler, L. (2015, Dec. 18). Top 10 Destinations to watch in 2016. Conde Nast
Traveler. Retrieved from https://www.cntraveller.com/gallery/best-travel-
destinations-2016
Gary Blake and Robert W. Bly, The Elements of Technical Writing, pg. 117. New York:
Macmillan Publishers, 1993. ISBN 0020130856
Malig, J. (2012, July 7) Boracay named 2012 world's best island. ABS-CBN News.
Retrieved from news.abs-cbn.com/lifestyle/07/06/12/boracay-named-2012-
worlds-best-island
National Statistics Office. Total Population by Province, City, Municipality and
Barangay: as of May 1, 2010. 2010 Census of Population and Housing.
Retrieved July 27, 2018
N-Way Anova (2018). Mathworks. Retrieved July 15, 2018 from
https://www.mathworks.com/help/stats/n-way-anova.html#d119e28094
Neumark, D. and W. Wascher (1992), “Employment Effects of Minimum and
Subminimum Wages: Panel Data on State Minimum Wage Laws,” Industrial
and Labor Relations Review, 46, 55-81.
Nworgu, B.G. (1991). Educational Research: Basic Issues and Methodology. Ibadan:
Wisdom Publishers Ltd. 192 pp
Michael Reich, Ken Jacobs, and Annette Bernhardt. (2014). “Local Minimum Wage
Laws: Impacts on Workers, Families and Businesses”. IRLE Working Paper No.
104-14. http://irle.berkeley.edu/workingpapers/104-14.pdf
Pacqueo, V. & Olivar G. (2015, May 10) Is minimum wage bad for poor? Philippine
Daily Inquirer. Retrieved from http://opinion.inquirer.net/84763/is-minimum-
wage-bad-for-poor
Scherer, J. and Drescher, C. (2017, Oct. 17). The Best Islands in the World. Conde
Nast Traveler. Retrieved from https://www.cntraveler.com/galleries/2014-10-
20/top-30-islands-in-the-world-readers-choice-awards-2014
Torii, Takashi & Masaaki, Sano & Mizuho, Kuga & Lizada, Joy & Kitolelei, Jokim.
(2011). Tourism Development in Boracay Island and its Impacts on the Local
Communities.
Wikipedia contributors. (2018, July 4). Boracay. In Wikipedia, The Free Encyclopedia.
Retrieved 12:26, July 14, 2018, from
https://en.wikipedia.org/w/index.php?title=Boracay&oldid=848788968

Reviewed and Endorsed by: Approved by:

Thesis/Dissertation Adviser Dean, AMAU Online Education Department

Date:
 AMA UNIVERSITY, QUEZON CITY
Online Education Department
59 Panay Ave, Quezon City

Research Consultation Form

Date: April 29, 2019

Renelito D. Tangkay
Name of Student

Masters in Business Administration

Name of Program

The Cost of Living in Boracay: A Study Why Region 6

Research Title Minimum Wage is Not Applicable in the Island

Medium of
Date Time Topic(s) Discussed Remarks
Consultation

This is to certify that

Candidate for the Degree of has met with me in
conference during my Consultation, as indicated in the days above.

Research Adviser
Department of
 AMA UNIVERSITY, QUEZON CITY
Online Education Department
59 Panay Ave, Quezon City

Research Progress Monitoring Report

Date: April 29, 2019

Renelito D. Tangkay
Name of Student

Name of Program Masters in Business Administration

The Cost of Living in Boracay: A Study Why Region 6
Research Title Minimum Wage is Not Applicable in the Island

To be accomplished by the Research Proponent: To be accomplished by the Adviser

Completed Chapter(s) / Part(s)
Chapter 1 Introduction Comments and / or Suggestions

Chapter 2 Review of Related Literature

Chapter 3 Research Methodology

Chapter(s) / Part(s) in Progress Comments and / or Suggestions

Difficulties Encountered Comments and / or Suggestions

Changes from Previous Plan, if Any Comments and / or Suggestions

Renelito D. Tangkay

__________________________ ___________________________
Proponent(s) / Student(s) Professor