MANILA – The Department of Labor and Employment (DOLE) emphasized the importance of considering micro, small, and medium enterprises (MSMEs) before implementing the proposed P200 daily wage increase.
DOLE Secretary Bienvenido Laguesma, speaking at the Saturday News Forum, explained that MSMEs, which make up over 95% of businesses in the Philippines, could be significantly impacted by the wage hike.
He noted that the department is not opposing the proposal but is offering technical advice to assess its potential effects on employment, inflation, and economic growth, with the help of the National Economic and Development Authority (NEDA) and the Department of Trade and Industry (DTI).
According to the Philippine Statistics Authority, of the 1.25 million businesses in the country as of 2023, 99.63% are MSMEs. Micro enterprises alone account for 90.43% of this total. MSMEs collectively employ 66.97% of the national workforce, with micro enterprises contributing the largest share.
While DOLE is prepared to implement the wage increase if it becomes law, Laguesma clarified that Congress holds the responsibility for passing such legislation. President Ferdinand Marcos Jr. has also called for further study of the proposal, citing concerns about its impact on MSMEs.
The House Committee on Labor and Employment recently approved a bill mandating the PHP200 wage increase for private sector workers, applicable to all businesses regardless of size. The bill prohibits offsetting the increase with previous wage adjustments unless specified in collective bargaining agreements.
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HOUSE Deputy Majority Leader Janette Garin pointed out that an increase of P350 on minimum wage would be needed for it to be enough to provide for the essential commodities of a worker, saying that opening the country for more investors would make such a wage hike possible.
“Ang tanong dun solusyon ba na magtaas lamang ng suweldo or ang solusyon ay gawing investor-friendly ang Pilipinas. Buksan natin ang ating bansa sa mga foreign investor [para maging posible ang pagtaas ng suweldo ng mga minimum wage earner],” Garin said on Monday.
The P100 daily wage hike legislated by the Senate would still be inadequate for a minimum wage earner and would also injure the business sector, mainly the micro, small, and medium-sized enterprises (MSMEs), citing that almost 95 to 98 percent of the business enterprises are small businesses, the lawmaker said.
However, Garin noted the need to balance both employers and employees as there would be a workforce reduction because companies could not maintain the salary increase costs for their employees.
“Gagawa ka ng magandang batas pero ang dagok naman nun — ilan naman ang mawawalan ng trabaho, ilan naman ang mga kompanyang magsasara [dahil hindi kakayanin ang pa-sweldo sa mga empleyado]… Karamihan kasi ng mga negosyante sa Pilipinas ay maliliit, iilan lang dyan ang nasa malalaking kompanya,” she said.
In 2023, the Philippine Statistics Authority said that 1,080,810 are business enterprises; of these, 99.58 percent are MSMEs. Also, MSMEs hold 63 percent of the labor force in the country.
Earlier, the Iloilo lawmaker stressed that the members of the House of Representatives have been studying the proposed legislation to ascertain if it would be doable.
“Kung pamumulitika lang ang iisipin ng Kongreso, dapat sana pinasa na kaagad ‘yan at sinabi, oh bahala na ang taumbayan. Pero hindi po ganoon ang Kongreso. Tinitingnan natin, doable ba ito o hindi ba doable,” Garin said.
Meanwhile, the vice chairperson of the Committee on Appropriations said that Charter Change would be needed to boost the country’s economy and increase the salaries of the labor force.
“Bakit ayaw nating buksan ang ekonomiya ng Pilipinas at papasukin natin ang foreign investors… Papasok sila, papasok ang malalaking kumpanya, tataas ang sweldo [ng mga tao]. Iikot, gaganda, tataas and ekonomiya ng Pilipinas,” the lawmaker said.