The National Economic and Development Authority said the proposed P100 wage hike for workers will adversely affect small businesses.
Rose Edillon, NEDA undersecretary for national policy planning, said the micro small and medium enterprises (MSME) may not afford the wage hike.
“Let’s say for instance, businesses had savings from the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Law. The savings from CREATE will not be enough to cover the additional wage payout,” she said, referring to incentives given to companies.
MSMEs account for more than 99 percent of business establishments and for 63 percent of the country’s workforce.
The current minimum wage for workers in Metro Manila stands at P610 per working day for non-agriculture jobs, while for the rest of the regions, their minimum wages are between P500 to P300 across all types of jobs.
Senators on Monday approved the Senate Bill 2534 seeking to hike by P100 the minimum wage in the private sector nationwide.
The measure, seen to benefit some 4.2 million minimum wage earners, was passed amid opposition from business groups that said a P100 salary hike is not the solution to challenges faced by Filipino workers.
The daily minimum wage in the National Capital Region (NCR) stands at P610 for non-agriculture jobs and P500 to P300 across all types of jobs outside NCR.
Sen. Jinggoy Estrada, chairman of the Committee on Labor, justified the approval by citing the last legislated wage increase was in 1989 with the enactment of Republic Act 6727 or the Wage Rationalization Act, when the wage was raised by P89.
But the law also declared wages would be set on a regional basis by regional wage boards.
At least 20 business groups, in a statement last week, asked the Senate to “rethink” the proposed legislated wage increase, saying it will hurt companies while benefitting only a few workers.
Instead of focusing merely on wage increases, the groups said, the Senate should adopt a more comprehensive approach to address economic inequality, including investing in education, skills development, and infrastructure, as well as creating an enabling environment for business growth and job creation.
“Another wage hike through legislation coming at the heels of the recently implemented minimum wage adjustments through the wage boards is not the appropriate solution to address the underlying challenges faced by our Filipino workers,” the groups said.
