TAX incentives given to small and medium enterprises (SMEs) will enable them to “absorb” the proposed P100 daily wage hike for minimum wage earners, Sen. Sherwin Gatchalian said yesterday.
He said the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, the second package of the Comprehensive Tax Reform Program, reduced corporate income tax rates to 20 from 30 percent. He said SMEs actually increased their gross earnings to around 12 percent due to the lowering of their income tax, which will enable them to give the P100 a day wage increase.
“The Senate also looked into the earnings of SMEs, including big enterprises. Because the corporate income tax or CREATE Law went down from 30 percent to 20 percent, their gross profits increased to around 12 percent. That’s why we decided to increase the daily wage to P100 because many of our SMEs can absorb this,” Gatchalian said in Filipino during an interview with Teleradyo Serbisyo.
The Senate this week passed on third and final reading the P100 daily legislated wage increase for minimum wage earners after lawmakers observed that the minimum wage of P500 to P610 a day is not enough to live a decent life.
Based on studies, a family of four needs around P1,100 a day to live decently.
The approval came amid opposition from business groups.
Gatchalian said he voted in favor of the bill as he saw the current minimum wage is not enough to live a decent life.
The last legislated wage increase was in 1989 with an increase of P89 a day.
Gatchalian said the original proposal was for a P150 daily increase but this will be a burden to SMEs.
He said increasing the daily minimum wage was given priority by the Senate instead of the amendments to the Constitution because it concerns the lives of minimum wage earners.
He said he is amenable to proposals for a staggered wage increase but there is no provision in the proposed measure for it.
He said this can be remedied in a bicameral conference committee meeting once the House of Representatives passes its version of the measure.
The Trade Union Congress of the Philippines (TUCP) yesterday urged the House to pass the pending P150 across-the-board wage increase for private sector workers proposed by deputy speaker Raymond Democrito Mendoza of the party-list group TUCP.
“As Filipino workers struggle with already-low wages eroded by inflation and various headwinds, the legislated wage hike is no longer a social or economic imperative but a moral and existential imperative, especially for our millions of mostly poor wage earners,” said TUCP.
The Philippine Health Insurance Corporation (PhilHealth) yesterday said it is open to a proposal of Rep. Stella Quimbo to suspend the premium payment of minimum wage earners amid high prices.
“We are studying this proposal just like all other proposals that will benefit a large number of our people,” said PhilHealth Vice President for Corporate Affairs Group Rey Baleña.
He said they are computing the possible decrease in PhilHealth premium if the proposal is approved.
“We want to be able to quantify the member contributions that will be lost if this proposal is realized,” he said. — With Gerard Naval
