Warns less than 1% of businesses large enough to adjust pay

Micro, small and medium enterprises – which account for over 99 percent of all business enterprises – must be taken into consideration before making a decision on the proposed P200 legislated daily wage increase, the Department of Labor and Employment said on Saturday.

“Whether it’s doable or not doable, perhaps, to put it in its proper context, out of the more than one million enterprises in the Philippines, more than 95 percent are MSMEs. So let’s see,” Labor Secretary Bienvenido Laguesma said.

Laguesma clarified the Labor department is not opposing the proposed measure.

“Congress is the one that has the mandate or responsibility to pass or propose laws. If there is a law, we will implement it,” Laguesma said.

He said together with the National Economic and Development Authority and the Department of Trade and Industry, DOLE provided technical inputs on the proposed wage hike’s possible impact on employment and economy.

Data from the Philippine Statistics Authority showed that 1,246,373 business enterprises were operating in the country as of 2023.

MSMEs comprised 99.63 percent or 1,241,733 of the total, while only 0.37 percent or 4,640 were large enterprises.

Micro enterprises constituted 90.43 percent or 1,127,058 of total establishments, followed by small enterprises at 8.82 percent or 109,912, and medium enterprises at 0.38 percent or 4,763.

MSMEs accounted for a total 6,351,466 jobs or 66.97 percent of the country’s total employment, with micro enterprises producing the biggest share (33.95 percent), closely followed by small enterprises (26.26 percent) and medium enterprises (6.77 percent).

Earlier, President Ferdinand Marcos Jr. said the proposed wage hike needs further study, citing concern over its possible impact on the MSMEs.

The House Committee on Labor and Employment on Thursday approved a substitute bill mandating a P200 daily across-the-board wage increase for private sector workers.

Under the bill, employers are prohibited from offsetting the increase with previous wage adjustments unless explicitly anticipated under collective bargaining agreements.

The DOLE chief likewise highlighted the role of the Regional Tripartite Wages and Productivity Boards (RTWPBs) in setting minimum wages at the regional level.

He said the last legislated national wage increase was in 1989, after which the regional wage boards were established to tailor wage adjustments to local economic conditions.

“These boards ensure that minimum wages do not fall below a set floor level, but additional benefits and salaries above the minimum should be negotiated between workers and employers,” Laguesma said.