MSMEs to absorb impact of proposed P200 minimum wage hike – DOLE

By Ruth Abbey Gita-Carlos, Philippine News Agency

MSME PRODUCTS. Various products of micro, small and medium enterprises (MSMEs) are showcased in a trade fair at Fisher Mall in Quezon City on Aug. 21, 2024. The Department of Labor and Employment on Saturday (Feb. 1, 2025) said MSMEs should be taken into consideration before making a decision on the proposed PHP200 daily wage increase. (PNA photo by Robert Oswald P. Alfiler)

MANILA – Micro, small and medium enterprises (MSMEs) should be taken into consideration before making a decision on the proposed PHP200 daily wage increase, the Department of Labor and Employment (DOLE) said on Saturday.

“Whether it’s doable or not doable, siguro (perhaps), to put it in its proper context, out of the more than one million enterprises sa Pilipinas (in the Philippines), more than 95 percent ay nasa (are) micro, small enterprises and probably you can make your answer out of that. Tignan natin (Let’s see),” DOLE Secretary Bienvenido Laguesma said during the Saturday News Forum in Quezon City.

Laguesma clarified that DOLE is not opposing the proposed measure.

Instead, it is providing technical inputs to give an idea about the proposed wage hike’s possible impact on employment and economy.

“Nagbibigay po kami ng mga scenario sa tulong po ng NEDA (National Economic and Development Authority at saka ng DTI (Department of Trade and Industry). Ano ba ang puwedeng maging epekto ng ganitong halaga na may kinalaman sa usapin sa employment level, sa inflation rate at saka sa atin pong tinatawag na (We are providing scenarios, with the help of NEDA and the DTI. What could be the impact of this amount in terms of the employment level, the inflation rate and then what we call) gross domestic product,” he said.

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

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

Micro enterprises constitute 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.

SMEs generated a total of 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).

Laguesma said the DOLE, as the implementing agency, would comply if the wage hike bill becomes a law.

“Sila (Congress) po ang may mandato o responsibilidad na magpasa o magpanukala ng batas. Kung mayroon pong batas, magpapa-implement po kami (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.

In an interview Friday, President Ferdinand R. 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 PHP200 daily across-the-board wage increase for private sector workers.

Under the bill, all private businesses, regardless of size and industry, are mandated to implement a PHP200 daily pay hike upon enactment.

It prohibits employers from offsetting the increase with previous wage adjustments unless explicitly anticipated under collective bargaining agreements.