3 days ago
Business groups warn P200 wage hike may hurt MSMEs, push layoffs
Business leaders and industry groups are urging lawmakers to reassess the proposed P200 daily wage increase approved by the House of Representatives, warning of dire consequences for micro, small, and medium enterprises (MSMEs), as well as the broader economy.
In a statement released Sunday, the Management Association of the Philippines (MAP) said it supports measures to improve the welfare of minimum-wage earners, but cautioned that a legislated P200 increase could do more harm than good.
'We call on the bicameral conference committee to conduct further consultations with all affected sectors, like employers, employees, consumers, and government agencies before reaching a decision,' MAP said.
The group emphasized the importance of considering inflation and business sustainability in policymaking, especially as many MSMEs are still struggling to recover from recent economic disruptions.
'Our basic problem is not low wages, but high costs. We urge the government to focus on reducing food, power, transportation, and housing costs to make our country more competitive,' it added.
The MAP also called on employers to share the burden, urging businesses to help workers by covering mandatory contributions and sharing at least 20% of their net income before tax.
The Philippine Retailers Association (PRA) echoed the concerns, warning that a mandated P200 daily wage hike could trigger layoffs, particularly in the MSME segment that comprises around 70% of retail employment.
'This will cause layoffs in the retail sector,' said PRA president Roberto Claudio, noting that salary distortions across company hierarchies could force businesses to increase pay beyond minimum-wage levels.
The group reiterated its support for the Philippine Chamber of Commerce and Industry's (PCCI) position to leave wage adjustments to the Regional Tripartite Wages and Productivity Boards, which are mandated to assess economic conditions across regions.
The Federation of Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII) also raised concerns over a one-size-fits-all approach to wage increases.
'We respectfully urge policymakers to consider a more balanced, consultative, and region-sensitive approach in determining wage adjustments,' said FFCCCII president Victor Lim.
Last week, the House of Representatives approved House Bill No. 11376 on third and final reading, with 171 affirmative votes and only one dissenting. The bill mandates a P200 daily increase for all minimum wage workers in the private sector, regardless of employment status or industry.
The bill also retains the authority of the Regional Tripartite Wages and Productivity Boards to implement additional increases as needed, under the existing Wage Rationalization Act.
The Senate is expected to deliberate on the measure soon, with growing calls from the business community for a more deliberative and regionally responsive process.
