NCR wage hike may affect micro enterprises —ECOP

The Employers Confederation of the Philippines (ECOP) on Friday expressed concern for micro enterprises if they can shoulder the cost of higher daily minimum wage in the National Capital Region (NCR).

Interviewed on Dobol B sa GTV, ECOP president Sergio Ortiz-Luis Jr. said the group will encourage its members to comply with the wage order.

Ortiz-Luis, however, said, “Ang worry lang namin ‘yung mga micro [enterprises].”

(Our only worry is the micro enterprises.)

On Thursday, the Department of Labor and Employment (DOLE) announced that NCR’s Regional Tripartite Wages and Productivity Board issued, on June 26, 2023, Wage Order No. NCR-24, which increased the daily minimum wage for non-agriculture and agriculture sector workers by P40.

The adjustment brought the daily minimum wage in NCR to P610.00 from the current P570.00 for non-agriculture sector workers.

For those in the agriculture sector, service, and retail establishments employing 15 or fewer workers, as well as manufacturers regularly employing less than 10 workers, the daily minimum wage was hiked to P573.00 from P533.00.

The order is set to take effect on July 16, 2023.

The ECOP chief said that while he does not think that the wage hike will compel micro enterprises to close shop, “maraming nag-aabbang na micro na baka hindi na tumuloy magbukas, mag-operate, o magdagdag ng tao (many micro businesses looking to start may not continue to operate or increase their staff).”

Ortiz-Luis urged the government to help micro businesses that will be affected by the wage hike.

He said that 90% of all enterprises in the Philippines are micro, while about 8% are small and medium are less than 2%.

He added that 65% to 70% of workers in the formal sector are employed by micro enterprises.

Micro enterprises are defined as those having less than 10 employees and have an asset size of up to P3 million.

Small businesses are those with 10 to 99 employees with an asset size of P3 million to P15 million, while medium enterprises are those that employ 100 to 199 workers with asset size of over P15 million up to P100 million.

Not enough

The Federation of Free Workers (FFW), meanwhile, said the wage increase is not enough to compensate for the rising cost of living in the region.

“The increment falls significantly short of the more than P100 wage recovery that our labor force had been anticipating. It also fails to reflect the escalating cost of living in Metro Manila. As such, we stress that the struggle for a fair, living wage is far from over,” FFW said.

Partido Manggagawa (PM) shared the similar sentiment, saying the wage increase “is way below the P100 – P1,140 wage hike petitions filed by several labor groups since December last year.”

“We are disappointed as the order not only came late but also because it was not the workers but primarily the side of business that was considered in this decision,” PM said.

Senate push

The Senate Committee on Labor, Employment and Human Resources Development on Friday also said that it will still push for the legislated wage hike despite the approval of a P40 increase in the daily minimum wage in Metro Manila.

"Nevertheless, this does not mean that bills proposing adjustments in workers' wage rates which are currently pending before my Committee on Labor, will be put on the back burner," said Senator Jinggoy Estrada, the committee's chairman.

Estrada said the matter will be taken up "[a]s soon as Congress resumes its Second Regular Session."

In March, Senate President Juan Miguel Zubiri filed a bill to increase the minimum wage of private workers by P150 amid the soaring inflation in the country. —Ted Cordero/ VAL, GMA Integrated News