Biz sector fears impact of new wages on small enterprises

Laborers work on a building being constructed at Iloilo Business Park in Mandurriao, Iloilo City. Workers will enjoy higher wages next week but the business sector fear the impact on smaller enterprises. (F. A. Angelo)

By: Emme Rose Santiagudo

Wages in Western Visayas will increase by P15 to P30 starting Nov 26, 2019.

While this is generally good news for the growing economy of the region, the business sector fears that the new wage order will have ripple effects on micro and small businesses.

Under the new wage order approved by the National Wages and Productivity Commission, the daily minimum rate of workers employed in non-agriculture, industrial and commercial businesses with more than 10 workers will increase by P30 from P365 to P395.

Businesses with 10 workers and below will implement a P15 increase from P295 to P310. For the agriculture sector, the new daily minimum wage will be adjusted up to P315 from P295, or an increase of P20.

According to Philippine Chamber of Commerce and Industry (PCCI) Western Visayas incoming Regional Governor Ronald So, micro and small enterprises in the region may have a hard time complying with the new minimum rates.

“Generally, it is good for the employees but we have to consider the fact nga ini ang aton employers in the region are mostly small and micro-entrepreneurs so maapektuhan gid ni sila,” he said in a phone interview on Friday.

Bigger businesses may easily adjust wages but small and micro enterprises, with their limited income and resources, may be forced to fire employees, So added.

Unlike hospitals and other tourism related industry where they can increase the rates of their services, So said the trading industry will likely feel the ripple effects of the new wage rates.

“Trading industry is the bottleneck industry here in the region and sadly sila gid ni ang maapektuhan especially those venturing into grocery trading,” he explained.

Iloilo Business Club (IBC) Executive Director Lea Lara shared the same sentiments saying retail businesses in Iloilo will likely be affected by the new minimum wages.

Mga businesses diri they are into retail, businesses, those businesses ang profit margin indi amo na ka dako so the effect will be either mapamahal sila sa ila ginabaligya or mabuhin sila mga tawo,” she said in a separate interview on Friday.

Lara fears the wage hike may impact the inflation in the region in the long run.

The regional inflation rate in September 2019 was at 1.4 percent, according to the Philippine Statistics Authority (PSA).

The inflation rate showed a significant slow-down from the 7.6 percent inflation rate in the same month last year.

To ease the effect of wage orders on small and micro enterprises, So said they have been pushing for the categorization of the salaries in the region before the Regional Tripartite Wages and Productivity Board (RTWPB) for two years now.

Based on their position paper, PCCI propose the categorization of salaries to be patterned with the classification of the Department of Trade and Industry (DTI) namely, micro, small, medium, and large enterprises.


Gapangayo kita sa wage board nga parehason ta categorize ang salaries sa iya sang DTI na may micro, small, medium, and large so that mahagan-hagan gawa naton ang effect sang mga wage hike,” he said.