Quezon City: 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.

According to Philippines News Agency, DOLE Secretary Bienvenido Laguesma emphasized during the Saturday News Forum in Quezon City that the feasibility of the proposed wage hike needs to be assessed in light of the fact that over 95% of the more than one million enterprises in the Philippines are micro and small enterprises. Laguesma stated, “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 micro, small enterprises and probably you can make your answer out of that. Let’s see.”

Laguesma clarified that DOLE is not opposing the proposed measure. Instead, it is providing technical inputs to understand the potential impact of the wage hike on employment and the economy. He added, “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.”

Data from the Philippine Statistics Authority showed that 1,246,373 business enterprises are operating in the country as of 2023, with MSMEs comprising 99.63% or 1,241,733 of the total, while only 0.37% or 4,640 are large enterprises. Micro enterprises constitute 90.43% or 1,127,058 of total establishments, followed by small enterprises at 8.82% or 109,912, and medium enterprises at 0.38% or 4,763.

Laguesma noted that SMEs have generated 6,351,466 jobs or 66.97% of the country’s total employment, with micro enterprises producing the biggest share (33.95%), closely followed by small enterprises (26.26%) and medium enterprises (6.77%).

He further stated that the DOLE, as the implementing agency, would comply if the wage hike bill becomes a law. “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.

In an interview on Friday, President Ferdinand R. Marcos Jr. expressed that the proposed wage hike needs further study due to concerns over its possible impact on 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. The bill requires all private businesses, regardless of size and industry, to implement a PHP200 daily pay hike upon enactment and prohibits employers from offsetting the increase with previous wage adjustments unless explicitly anticipated under collective bargaining agreements.