Employers Warn of Challenges Ahead as Metro Manila Prepares for Wage Hike

The country’s leading group of employers, the Employers Confederation of the Philippines (ECOP), has cautioned that micro-entrepreneurs will be the most impacted by the upcoming ₱50 wage hike for private sector workers in the National Capital Region (NCR). This increase could potentially result in job losses and business closures, especially for small businesses which make up about 90 percent of the country's total businesses.

ECOP President Sergio Ortiz-Luis Jr. highlighted that when considering mandatory employer contributions and benefits like SSS, Pag-IBIG Fund, overtime pay, separation pay, and bonuses, the actual cost of the wage hike could rise by 30 percent, reaching around ₱65 per employee. This significant increase raises concerns about the ability of micro-entrepreneurs to absorb the impact of higher wages.

Under Republic Act No. 6727, small businesses with 10 or fewer workers can apply for an exemption from the wage hike. While this provision aims to prevent job cuts or closures among small businesses, the process of applying for an exemption may involve additional costs such as lawyers’ fees, deterring entrepreneurs from pursuing this option.

ECOP also noted that informal workers in the capital region, such as farmers, fishermen, and tricycle drivers, may be left behind by the wage increase as they do not have employers to provide them with higher pay to offset inflation.

Despite their concerns, Ortiz-Luis stated that employers will comply with the implementation of the ₱50 minimum daily wage hike as it has undergone due process. The increase, announced by the Department of Labor and Employment, will benefit approximately 1.2 million workers in Metro Manila and nearby areas, with the wage hike set to take effect on July 18.

According to the source: mb.com.ph.