Lawmaker fears wage hike may cause MSMEs to close down, lay off workers

A lawmaker on Thursday warned that a wage hike in the private sector may cause micro, small, and medium enterprises (MSMEs) to close down or lay off their employees.

"Ipapasa mo ang burden na ito sa maliliit na negosyante na ang posibleng gawin ay magsara o magbawas ng empleyado (you will pass this burden to small businesses and they may choose to close down or lay off some of their employees)," said Iloilo Representative Janette Garin in a press briefing. 

"'Yan ang mas masakit, kasi (that really hurts because) at this point of time, the primary goal of the government should be sustaining all existing businesses," she added

The lawmaker’s remark came a day after the Senate approved on second reading a bill seeking to increase the daily minimum wage of workers in the private sector to P100.

In his manifestation before the second reading, Senate President Juan Miguel Zubiri appealed to the House of Representatives to pass a similar bill.

"Maganda talaga ang intensyon ng Senado at ito nga ay good news sana pero ang dami naman kasing batas na nagpapaasa pero tila walang pag-asa if we talk about really uplifting the lives of our people," said Garin, vice chairperson of the House Appropriations Panel and a member of the labor and Employment committee.

(The Senate's intention is good and this should be good news but there are many laws that are passed that give hope but are not really doable if we talk about really uplifting the lives of our people.)

Garin also stressed that MSMEs are also among the government’s constituents.

"Hindi lamang po ‘yung mg empleyado ‘yung ating constituents. Constituents din po natin ‘yung MSMEs. Kung tinutulungan natin ‘yung mga 4Ps at ‘yung mga walang trabaho… maganda ‘yun. Pero hindi ‘yun ang buong Pilipinas,” she said.

(Employees are not our only constituents. MSMEs are also constituents. We help 4Ps and those with no employment… and this is good. But it’s not the whole country.)

Garin added, however, that Speaker Martin Romualdez’s directive was to study the grant of an increase higher than what the Senate intends to approve.

“Ang direktiba talaga ni Speaker noong ito’y napag-usapan ay kung puwede, ipatupad 'yon at medyo ang liit talaga ng P100. Hindi siya kakayanin. Kaya dapat malaki siya. So there was a discussion na baka nasa mga P350 o P400,” she said.

(The Speaker's directive when this was discussed is, if possible, to achieve this, but also that P100 really small. It should be bigger. So there was a discussion that it should be P350 or P400.)

Labor and Employment Secretary Bienvenido Laguesma previously warned that the wage hike proposal may create difficulties for businesses. Despite this, he said it would be “contentious” to say that businesses will not be able to sustain the P100 increase.

Meanwhile, in an interview on Super Radyo dzBB on Thursday morning, Partido Manggagawa national chairperson Renato Magtubo said that the proposal is “better late than never.”

Magtubo also said he believes that though employers may face a reduction in profit, they would not go bankrupt.

"Patunay namin diyan ang last wage increase na itinakda ng Kongreso, 1989 pa. So ngayon, 2024 na, 'di ba. So 35 years… ‘yun din rason ng employers, hindi kaya. Pero may mga nakita ba tayong nagsara? Wala naman," he said.

(We can prove this through the last wage increase passed by Congress in 1989. It’s now 2024. So it’s been 35 years… this was also the reasoning of the employers back then. But did any of them close down? No.)

"So parang patunay na hindi totoo 'yung scenario na kapag tumaas ang suweldo ng manggagawa ay magsasarahan at tataas ang presyo ng bilihin," he added. 

(So this is proof that the scenario where the wage increase will cause closures and more expensive products is not true.)

Magtubo said there were also other policies that would increase the purchasing power of the take-home pay of employees such as keeping electricity and water prices the same. —with Tina Panganiban-Perez/KBK/BM, GMA Integrated News