NEDA Undersecretary Rosemarie Edillon (Screengrab from Senate hearing)
MANILA – The National Economic and Development Authority (NEDA) said micro, small and medium enterprises (MSMEs) may not be able to afford the proposed PHP100 minimum wage increase.
NEDA was asked to provide inputs about the proposed wage hike, Undersecretary Rosemarie Edillon said on the sidelines of an economic forum late Monday.
"Ang isa na tinitingan din namin (One of the things we're looking at) is the affordability levels, especially for the MSMEs. We looked at let’s say for instance, savings from CREATE. Kasi isa yan sa pwedeng windfall. (That's one of the windfall). But we saw there for the micro small and medium, hindi nila kakayanin (they will not be able to afford it)," Edillon said.
"The savings from CREATE will not be enough to cover 'yung (the) additional wage increase," she added.
The Corporate Recovery and Tax Incentives for Enterprises (CREATE), which was enacted in 2021, cut MSMEs' corporate income tax to 20 percent from the previous 33 percent.
"For the large, pwede, but only if it covers the minimum wage. The problem is if you increase minimum wage...magkakaroon ng (there might be a) distortion," Edillon said.
Senators on Monday approved Senate Bill 2534, which seeks to hike the salary of workers in the private sector by PHP100.
Under the bill, all minimum wage earners in the private sector nationwide, whether agricultural or non-agricultural, are entitled to the PHP100 increase.
Once passed, any employer found violating the law, will be fined between PHP25,000 and PHP100,000, or imprisonment between two and four years, as well as awarding of back pay. (PNA)
