MINIMUM wage earners in Central Visayas will start to enjoy their pay hike this week.
But businesses aren’t totally happy—especially the small players.
The P18 salary increase approved by the Regional Tripartite Wages and Productivity Board (RTWPB) 7 in December 2019 took effect Sunday, Jan. 5, 2020.
The region’s daily minimum wage now ranges from P351 to P404, compared to P313 to P386 under the previous wage order.
Cebu Chamber of Commerce and Industry (CCCI) president Virgilio Espeleta pointed out this will mostly affect micro, small and medium enterprises (MSMEs).
“Make no mistake, we want to achieve prosperity and share to our valued work force the rewards of our business undertaking. However, such mandated wage increase has to consider the impact among the 95 percent plus of MSMEs,” the business leader told SunStar Cebu.
“This scheme penalizes businesses more in less developed economies,” he said.
Espeleta said companies have sought to translate any pay hike into productivity of workers.
“While we want to alleviate and improve their take-home pays, we wish to translate pay to performance and productivity. It’s a sad reality there never was such clear agenda in the RTPWB on productivity,” the CCCI official said.
He said employers are even willing to “pay more” to competent and productive workers.
“While inflation rate has been contained, we learned that RTWPB imputed regional poverty gap in the computation making businesses pay more just to reduce poverty level in their particular region or province,” he noted.
Central Visayas’ inflation rate was slower than the nationwide 1.3 percent in November, hovering at 1.1 percent that month, based on Philippine Statistics Authority data.
Inflation is one of the key factors considered in wage adjustments, along with cost of living and prevailing economic conditions.
The MSME sector, which currently accounts for about 99 percent registered enterprises in the country, is “vulnerable to increasing cost of doing business without the economies of scale that large corporations are enjoying,” Espeleta said.
“Yet, they are an integral part in the ecosystem since they are the main conduit to the large corporations. If managed, supported and nurtured well, perhaps they have a bigger chance to become our future large corporations than micro-businesses,” he added.
Under the new wage order, workers in the non-agricultural sector in Class A cities and municipalities will now be paid P404 daily after getting an P18 increase.
Workers in the agriculture sector in these areas will get an increase of P26 to P394 from P368.
Those employed by establishments with less than 10 workers will also get P394 after an increase of P18.
Class A cities are Carcar, Cebu, Danao, Lapu-Lapu, Mandaue, Talisay and Naga. Class A towns are Compostela, Consolacion, Cordova, Liloan, Minglanilla and San Fernando.
The wage order does not cover household workers and workers of establishments registered as barangay micro business enterprises.
In 2018, Central Visayas was the fourth biggest contributor to the country’s 6.2 percent gross domestic product growth.