Wage hike to hurt MSMEs? Gov't should subsidize them, Espiritu says

Wage hike to hurt MSMEs? Then gov’t should subsidize them, Espiritu says

/ 03:01 PM February 16, 2024

A labor leader and a House lawmaker agreed that the government should subsidize the wage increase for employees of micro, small, and medium enterprises (MSMEs) if the concern against the proposed wage hike is the possibility of hurting small businesses.

Labor leader Luke Espiritu. PHOTO FROM OFFICIAL FB PAGE

MANILA, Philippines — A labor leader and a House lawmaker agreed that the government should subsidize the wage increase for employees of micro, small, and medium enterprises (MSMEs) if the concern against the proposed wage hike is the possibility of hurting small businesses.

At The Agenda forum in San Juan on Friday, labor leaders Luke Espiritu and Leody de Guzman, along with Agri party-list Rep. Wilbert Lee were asked about the views of economists in the House of Representatives — that the Senate’s P100 across-the-board minimum wage hike proposal would hurt MSMEs.


In response, Espiritu said that the ‘MSME argument’ is being exploited by huge businesses who do not want to increase the minimum wages.


“You know who uses the MSMEs argument?  Big businesses, ECOP (Employers Confederation Of The Philippines), they always say ‘MSMEs would lose profits.’  But you are not a part of MSMEs; why are you gaining from that MSME argument?” Espiritu asked in Filipino.

“Can you imagine? The big multi-million businesses benefit from the fact that what is given to workers is a minimum wage.  They benefit from that, not MSMEs.  Now, why would you let poor workers shoulder the businesses of MSMEs? If you, government, really want to support MSMEs, you subsidize the wage increase, support it fully so that MSMEs would be okay,” he added.

Espiritu, who ran for senator in the 2022 national elections, asked big businesses to refrain from using MSMEs to cover their intention to repeal any salary increase proposals.

“Why would you force them (workers) to yield capital for MSMEs?  You government should, if you want MSMEs to prosper, bring in capital to MSME, and not the poor workers,” he said.

“And you big businesses, refrain from using the MSMEs argument when it’s you who would benefit while you earn billions.  So the government has that obligation [to treat them separately],” he added.

READ: Helping MSMEs realize their dreams


De Guzman, who ran for President, said that companies must remember that the heart of a firm’s profit are workers.

“First, we must understand that there’s no profit if there are no workers.  Even if your machine or computer is made of gold, even if you field handsome and beautiful managers, if the worker is not there, there is no profit.  There is no development if not for workers,” de Guzman.

Rep. Lee meanwhile agreed with the two, saying that he has been in favor of wage increases — even though the proposed increases may not be enough for now.

“Me, I am in favor of the higher wages, but it is also correct that this is still insufficient,” Lee said.

“It’s an eye-opener for me what they said, we are talking about it — that if the reason against wage increases are MSMEs, can’t we find a way to treat MSMEs differently, with the government providing subsidies so that MSMEs do not lose profit and are able to comply with requirements.  So we’re looking at that,” he added.

Last Monday, economic experts in the House — Marikina 2nd District Rep. Stella Quimbo, Albay 2nd District Rep. Joey Salceda, and Deputy Speaker Rep. David Suarez — opposed proposals to increase the minimum wage.

Suarez said the proposed P100 daily wage hike sounds good but may lead to the compromise of MSMEs.   Salceda meanwhile said many MSMEs would not be able to carry the brunt of higher wages for workers, which may eventually affect the economy since 99 percent of businesses in the country belong to that category.

Quimbo, an economics professor at the University of the Philippines, also warned that this wage increase may be inflationary since companies would just pass on the burden of paying higher salaries to the cost of services or goods they offer.

READ: Economists in House say P100 wage hike may hurt MSMEs, push inflation

Salceda said back then that it may be good if the policy could only be applied to big companies so that MSMEs would be shielded.  However, the lawmaker did not give an example of how it can be done.

“If we can only do this for big companies, it’s okay but this would hit MSMEs eh, all of it would die.  They cannot handle that, since 99 percent of our enterprises are MSMEs,” Salceda explained.

Last Wednesday, the Senate approved a bill pushing for a P100-daily minimum wage increase for private sector workers as a Valentine’s gift to laborers.  Senate President Juan Miguel Zubiri appealed to the House to take up this measure, as it is important to help workers — especially those from Visayas and Mindanao who get a lower minimum wage rate.)

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READ: P100 daily wage hike bill gets Senate nod on 2nd reading

TAGS: Luke Espiritu, MSMEs, wage hike

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