By Carmelito Q. Francisco
DAVAO CITY — The approved P56 increase in Davao Region’s minimum daily wage will come in two tranches, with the first installment of P30 taking effect on Aug. 16.
The second tranche of P26 takes effect on Feb. 16, 2019.
The Regional Tripartite Wages and Productivity Board (RTWPB) released on Aug. 1 Wage Order Number 20, which was approved on July 27.
The wage board “has determined the need to restore lost purchasing power of minimum wage earners in Davao Region for them to cope with the rising cost of living without impairing the productivity and viability of business and industries,” the order states.
Davao City Chamber of Commerce and Industry, Inc. President Arturo M. Milan, however, said the increase will hurt micro and small enterprises that make up a majority of businesses in the region.
“I’m scared for the micro and small businesses which comprise about 95% of the total businesses in Davao. They will not only contend with the P56 per day increase or 16% increase in minimum wage but also the 10% increase in local business tax plus the impact of TRAIN (Tax Reform for Acceleration and Inclusion) on their businesses,” Mr. Milan said in a text message.
“I really hope this will not result in retrenchment just for businesses to survive,” he added.
Under the new wage order, companies in the non-agriculture sector, or commercial, industrial, retail, and service businesses with more than 10 workers, will pay a P370 daily minimum salary by Aug. 16 and P396 by Feb. 16, while those with up to 10 employees will have a rate of P355 then P381.
Those in the agricultural sector, on the other hand, will receive P365, then P391.
Last month, the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) warned that the new wage order will inflict another blow on the industry.
PBGEA Executive Director Stephen A. Antig said the P56 increase was not “well thought out,” noting that the banana industry has been reeling from the impact of the TRAIN law and “market and production problems.”