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SMEs, retail sector to feel blow from minimum wage hike, say Iloilo business leaders

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THE NEW business district in Iloilo City, the regional center of Western Visayas. — BW/ERSSANTIAGUDO

By Emme Rose S. Santiagudo, Correspondent

RETAIL BUSINESSES along with small and medium enterprises (SMEs) are likely to feel the blow from the higher minimum wage rates in Western Visayas that will take effect on Nov. 26.

“Generally, it is good for the employees, but we have to consider the fact that our employers in the region are mostly small and micro-entrepreneurs so they will be greatly affected by this,” Ronald U. So, incoming Philippine Chamber of Commerce and Industry-Western Visayas incoming regional governor, said in a phone interview Friday.

The daily wage for employees in non-agriculture, industrial and commercial businesses with more than 10 workers will increase by P30 to P395 from P365. Those in establishments with up to 10 workers will get a P15 increase to P310 from P295. For the agriculture sector, there will be a P20 adjustment to P315 from P295.

Mr. So said some SMEs could be forced to limit their manpower due to limited income and other resources. He also said that unlike hospitals and other tourism-related establishments that can increase their service rates, most in the trading sector will likely see a negative impact from the higher wages.

Iloilo Business Club (IBC) Executive Director Lea E. Lara also said retail businesses will likely make adjustments to cope with the increased pay for workers.




“Most of the businesses here (in Iloilo) are into retail and those businesses have low profit margin so the effect will be either they increase their prices or cut down their employees,” she said in a separate interview on Friday.

Mr. So said they have been pushing for two years now to have different wage categories in the region that will take into consideration SMEs as well as micro businesses.

In a position paper submitted to the Regional Tripartite Wages and Productivity Board, PCCI is proposing to categorize salaries based on the classification of the Department of Trade and Industry (DTI), namely: micro, small, medium, and large enterprises.

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