P18 wage hike ‘could hurt micro, retailers, startup businesses’

Philippine Retailers Association (PRA) Cebu chapter spokesperson Robert Go. (SunStar file foto)

THE Philippine Retailers Association said the P18 wage increase in Central Visayas would hurt the retail industry which is labor intensive.

“There were increases last year already and there are too many holidays, which retailers have still to consider as there would be double salaries on a lot of days. It is hurting operation expense, exacerbated by poor sales because of inflation and sin taxes, sugar taxes and prohibited sales of fun snacks in school and near schools,” said Robert Go, spokesperson of the Philippine Retailers Association-Cebu.”

Even the retailers in provincial areas were not spared, he added.

“Provincial sales dropped tremendously and yet retailers have to pay the increases. This will result in tightening of expenses for them. One out of five employees are employed by retailers and 23 percent are in retail industry so this is a big blow to retailers,” Go said.

Meanwhile, the Cebu Chamber of Commerce and Industry (CCCI) lamented that the P18 salary increase will hurt businesses most especially the micro, small and medium enterprises (MSMEs).

CCCI president Virgilio Espeleta said the increase is already a substantial amount for labor intensive businesses. He said there is a possibility that this will force businesses to streamline operations to address the high cost of doing business.

“Business has to look at productivity this time. We always talk about wage but we never talked about productivity,” he said. “We don’t mind paying higher as long as people are productive,” Espeleta added.

Besides its negative impact to businesses that hire plenty of workers, the wage increase is another hurdle to micro and small entrepreneurs going big in today’s competitive economy.

“It will also be harder especially to those who are still starting their business,” he said.

On Tuesday, Nov. 26, 2019, the Regional Tripartite Wages and Productivity Board-Central Visayas approved the P18 wage adjustment.

With this approval, the new rate for microbusinesses with 10 employees or more will now be P404, while for companies with less than 10 employees would be P396.


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