NEDA warns MSMEs may struggle with PHP100 minimum wage hike

The National Economic and Development Authority (NEDA) expressed concerns that micro, small, and medium-sized enterprises (MSMEs) may struggle with a proposed PHP100 minimum wage increase in Congress.

NEDA Undersecretary Rosemarie Edillon stated on Monday that the savings from the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law would not be sufficient to cover the additional costs of the PHP100 wage hike approved by the Senate.

The House of Representatives is still studying different proposals, including hikes ranging from P350 to P150.

Calixto V. Chikiamco, president of the Foundation for Economic Freedom (FEF), warned that a legislated wage increase could lead to job losses and business closures among SMEs.

The FEF also noted that informal workers would be adversely affected by higher inflation without benefiting from mandated daily wage increases.

Mr. Chikiamco suggested liberalizing imports as an alternative way to raise consumer disposable income.