TRANSCRIPT: INTERPELLATION- WAGE HIKE BILL

SBR On this note, will the good. Uh, gentleman from San Juan, my best friend, my good friend, yield to some clarificatory questions.

SJE Mr. President, how can I, uh, refuse my ka-kosa,

SBR Okay, Mr. President. Ang tagal na natin hinihingi itongincrease na ito, 14th Congress pa lang 2008 kung hindi ako nagkakamali. 125 pesos na yung umento ng sahod na hinihingi natin tapos habang nagtatagal umabot na ng P150 na gusto sana natin na increase. Bakit po naging P100 lang ang proposed increase natin?

SJE Thank you, Mr. President. The proposed increase to P100 is based on the consultations made by the committee with, uh, including the stakeholders concerned, but the original proposal was one hundred fifty pesos across the board, ngunit marami pong kontra dito. Particularly yung mga business establishments. If, my memory serve me right, nagtaas ang Regional Wage Board ng P40 dito sa Metro Manila nagkaronng wage hike dito sa Metro Manila kaya ngaing P610 ang ,minimum wage. Kung idadagdag natin ang P150, marami ng aalmang establishments kaya ni-lower down natin to P100.I think that is more reasonable. And we took into consideration the increase granted by the Regional Wage board, which ranges from P30 pesos to 89 pesos in most regions last year. Hence, the committee came up with P100 increase only for the minimum wage earners, again, only for the minimum wage earners. Across the board.

SBR: Kailan po ba tayo huling nakapag pasa ng batas para magkaroon ng across the board the umento sa sahod ng ating mga manggagawa?

SJE I think we were here, uh, during the last, uh, I think 13th Congress when I passed the P125 pesos across the board here in the Senate. But unfortunately, it did not touch first base in the house. And, uh, I think they withdrew the, the, uh, bill in the house. First of all, the bill, they approved the bill in the house for 125 peso across the board wage increase. They elevated it, when it reached in the Senate, I as, your chair of the Committee on Labor then, again, passed the same bill. Actually we adopted the bill of the House of Representatives, but unfortunately when we passed it, the, uh, house of Representatives, I do not know among the congressmen there, withdrew the 100, withdrew their own bill. So, wala pong nangyari. So the last, it was the 13th Congress we've been proposing the wage hike, the Senate, when this representation introduced Senate Bill 2573, If I am not mistaken, which proposed a P125 across the board wage increase.

And in the 14th, 18th Congress, the following bills were filed in the previous congresses, but remain pending in the, uh, the committee, first of all, the 14th Congress 125 across the board, wage increase by this representation, former Sen Trillanes, and Senator Revilla Sa Congress wala pong nag file ng Legislated Wage hike.

Sa 16th, Congress nag file si Senator Revilla ng P125 across the board, 17th Congress wala po, 18th Congress, masigasig si Sen Revilla nag file ng P125 na across the board wage increase. And the last legislated wage hike was by virtue of Republic Act 6727 or Wage Rationalization Act

SBR This was 34 years ago, am I correct?

SJE Yes. 1989, yes, you are correct, Mr. Correct.

SBR So magkano po ang naging increase noon compared to the prevailing minimum wage that time?

SJE The prevailing minimum wage noon is P69 per day at nagkaron ng P25 increase pursuant RA 6727, Mr President

SBR Bali ilang % po ng minimum (inaudible)

SJE Approximately 40%

SBR With our current average minimum wage, Mr President, ilang % average last increase (inaudible)

SJE Well, here in the NCR, the increase in percentages 7.7, approximately 7% for areas outside of the National Capital Region, the percent increases ranges from 6.7 in regions six and, uh, to two point to 11.9% in region 11.

SBR Okay. May I ask Mr. President, because we want to compare it if we were progressing, or regressing when it comes to the wage hike being granted to our workers? Mr. President, um, so in 1989, upon the, the enactment of the Wage Rationalization Act 25 (inaudible), uh, resulting in non-agricultural, uh, basic, uh, wage of, uh, 18 pesos in all regions around around, uh, 39.1% increase. Now, the current minimum wage in, NCR for the non-agricultural sector is, P610. Uh, with this in mind, factoring in the current inflation rate, does the current minimum wage have more purchasing power or lesser purchasing powers, Mr. President?

SJE Mr. President, uh, the minimum wage in Metro Manila for the non-agricultural sector consistently recorded the highest basic pay ,the country had P610 per day. However, the actual daily pay is eroded by inflation and the real value of the minimum wage, which reflects the, uh, inflation adjusted rates using the consumer price index, has fallen to P514.50 in the capital as of July 2023, and has further decreased to 504 pesos for October 2023. And this scenario is, uh, replicated across all regions. Biro mo yung P610 tinatanggap ng ating manggagawa purchasing power, therefore, the purchasing power lesser, that's why I was prompted to file this bill kasi nakaka awa na ang ating mga manggagawa

SBR How much, uh, should the family of five earn in a day to day that they are earning a living wage?

SJE Mr. President, we have not received any data regarding the, uh, current, uh, living wage. But on the other hand, uh, we are familiar with IBON Foundation of the University of the Philippines, calculated that as of January 24, the family wage in Metro Manila is 1,190 compared to the current minimum wage of P610 malaki ang disparity. In other regions are around P1,100, between 1,200 compared to their minimum wage, ranging from 380 pesos, to P510 pesos only. Sa BARRM P2026 compared to its minimum wage of P341 kaya Malaki ang discrepancy

SBR Magkano po ba ang kilo ng bigas, sa ulam magkano ang kalahating kilo ng manok (inaudible) Kahit na anong computation talagang kulang at kulang. Kaya napaka halaga nitong sinusulong nyo ngayon. Saludo ako sa iyo, na fast track mo ito, sana pag naipasa natin ito dito sa Senado ay maipasa na din sa Lower House

SJE Maraming salamat po Ginoong Pangulo, kaunting kasagutan lang po, yung mga binanggit nyo, bigas, tinola, ito ay pang araw-araw na pagkain, paano pa kaya pag mas mahal. Hindi maka afford na kumain ng mas masarap, mas mahal na pagkain dahil nga limited ang kanilang budget ang pinaka murang bigas ay nasa mahigit P50 per kilo, mataas din po ang presyo ng ibang bilihin. Dahil dito di po sapat ang tass ng sahod na pinapanukala natin subalit ito yung tinatawag nating middle ground upang mabigyan ng dagdag sahod ang mga tunay na nangangailangan.

SBR That's correct Mr President kaya talagang nakaka awa ang iba nag uulam ng asin. Kulang talaga. On this note, Mr President, I thank you again, pinapasalamatan din natin ang ating Senate President

INTERPERLLATION OF SEN RISA HONTIVEROS

SRH: Thank you, good sponsor. Actually bago yung mga nakahanda kong mga tanong habang pinakikinggan ko po yung interpellation sa inyo ng ating good gentleman mula sa Cavite at pinaalala po ninyong dalawa yung panukala 35 years ago na P125 across-the-board wage increase o basta yung kung namali po ako sa ilang taon po ba yun na nakaraan na. Pero yung panukala noon, naiisip ko mula dun sa original na panukala ninyo good sponsor ng P150 papunta dito sa ating tinatalakay na P100 ah, Ano kaya ba't hindi naging P125 na lamang muli tulad noon?

SJE: Ang pinapanukala po natin ay P100 lamang, hindi po P125. Yung P125 po nagbuslo po iyan nung nakapagpasa po ang House of Representatives ng isang batas na legislated wage hike na P125 across-the-board at wala pa ho kayo rito, hindi pa ho kayo senador andito na po ako noon at nung narefer po sa aking komite, Committee on Labor, agad-agad po ay nagsagawa tayo ng hearing para maipasa po itong 125 across-the-board. Katulad nga nung sinabi ko kanina kay Senator Revilla nung naipasa po ng Senado ang P125 across the board, ay winithdraw naman po ng ibang miyembro ng House of Representatives ang kanilang sariling batas, ang kanilang sariling panukala na sila mismo ang nag-apruba kaya hindi po natuloy ang P125 across-the-board wage increase.

SRH: Sayang po talaga, good sponsor, at mahiwaga. Naisip ko nga bakit hindi na lang natin inulit yung proseso at baka magtagumpay ngayon.

SJE: Well, sana po kung maipasa po natin itong panukalang batas na ito at maibalik sa House of Representatives, sana po ay gawan nila ng aksyon dahil nakita naman natin ang patuloy na pagtaas ng bilihin at katulad nga ng sinabi ko kanina yung P610 na tinatanggap ng ating mga manggagawa dito sa kalakhang Maynila ay P504 na lang ang purchasing power.

SRH: Kaya nga po eh tinanong ko bakit hindi na lang ang ating panukala ay P125 sa halip na P100, good sponsor.

SJE: Originally, Mr. President ang aking panukalang-batas ay P150. Nagtaas po ang Regional Wage Board ng P40 dito sa Metro Manila. From 570, naging P610. If I will stick to P150 baka marami nang magsarang business establishments. Kaya po binabaan po natin na P100 para tugma pa rin doon sa P150 original na pinapanukala po natin.

SRH: Sige po, good sponsor, iwan ko na muna doon sa ngayon yung isyung ito dahil tulad din ng tinutukoy n'yo na yung minimum wage ang ang totoong purchasing power ay mas mababa eh hindi naman siguro sana magrereklamo yung mga manggagawa natin sa dagdag Php25 wage hike sana yung pagitan ng kasalukuyang P100 at yung tinatanong ko lang naman naka P125 muli.

SJE: Kaya naman din po umabot sa P100 pesos. Based from the consultations made by the different stakeholders concern, Mr. President.

SRH: I understand, good sponsor, and as I promised I'll leave that question here for now. Anyway po, matagal pa po ang ating pinagkakaisang mga adbokasiya dito sa senado papunta halimbawa sa isang living wage para sa mga manggagawa na magiging sustainable din sa iba pang stakeholders sa ating ekonomiya. Anyway, good sponsor, paano po tutugon yung good sponsor sa hiling ng labor na rebisahin natin yung Regional Tripartite Wages and Productivity Boards sa ilalim ng RA 6727. I-review daw po natin yung Regional Wage Boards na yan kasunod ng inaasahan din po nilang pag-apruba nitong ating P100 Wage Hike Bill.

SJE: According to my staff, there are several proposed bills that we can hear and probably we can get the inputs of the stakeholders concern, Mr. President, in the appropriate time, Mr. President.

SRH: Salamat, good sponsor, naglo-look forward din po ako diyan. Ngayon po, in the Philippines, wages can be increased through three primary mechanisms. Legislative action tulad ng ginagawa natin ngayon yung Regional Wage Boards nga po yung wage wrders nila at saka Collective Bargaining Agreements. Apart from these, there's also the possibility of employers themselves voluntarily raising wages on their own initiative in the exercise of management prerogative which, however, is not a common practice.

SJE: Do you know of any business establishments who volunteered to increase the salaries of their respective workers? I have heard of nothing, Mr. President.

SRH: Siguro po, good sponsor, kaunti lamang o maliliit lamang kaya po't hindi naibabalita. Kaya ang literature lamang po ay it's not a common practice, it's a rare practice. Maybe so rare we don't often hear about it. So now, with the current discussions surrounding the Regional Wage Boards rule following the P100 wage hike bill, questions arise. Halimbawa po, kino-consider ba natin na bawiin yung authority ng mga Regional Wage Boards mag-isyu ng wage orders at in fact may contemplation ba tayo ng isang alternatibong wage system na maaaring pumalit sa Regional Wage Boards.

SJE: As I've mentioned earlier, Mr. President, maybe we can thoroughly review all the proposed bills that are pending before this committee with regard to the Regional Wage Boards, Mr. President.

SRH: Salamat, good sponsor at siguro once we start deliberating on those bills bukod sa posibleng pagbabago sa mandates ng Regional Wage Boards, papasok na rin yung posibilidad ng alternative wage system kasama na rin yung kaugnay na konsepto ng living wage.

SJE: I agree, Mr. President.

SRH: Salamat, good sponsor. Now, section 3 of our bill states that "the minimum wage rate of all workers in the private sector weather agricultural or non agricultural shall be increased by 100 pesos a day upon the effectivity of this act." Ito po ba good sponsor ay magiging across-the-board para maiwasan yung wage distortion?

SJE: Yes, this is across-the-board but it only applies to minimum wage earners only, Mr. President.

SRH: Okay, po. Malinaw po iyon. Ano po yung magiging base ng Php100 per day increase mula ba sa halaga ng wage board orders sa bawat rehiyon?

SJR: You're correct, Mr. President. Salamat, good sponsor. At sabi niyo nga po, good sponsor, only for minimum wage earners. So, ibig bang sabihin hindi po covered yung managerial employees?

SJE: No, it's not covered, Mr. President.

SRH: Ito po bang measure iko-cover din yung micro-enterprises?

SJE: If it is less than 10, I don't think so, Mr. President.

SRH: So kung less than 10, kung micro enterprises na less than 10 employees hindi mako-cover nito, paano naman po yung mga manggagawa sa mga micro-enterprises na yan?

SJE: Mr. President, as a general rule, kasama po ang micro enterprises but if they have a certification from Department of Trade and Industry (DTI) as a Barangay Micro Enterprise (BME), I think they are not covered, Mr. President.

SRH: Kung meron nga silang DTI certification bilang Barangay Micro Enterprise at less than 10 employees po sila Itong mga micro-enterprises na ito, paano na nga po itong mga empleyado nila na hindi makikinabang dito sa ating P100 Wage Hike Bill.

SJE: Mr. President, with regard to the question of our colleague, Senator Risa, according to the representatives from the Department of Labor who are present right here today, there are only 56,000 BMBE establishments all over the country. And we have the BMBE law, RA 9178, that exempts them from the minimum wage law. And because of the minimal capitalization of only 3 million pesos, I think they are exempted from the minimum wage law, Mr. President.

SRH: I understand that, good sponsor. Ang mahirap lamang ay, 90% of formal labor actually are in micro enterprises. So kung exempted sila o magiging exempt sila dito sa ating P100 Wage Hike Bill, ibig sabihin, 10% lang ng formal labor ang makikinabang dito. I'm not saying na sitwasyon ito na imposibleng ma-resolve kasi may kasabay naman akong tanong na kung maisasama pati yung mga empleyado sa mga micro enterprises which actually are 90% of formal labor. Dapat pa rin nating itanong: may mga paraan bang i-mitigate yung impact sa micro enterprises. Considering yung micro enterprises din lang ang dumami o tumaas ang bilang nung pandemic, so may ipinakita silang resilience at siyempre kailangan din naman nating pangalagaan ang interes nung mga maliliit na entrepreneurs.

SJE: I agree with you, Mr. President. Siguro at the appropriate time, maybe we can welcome any proposed amendments coming from your honor with regard to the BMBE law, Mr. President.

SRH: Salamat, good sponsor. So, based on that agreement of the good sponsor that 90% of formal labor are in micro enterprises at yung agreement din nila na kailangan din nga nating pangalagaan yung interes ng mga maliliit na entrepreneur. Then, I look forward to at the proper time proposing amendments para sa konsiderasyon ng good sponsor. Maraming salamat po sa inyo, salamat, Mr. President.

INTERPELLATION OF SEN WIN GATCHALIAN

Senator Jinggoy Ejercito Estrada (SJE): ... Department of Labor. the biggest increase in minimum wage is P110 in region 6. that means Region 6 ... Negros. that was in 2022,Mr. President. and there was an affect in the region but has a very minimal effect in the national figures Mr. President in our economy, a very very little effect. it was very minimal Mr. President

Senator Sherwin Gatchalian (SSG): and so Mr. President I think that is the best example that an increase in minimum wage does not necessarily mean increase in prices of products translates to inflation especially if there is only one region because you can bring in other products from other region that can mitigate the inflationary effect of wage increase.

SJE: I agree Mr. President

SSG: And Mr. President I was looking at the wage increase. A lot of it came in 2023 if my information is ...

SJE: yes...

SSG: in 2023 the talk about inflation revolves around energy, food prices and transportation Mr President. and I don't recall reading anything about inflation due to increase in minimum wage mr. President. So, again that's another example Mr. President that it doesn't necessarily mean that an increase in minimum wage will translate into a inflation

SJE: yes, Mr. President

SSG: because looking at the historical increases we did not see any significant change in terms of prices of goods. so that's the point that I wanna make Mr. President. and maybe later on we would like also request from the good sponsor through DoLE and the other experts to study this angle (???) and furnish this representation that angle of historical experiences

SJE: yes Mr. President we will comply with the request of the good senator from Valenzuela.

SSG: Mr. President another topic that I read in the internet is a competitiveness of our country in terms of labor costs. and may I ask the good sponsor just here in ASEAN, the 11 countries in ASEAN how are we faring in terms of labor costs?

SJE: I think I have it here Mr. President with all due respect to the Senate President.

Senate President Migz Zubiri (SP Zubiri): Okey

SJE: In Myanmar, I think, in Myanmar Mr. President the ... in dollars 'no? Ang tinatanggap nila ay 69... the daily minimum wage for non agricultural is 2.31 US dollars in Myanmar and in Laos, Lao People's Democratic Republic they receive 2.11 dollars, in Bangladesh 2.49 dollars a day, in Pakistan 3 dollars. Mongolia 7 dollars, Cambodia 6.7 dollars, Vietnam 6.39 dollars, Thailand 10 dollars, Indonesia 10.35 dollars, Malaysia 12.21 [dollars], China 12.16 [dollars], Taiwan 27.03 [dollars], Hong Kong 38.39 [dollars], South Korea 57.89 [dollars], Japan 56.47 [dollars], New Zealand 111.37 [dollars], Australia 222.71 [dollars], Philippines 10.83 in NCR, Region 11 7.86, Region IV-A 9.23, Region VII 8.31, and Region III 8.87 Mr. President

SP Zubiri: Mr. President may I just make, I'd just want to find out ... (garbled) figures are the same because we already updated our figures from Malaysia. Malaysia is now 13.8 dollars that's about daily minimum wage 758 pesos, Jakarta is 724 they just increased the minimum wage 724 pesos ang Indonesia, in Singapore they do not have a daily wage. They have a minimum monthly wage of about 32,000 pesos. If you divided by ... 2,000 pesos a day, if you, or more ano, about 2,200 pesos a day yung Singapore.

Even Taiwan just recently they did (?) minimum wage increase. It came out all over the news. Taiwan increased their ...

SJE: ...in dollars, how much?

SP Zubiri: ...magkano? 26 dollars and 95 cents a day in Taiwan.

SJE: right now it's 27.03 Mr. President

SP Zubiri: 27, okey I stand corrected Mr. President.

SJE: as of January 31, 2024

SP Zubiri: and I was told by the Vietnamese Ambassador they are also going to do a... because of the rice industry...because of their phenomenal growth rate and being the darling of investors their labor force now is uneasy and they asking also for a increase in minimum wage. So they are looking at increasing also the minimum wage. Right now there are about 500, I think about 520 pesos. But ang difference sa kanila yung owners wala silang kaltas. Being a communist country wala silang PhilHealth, wala silang mga taxes kasi libre yata...yung Pag-Ibig wala din sila kasi yung pabahay nila dun libre eh, yung ospital nila dun libre. So technically tinanggal na natin yung mga kaltas ng ating mga minimum wage earners. It's not a big difference from Vietnam. So mas maganda nga na mas mataas taas...pwede natin itaas pa ng konti

SJE:. So Mr. President the question of our colleague Senator Gatchalian in terms of wages I think the Philippines is competitive but I think there is still a lot of room for improvement Mr President

SSG: thank you Mr. President. Mr. President may I ask the good sponsor how much is Philippines' wage? Yes, the current minimum wage in the Philippines?

SJE: In NCR it's 610 [pesos] Mr. President. In ... NCR 610 from 573, in CAR, Cordillera 430, in Region I from 402 increased to 435, Region II increased of 30 pesos from ... 430 to 450 siguro 420 to 450, Region 3 naging ah 40 increase naging 500 pesos, Region IV-A 520, Region IV MIMAROPA from 369 naging 395, ...

SP Zubiri: May I just correct the good gentleman? I believe there is two columns. The lower column is that we came from. Is that the agricultural sector? Kasi iba yung agricultural sector iba yung non-agricultural sector. Mas mababa yung agricultural sector. So the list that I have here maybe DoLE can just ... and the sponsor can correct me. For Region I it's 402 for agricultural workers, 435 for non-agri, for Region II it's 430 for agricultural workers, 450 for non-agri, for Region III it's 384 for agriculture and for non-agri 500, for Region IV it's 385 for agricultural employees and 520 non-agricultural, for Region IV-B it's 369 for agriciltural, and 395 for non-agricultural. Pero mababa Mr. President. We can see 395 pesos. Sa Region V it's 395 pesos all over the region.

SJE: for Region VI we have 444 agriculture, and 480 for non-agricultural, in Region VII 415 for agricultural and 468 for non-agricultural, Region VIII 375 for agricultural and 405 for non-agricultural, Region IX 368 pesos for agricultural and 381 for non-agricultural, Region X 411 for agricultural and 438 for non-agricultural, Region XI 438 pesos for agricultural and 443 for non-agricultural, In Region XII 382 for agricultural and 403 for non-agricultural, Region XIII 374 agricultural and 385 for non-agricultural, BARMM 306 for agricultural and 341 for non-agricultural Mr. President. Napakababa talaga nitong mga tinatanggap nilang sahod Mr. President.

SSG: Thank you Mr. President.

Sen. Sherwin Gatchalian (SSG): Thank you Mr. President. Mr. President that's the beauty of our wage structure. It has different wages in different regions. It means... it's in line with the supply and demand in that particular region as well as the living conditions in that particular region. And Mr. Chairman, good sponsor, your honor, this is also a way to disperse development outside of Metro Manila because I heard our Senate President mentioned earlier that Vietnam's minimum wage is 520 pesos equivalent, 'no? If you compare this to let's say Region III, Region III is even lower at 500 pesos. For Region IV-A it's about the same 520. So, in other words if you talk about competitiveness we can actually use the adjacent areas to be competitive. And that's what we want to disperse development outside of Metro Manila because in the goal of attracting investors we don't want them to invest in Metro Manila all the time. We want them to invest in Region III, Region IV-A, so that growth will be dispersed, we wll create employment outside of Metro Manila. And if you look at the wages on those areas they are very competitive. Of course if you look at the entire...if you just look at Metro Manila it might not be competitive because this is the growth center. The demand here is very high. But if you look at Region III, Region IV-A and the other regions they are very very competitive. And that's what we want for those regions to take the bulk of the investments, for those regions to take the bulk of the factories that, who wants to set up here in the Philippines. So, Mr. President, I think the competitiveness discussion should be looked at on what we want in terms of policy and in terms of even development. And I think for now if you look at the other regions they are very competitive vis-a-vis the other ASEAN countries.

Sen. Jinggoy Ejercito Estrada (SJEE): Yes, you're correct, Mr. President. And I think we are competitive as compared to other countries unlike Bangladesh, Pakistan which use a much lower minimum wage Mr. President. But as far as the other countries are concerned like for example Japan, New Zealand, South Korea, and Australia they received not only double but talagang malaki ang tinatanggap nilang daily minimum wage Mr. President as compared to our country.

SSG: yes Mr. President. Those are very developed nations and of course labor, especially minimum wage labor I mean the minimum wage earners there are quite low in terms of numbers Mr. President. But if you look at areas like BARMM, areas like CARAGA or even in the Davao area or Mindanao area Region XII, Region XI they are very competitive 390 pesos in Regikn XII, 443 pesos in Region XI and that's where we want investors and factory owners to go - to those areas.

SJEE: Yes.

SSG: Because equally they have talented people, they have vast amount of land. In fact their land there is much greater than in Metro Manila, in NCR. But of course we also need to invest in infrastructure and that is government side. But in terms of labor competitiveness we can direct those investors towards the rural areas so that development will be equal and dispersed Mr. President. So that's my take on the competitiveness angle Mr. President.

Another item that I think Senator Risa already expounded on this is the impact on MSMEs because I read in the article in the internet that the MSMEs will bear the brunt of this proposal because MSMEs obviously higher minimum wage earners and Senator Risa mentioned earlier there are about 98, 99 'ano, 90 percent, 98, 99 percent of our businesses. And a lot of these MSMEs higher minimum wage earners because their capital is low, because their businesses are small, and their turnover or revenue is also quite small.

So, my first question Mr. President is how many minimum wage earners are there in the Philippines?

SJEE: Approximately 4.2 million Mr. President.

SSG: and do we have data on how many od them work on MSMEs?

SJEE: Unfortunately Mr. President we do not have any data yet.

SSG: Maybe we can ask the help of DoLE later on to just submit to this representation into the committee that data because we want to know...just on common sense 'no, I think MSMEs are higher minimum wage earners but we want to make sure that in that 4.2 million number how many of them work in MSMEs, how many of them work in large corporations so that we will understand the employment pattern of this 4.2 million individuals Mr. President.

SJEE: Mr. President, I think we can obtain a copy at the Philippine Statistics Authority Mr. President because unfortunately the Department of Labor does not have the data with regard to how many are employed in the MSMEs Mr. President.

SSG: But Mr. President I would like to ask the good sponsor his opinion on the impact on MSMEs and based on the hearings and also his expert knowledge on the matter...is there any concern or any reason that this proposal might have an adverse impact on MSMEs?

SJEE: Before I answer the question I think I have a data here with regard ... the full time wage (???) workers in private establishments receiving exactly the minimum wage per region Mr. President. If I may, the Philippines you were asking ilan yung minimum wage earners ang sagot ko po sa inyo around 4.1 to 4.2 million. And the breakdown is as follows: in the NCR we have 988,000; in Cordillera 10,000; Region I - approximately 170,000; Region II - 64,000; Region III - 736,000; Region IV-A 882,000; Region IV-B 64,000; Region V - 27,000; Region VI - 193,000; Region VII - 364,000; Region VIII - 126,000; Region IX - 95,000; Region X - 144,000; Region XI - 132,000; Region XII - 103,000; CARAGA Region - 65,000; and BARMM approximately 1,064. And if we want to have hard copy I'm willing to submit a hard copy.

Senator Sherwin Gatchalian (SSG): So, Mr. President I would like to get the opinion of the good sponsor as to how this proposal will have an impact to MSMEs. Based on his expert knowledge how..what do you think will be the impact to the MSMEs?

Senate President Migz Zubiri: If I may, Mr. President with the permission of Senator Jinggoy.

SJEE: Yes, please...

SP Zubiri: I believe for the micro walang impact Sir because micro is exempted. So employ... less than 10 workers they are exempted from the minimum wage increase, I believe, under the law of...under the bill of Senator Jinggoy. So yung small and ...is the existing law pala... in the existing law, minimum wage law.

SSG: That means...Mr. President the micro businesses are exempted from ... this particular...

SP Zubiri: ... those with less than 10 employees.

SSG: ... those with less than 10 employees

SJEE: I think I already answered that during interpellation made by Senator Risa Mr. President.

SP Zubiri: so, sa small naman po kasi like business my ice plants are considered medium so... kaya naman. They can absorb it. They can absorb ut. Kasi if you have about 40 employees the increase is not ... mininum. It's not really felt... impact. As a matter of fact I have here your honor, for the record, on a larger company that employs 1,000 people, 1,000 minimum wage earners at ... days a month you are only looking at 26.4 million per year additional costs for the company with a 1,000 minimum wage earner employees. So I don't think it does. That's why I really feel that it wouldn't be inflationary in terms of the effects on micro, rather small and medium enterprise.

SJEE: Maybe minimal effect Mr. President

SP Zubiri: minimal.

SSG: well I think the bottomline Mr President for many entrepreneurs is, especially MSMEs, will it diminish their profit margin. Will they lose money. I think in terms of absorption, I think they can absorb probably depending on the business. but will they lose money because of increasing the minimum wage by a hundred pesos. I think that is the bottomline eh. Everyone is into business because they wanna to make money, they wanna have profit and of course expand their businesses. But will this proposal affect their profit margin and even bring them to the red Mr. President.

SP Zubiri: if I may answer that kasi I am a small business operator. I believe not because of the 25 percent income taxes that we granted them through the CREATE Law. So that's an 8 percent spread of income your honors. If we were still in the regime of 33 percent then maybe we will be more hesitant about passing this minimum wage increase. But since we gave them an 8 percent discount for their income taxes and for medium, small and medium enterprises it's 20 percent. Mas mababa pa Mr. President.

SSG: Correct, Mr. President.

SP Zubiri: so we gave them a...

SSG: 13

SP Zubiri: 13 percent spread. That's correct. You're absolutely correct your honor. We gave them a 13 percent spread of income. So kaya na nila ma absorb sigurado yan your honor

SJEE: yah.

SSG: But Mr. President I also did some simulation on our own looking at the average profit margins of small and medium enterprises. Micro, Mr. President you said is exempted and you're absolutely correct because of that reduction in CID (???) by about 13 percent. Their profit margin remains to be in the double digit figures. For example even if we increase it by a hundred pesos their profit margin for small enterprises is about 13.15 percent. So, it's a decent profit margin. For medium enterprises it's about 14.69 percent. So again a decent profit. Anything double digit for a ... I am sure the good Senate President knows this anything double digit is already good

SP Zubiri: Correct

SSG: you're already above the savings rate or even long term rate Mr. President. So in other words it might diminish a little bit but they're still earning decently Mr. President with the proposal on hand Mr. President. So Mr. President I think the MSMEs will probably enjoy highly motivated workers because at the end of the day they have enough income to bring to their families, to buy medicines. And when they are healthy they can go to work and be more productive Mr. President. And without actually diminishing the profit of our small, medium enterprises Mr. President. So Mr. President that's basically those are the topics that I saw in the internet that came out I think on Monday and again I thank the good sponsor for spearheading this important legislation and I was actually surprised that in NCR it took 10 years to increase a measely 40 pesos Mr President. And we know last year inflation was crazy 'no? So I think Mr. President this proposal will definitely improve the lives of our constituents especially the minimum wage earners Mr. President.

SJEE: Mr. President I stand corrected. In the NCR the last increase was of course last year, June 20th, 2023 (???) 40 pesos. And then May-June 2022 there was increase of 33 pesos, 2018 increasenof 25 pesos, 2017 31 pesos, and 2016 25 pesos Mr. President. So hindi po after 10 years Mr. President

SSG: I stand corrected Mr. President. My data is not accurate on that respect Mr. President. But Mr President again I thank the good sponsor for spearheading this and thank you very much for your time and for answering a few questions Mr. President

SJEE: thank you Mr. President.