Small and medium enterprises (SMEs) in the Philippines that are struggling to absorb recent minimum wage increases will receive temporary government assistance under the new Sagip Trabaho Program, as authorities seek to protect workers while helping smaller businesses remain operational.
The government will shoulder an additional P60 in wages for qualified workers employed by participating SMEs, with the subsidy covering October, November, and December. The program follows the implementation of a P60 daily minimum wage increase in the National Capital Region (NCR).
The Department of Labor and Employment (DOLE) is set to issue the detailed guidelines for businesses seeking to participate, including the documentary requirements and application procedures. Employers will also be required to submit a workers’ performance plan and a business continuity plan intended to demonstrate that the assistance will help preserve jobs and keep businesses operating.
The NCR wage adjustment brings the daily minimum wage to P755 for non-agricultural workers and P718 for workers in agriculture and small retail establishments. The increase is estimated to benefit about 1.1 million minimum wage earners in the region.
Labor officials have said the subsidy is designed to bridge the financial gap for businesses that may not immediately have enough resources to cover higher payroll costs. Eligible employers may also have a 75-day period to seek an exemption from the wage increase, subject to existing rules and requirements.
The assistance comes as the government tries to balance higher worker incomes with the financial pressures faced by smaller businesses. Higher mandatory wages can increase payroll expenses for SMEs, particularly those operating with limited capital and narrow operating margins.
The wage-support initiative is also being considered beyond Metro Manila. Central Visayas, for example, is scheduled to implement a P42 daily wage increase on Oct. 14, raising minimum wages to P582 in Class A areas and P542 in Class B areas.
The latest subsidy builds on other government measures aimed at helping MSMEs adjust to wage increases. DOLE has previously said its Adjustment Measures Program can provide assistance for equipment, productivity improvements, capacity building, and other business-enhancement measures so that companies can better manage higher labor costs.
By temporarily sharing part of the additional wage cost, the Sagip Trabaho Program is intended to help eligible SMEs retain employees and maintain operations while they adjust to the new wage environment.
