Small and medium-sized enterprises can absorb a P100 legislated wage hike after Congress lowered corporate income taxes, a senator said Thursday.

The Senate on Monday passed on third reading Senate Bill No. 2534, which seeks a P100 daily minimum wage increase for employees and workers in the private sector.

Twenty senators voted in favor, with zero negative vote and no abstentions.

Senate OKs P100 wage hike bill

Sen. Sherwin Gatchalian said he voted in favor of the bill since the living wage is already at P1,100.

"Kaya ako bumuto in favor, binabaan ito. Ang original proposal is P150 na medyo mabigat sa small and medium enterprises. Ang living wage ngayon ay P 1,100. Ang ating minimum wage naglalaro sa P500 to P610 so kalahati lang kaya marami sa ating pamilya hirap," he said in a TeleRadyo Serbisyo interview.

He added: "Tiningnan din ng Senado ang kita ng SME kasama na ang malalaking enterprises pero dahil bumaba nga 'yung corporate income tax sa CREATE Law…from 30% to 20% kaya lumaki 'yung kanilang kita. Pumapalo ng around 12% yung kanilang gross profit dahil sa pagbaba ng income tax kaya sa aming computation dahil P100 lang ang idagdag, marami sa ating small and medium enterprises ay kaya nilang mag-absorb itong ganitong pagtaas ng (sahod)."

Gatchalian said the wage hike takes priority over charter change since it affects minimum wage earners.

"Talagang malapit ito sa sikmura ng taumbayan kaya ito ang inuna ng Senado para maramdaman agad ng ating kababayan," he said.

The lawmaker said he is also open to study a proposal for a staggered wage hike but noted there is no provision for such in the Senate version of the bill.

"Sa Senate version walang ganung probisyon, pero magba-bicam pa 'yan at pwedeng pag-usapan doon na gawin na lang staggered," he said.

Labor Secretary Bienvenido Laguesma earlier said a proposed P100 wage hike for minimum wage earners could lead to wage distortion, putting pressure on business owners to increase wages of middle management.

P100 wage hike could lead to wage distortion: DOLE

The labor chief said over 8 million workers could indirectly benefit from an increase in minimum wage.

"Kung ang sweldo ay maabutan batay sa correction nung distortion ay pwede kayong makipag-usap sa management, dahil yung sweldo ay inabutan na ng mas junior sa akin, mas konti ang responsibilidad," he said.

"Ang chain reaction ng mga karagdagang sweldo, umaabot kahit na hanggang sa managerial level."

He said inflation is an indirect effect of any minimum wage hike, which is managed by an increase in production.