- 99.1% of businesses in the Philippines are small and medium enterprises (SMEs) which are defined as having less than 100 million PHP in total assets. SMEs employ 69.1% of the workforce and contribute 32% to the national economy. - SMEs play a major role in the Philippine economy through job creation, provision of outsourcing services, and contribution to local economic development. They are an important part of the industrial sectors such as wholesale/retail, manufacturing, and hotels/restaurants. - Laws such as the Magna Carta for Micro, Small and Medium Enterprises protect SMEs and set compensation standards including minimum wages, overtime pay, night shift differentials

1. SMALL and MEDIUM ENTERPRISES in the Philippines Prepared by: Jo B. Bitonio Philippines

5. Philippines: SME Share

7. Industry Micro Small Med Large Total Wholesale & Retail Trade 95.7 4.2 0.199 0.1 99.9 Manufacturing 88.2 9.9 0.8 1.1 98.9 Hotels & Restaurants 92.0 7.7 0.2 0.1 99.9 Community, Social, & Personal Service Activities 94.3 5.5 0.4 0.1 99.9 Real Estate, Renting & Business Activities 88.4 10.0 0.7 0.9 99.1 Health & Social Work 94.7 4.6 0.4 0.4 99.6 Financial Intermediation 76.6 22.7 0.3 0.4 99.6 Transport, Storage and Communications 75.2 22.4 1.3 1.1 98.9 Education 52.8 41.7 3.1 2.4 97.6 Agriculture, Hunting and Forestry 47.0 45.9 3.2 3.9 96.1 Construction 55.6 36.4 3.9 4.1 95.9 Electricity, Gas and Water 39.6 43.5 8.9 7.9 92.1 Fishery 45.2 49.8 2.6 2.4 97.6 Mining and Quarrying 60.4 32.0 4.0 3.7 96.3

8. Comparative SME Data in Selected Asian Economies (values in %) www.dti.gov.ph/filedirectory/SMEagenda.ppt. Malaysia Thailand Philippines Korea Japan China Indonesia SME Establishments 94.4 98.0 99.6 99.0 99.0 99.7 99.99 Employment 40.4 55.8 69.1 69.0 88.0 74.0 99.04 Value-Added 26.0 n.a 32.0 46.0 56.0 74.0 99.04

10. Comprehensive and Integrated Approach

16. Regular Compensation SUMMARY OF CURRENT REGIONAL DAILY MINIMUM WAGE RATES Non-Agriculture, Agriculture As of October 2008 Plantation Non - Plantation NCR 345 345 Region I 226.00 - 242.00 226.00 - 242.00 CAR 220.00 195.00 Region III 236.00 - 272.00 216.00 - 256.00 Region IV-A 216.00 - 295.00 196.00 - 275.00 Region IV-B 198.00 - 207.00 178.00 - 187.00

25. Regular holidays include: Your employees who work on a regular holiday (for work within 8 hours) are entitled to twice (200%) their basic wage Date Holiday January 1 New Year’s Day Movable Date Maundy Thursday Movable Date Good Friday April 9 Araw ng Kagitingan May 1 Labour Day June 12 Independence Day Last Sunday of August National Heroes Day November 30 Bonifacio Day December 25 Christmas Day December 30 Rizal Day

27. The current premium pay rates are as follows Work Premium Rate (of daily rate) Total Rate Work on rest days or special days 30% 130% Work on rest day which is also a special day 50% 130% Work on regular holiday which also a rest day 30% of 200%

30. Work Rate (of hourly rate) Pay Night shift (10pm to 6 am) considered regular work - - Ordinary day 10% 110% Rest day, special day or regular holiday 10% of rest day, Night shift considered overtime work special day or holiday Rate 110% of rest day, special day or holiday rate Night shift considered overtime work - - Ordinary day 10% of 125% 110% of 125% of basic Rate Rest day, special day or regular holiday 10% of rest day, special day or holiday Rate 110% of rest day, special day or holiday rate