sme philippines

7/23/2019 SME Philippines

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SMALL and MEDIUM

ENTERPRISES in thePhilippines

Prepared by: Jo B. BitonioPhilippines


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SMALL and MEDIUMENTERPRISES

in the PhilippinesIn the Philippines, 99.1% of the businesses are small and

medium enterprises (SMEs) and only 0.99% are lareenterprises

!epubli" #"t $o. 901, &he Mana 'arta for Mi"ro, Smalland Medium Enterprises (MSMEs), sined by Presidentloria Ma"apaal #rroyo on * May 00+ denes mi"ro

enterprises as entities -ith total assets of not more thanPhp *,000,000, small enterprises as &he ne- la-, !.#.901 amends the 1/year old !.#. 9 or the Mana'arta for Small Medium Enterprises.


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SMEs are per"eied to hae reater lin2aes tomi"ro/enterprises (ba"2-ard lin2ae) andmedium and lare businesses (for-ard sub/"ontra"tin lin2s).

#mon the rationale for deelopin SMEs in

the Philippines in"ludes the fa"t that they useresour"es more e3"iently than lareenterprises. &he Philippines4 adantaes interms of inestment enironment in"ludeshain an open mar2et e"onomy, reliableinfrastru"ture support, aailable spe"ial

e"onomi" 5ones and stratei" lo"ation,hospitable lifestyle, "ompetitie inestmentin"enties and 6uality human resour"es.


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Philippine SMEs usually 7oin a bierorani5ation, "ooperatie and asso"iation.In the Philippines, SMEs are a"2no-lededto hae the follo-in ma7or roles8o Substantial "ontribution to national e"onomi"

a"tiityo Ma7or sour"e of e"onomi" dynamism, e"onomi"and so"ial fun"tions at all leels of so"iety

o Ma7or sour"e of proision of outsour"inprodu"ts and seri"es

o Ma7or "ontribution to reional, lo"al and"ommunity e"onomi" deelopment.


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Philippines: SMEShare


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SMEs by Sectorata as of 00


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Industry Micro Small Med Lare Total

:holesale ; !etail &rade 9.


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Malaysia

Thailand

Philippines

!orea

"apan #hina

Indonesia

SMEEstabli

shments

9


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Aalue #dded

hae -ell/deeloped manufa"turin"apabilities and are able to reap thebenets of "hanes in

"ommuni"ations, te"hnoloy, and theorani5ation of produ"tion to"ompete internationally -ith su""ess


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#omprehensi$e and

Interated Approach


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&he total assets in"lusie of those arisin fromloans but eC"lusie of the land of -hi"h theparti"ular business entity4s o3"e, plant ande6uipment are situated, must hae aluefallin under the follo-in "ateories8

Mi"ro / less than Php*, 000,001

Small / Php*, 000,001 up to Php1, 000,000

Medium / Php1, 000,001 up to Php100,000,000

Dare #boe Php 100M

#sset Si5e


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Employment Si5e

SMEs may also be dened by thenumber of employees.

Mi"ro / reular employs less than

10 -or2ers Small / 10 99 -or2ers

Medium / 100 199 -or2ers


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#dditional statisti"s on SMEs are asfollo-s8

F 99.% of reistered establishmentsare SME4s

F SMEs enerate 9.9% of 7obs,"ontribute *% of alue -hile theremainin +% are still "ontributedby lare and multinational enterprises

F SMEs a""ount for *% of the totale"onomi" output of the "ountry.


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Reular #ompensation

&he "urrent reional daily minimum -aerates as of Gune 00+, are set forth in thetable belo-.

?or non/ari"ulture8$'! P*


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Plantation Non ( Plantation

$'! *


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3usinesses E4empt /romMinimum -ae La5s

If the "ompany is a seri"e establishment-ith not more than 10 employees

# distressed establishment -ith a de"it of0% or more of "urrent paid/up "apital

# ne- business enterprise outside the$ational 'apital !eion ($'!) or

is in an eCport pro"essin 5one

the "ompany may pay employees belo-minimum -ae rates on "ondition that are6uest is 7led /or e4emption /romcompliance 5ith 5ae orders -ith the$ational :ae and Produ"tiity 'oun"il($:P').


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If the "ompany does not pay minimum-aes

It -ill be sub7e"t under !epubli" #"t $o.+1++ to a ne not less than &-enty/ethousand pesos (P.000) nor more thanHne hundred &housand pesos (P100.000)or imprisonment of not less than t-o years

nor more than four years or both su"h neand imprisonment at the dis"retion of the"ourt. ou may also be ordered to pay anamount e6uialent to double the unpaidbenets o-in to the employees.

Payment of this indemnity may not absoleyou of "riminal liability.


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#omputation o/ -aes

&he salaries and -aes of your employeesdepend on -hether you pay them on amonthly or daily basis.

Monthly(paid employees are those -hom

you pay eery day of the month, in"ludinun-or2ed rest days, spe"ial days andreular holidays.

Daily(paid employees are those -hom youpay for days a"tually -or2ed and onun-or2ed reular holidays.


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Monthly Paid Employees

&he E6uialent Monthly !ate (EM!) ofyour employees is "omputed as follo-s8

&he formula for the EM! of monthly paid

employees is8EM! J (#ppli"able aily !ate C *)B1

&he fa"tor of * days "onsists of8 *0ordinary -or2in days, 1 rest days, 10

reular holidays, and spe"ial days.


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-or8ers Paid by Results

:or2ers -ho are paid by results,in"ludin home -or2ers and those-ho are paid on pie"e-or2, takay,

pakyaw, or task basis, shall receivenot less than the appli"ablestatutory minimum -ae rates

pres"ribed under the !eional :aeHrders for normal -or2in hours or aportion thereof.


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#d7ustments

#d7ustments in the #ppli"able Minimum:ae rate (#M:) is "omputed asfollo-s8

1. #mount of in"rease in #M: K Preious#M: C 100 J % in"rease

. ECistin rateBpie"e C % in"rease JIn"rease in rateBpie"e

*. ECistin rateBpie"e L in"rease inrateBpie"e J #d7usted rateBpie"e.


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!eular holidays in"lude8Date 9oliday

Ganuary 1 $e- ear4s ayMoable ate Maundy &hursday

Moable ate ood ?riday

#pril 9 #ra- n aitinan

May 1 Dabour ay

Gune 1 Independen"e ay

Dast Sunday of #uust $ational =eroes ay

$oember *0 >onifa"io ay

e"ember 'hristmas ay

e"ember *0 !i5al ay

our employees -ho -or2 on a reular holiday (for-or2 -ithin + hours) are entitled to t-i"e (00%)

their basi" -ae


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-or8 Premium Rate%o/ daily rate'

Total Rate

:or2 on rest daysor spe"ial days

1& ;1&

:or2 on rest day-hi"h is also aspe"ial day


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Niht Shi/t di=erential

If the "ompany employs not more than e -or2ers andyou are a retail or a seri"e establishment then there isno need to pay niht shift diOerential.

&here is also no need to pay manaerial employees and

eld personnel the $S. If employees -or2 at nihtbet-een 10800 pm and 800 am the "ompany is re6uiredto pay them $iht Shift iOerential ($S) as follo-s8


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-or8 Rate %o/ hourlyrate'

Pay

$iht shift (10pm to

am) "onsideredreular -or2

/ /

Hrdinary day 10% 110%

!est day, spe"ial dayorreular holiday

10% of rest day,$iht shift "onsideredoertime -or2spe"ial day or holiday!ate

110% of rest day,spe"ialday or holiday rate

$iht shift "onsideredoertime -or2

/ /

Hrdinary day 10% of 1% 110% of 1% of

basi"!ate

!est day, spe"ial dayorreular holiday

10% of rest day,spe"ial day or holiday!ate

110% of rest day,spe"ialday or holiday rate

S i I ti L


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Ser$ice Incenti$e Lea$e%SIL'

If employees hae been -ith the "ompany for at least one year,

-hether seri"e is "ontinuous or bro2en, the "ompany needsto pay them Seri"e In"entie Deae (SID) e6uialent to edays.

&he SID may be used for si"2 and a"ation leae purposes. If theSID is not used up -ithin the year, it may be "ommuted orpaid its money e6uialent at the end of the year. In "omputin

the SID, the basis shall be the salary rate at the date of"ommutation. &he aailability and "ommutation of this benetmay be on a pro rata basis.

&he "ompany need not rant SID if employees are alreadyen7oyin this benet su"h as -hen they are already ien aa"ation leae of at least e days. &he "ompany also neednot a""ord SID to your manaerial employees and eld

personnel. If the "ompany is employin less than tenemployees there is no need to also pay them SID


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Ser$ice #hares

If the "ompany is a seri"e establishmentsu"h as hotels, restaurants and niht "lubs,the "ompany may "hare an additional 10%to your "ustomer4s bill for distribution toemployees.

If the "ompany "olle"ts seri"e "hares,employees are entitled to an e6ual share inthe +% of the total of su"h "hares, eC"eptmanaerial employees. &he "ompany may

retain the remainin 1% to ans-er forlosses and brea2aes and for distribution tomanaerial employees at dis"retion.


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Tips

If the "ompany does not "olle"t seri"e"hares but pra"ti"e the poolin of tipsien oluntarily by "ustomers to

employees the "ompany should ensurethat the pooled tips are monitored,a""ounted and distributed in the samemanner as the seri"e "hares.


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&he basi" salary in"ludes all

remunerations or earnins paid forseri"es rendered. It does not in"ludeallo-an"es and monetary benets -hi"hare not "onsidered part of the reular or

basi" salary su"h as the "ash e6uialent ofunused a"ation and si"2 leae "redits,oertime, premium, niht diOerential andholiday pay and "ost/of/liin allo-an"es.


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Maternity 3ene7ts

&he "ompany must adan"e maternity benets to femaleemployees -hether married or unmarried e6uialent to0 days for normal deliery, abortion or mis"arriae or+ days for "aesarian se"tion deliery. &he rate ise6uialent to 100% of the aerae daily salary "redit.our female employees should be SSS members at thetime of deliery, mis"arriae or abortion and musthae ien the re6uired noti"ation to the SSS throuhthe "ompany and the "ompany must hae paid atleast three months of maternity "ontributions -ithinthe t-ele/month period immediately before the dateof "ontinen"y. Maternity benets li2e other benetsranted by the SSS, are ranted to employees in lieu of

-aes and is not in"luded in "omputin theemployee4s 1*th month pay.


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Ta4 #ompliance

'ompanies must also ensure that youare -ithholdin the proper taCes due onthe "ompensation, benets and other

taCable emoluments paid to allemployees.


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Aital H""upations

Aital H""upations dened as o""upations that employers "onsidered asmost

ital to business su""ess -as also presented by the mentioned surey. It-as

felt that these o""upations may re6uire spe"ial interentions -ith respe"tto

trainin and deelopment of people in or about to enter these o""upations.Surey results listed a total of *1 indiidual o""upation titles per"eied by

employers as ital to business su""ess. In the order of importan"e theyare8

o Manaers, manain proprietors and superisorso Professionals and "leri"al roups

o &e"hni"al and asso"iate professionals

o Seri"e -or2erso Plant, ma"hine operators and assemblers

o &rades and related -or2ers o Sales -or2erso Dabourers and uns2illed -or2ers


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P li i d E l t


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Policies and EmploymentTerms

&hese poli"ies and employment termsand "onditions ho-eer must be"onsistent -ith mandated labourpoli"ies set forth in the Dabour 'ode of

the Philippines. Rnder the Dabour'ode, employees are entitled to"ompensation or -aes, oertime pay,holiday and premium pay, seri"e"hares and tips in seri"e businesses,

SSS, E' and $=I remittan"es, seri"ein"entie leaes and retirement pay.

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