Why Some Entrepreneurs Are Scared to Raise Their Own Salary

For many Filipino entrepreneurs, the hardest part of running a business isn’t landing customers or managing inventory—it’s deciding how much to pay themselves. A 2024 survey found that 61% of women cite finances as the top obstacle to starting a business, and 52% of women in the Philippines specifically point to lack of confidence. These numbers hint at a deeper hesitation that persists long after the business is up and running: the fear of taking a salary. With micro, small, and medium enterprises making up 99.6% of all registered businesses and employing over 65% of the national workforce, the question of owner compensation affects millions of Filipino families—yet it’s rarely discussed openly.

Why Entrepreneurs Hesitate to Pay Themselves

The fear of taking a salary doesn’t come from a single source. It’s shaped by three overlapping pressures that many small business owners face daily.

How Rising Costs Squeeze Owner Compensation

The financial pressure on MSMEs is not abstract. The Metro Manila wage board approved a ₱50 daily wage increase in 2025, bringing the minimum daily rate to ₱695. For a small food business with a crew of 10, that’s roughly ₱15,000–₱25,000 more each month—with no accompanying relief. Joey Concepcion of the Private Sector Advisory Council noted that not all businesses can afford such increases, especially medium-sized entrepreneurs, and suggested that wage growth should be staggered over time to avoid closures.

At the same time, Republic Acts 9994 and 10754 mandate a 20% discount and 12% VAT exemption for senior citizens and persons with disabilities on essential goods and services. The Department of Trade and Industry currently allows discounted promo items to be exempt from additional discounts, giving MSMEs some breathing room. But the Romualdez bill would remove that cushion, requiring businesses to apply the full discount on top of promo pricing as long as the final price doesn’t fall below production cost. Many small restaurants and retailers already absorb these costs without any reimbursement from the government.

The Psychological Toll: Why Owners Stay Silent

Beyond the numbers, there’s a cultural layer. The Avon report found that 33% of women globally cite lack of confidence as a barrier to entrepreneurship, and in the Philippines that figure jumps to 52%. This confidence gap doesn’t disappear once the business is running. Many owners feel that taking money out of the business is a sign of weakness—or that they should reinvest every peso until the business is “stable.” One businessman quoted in the Simpol article admitted he’s barely turning a profit but hesitates to speak up because “there’s a fear that admitting difficulty might scare away customers or damage the brand.”

This silence is dangerous. When founders refuse to pay themselves, they risk burnout, personal debt, and eventually, closure. The very resilience celebrated in Filipino culture—”kaya natin ‘to”—can become a trap. As the article puts it, “If this pattern continues without reform, relief, or representation, we won’t just lose profits. We’ll lose the soul of our neighborhoods.”

What Entrepreneurs Can Do About It

There is no single formula for setting your own salary, but the research points to several practical steps grounded in the business realities of Philippine MSMEs.

• 1
  Separate Personal and Business Finances

  Open a dedicated business bank account and a personal account. Treat your salary as a fixed expense—not something you take only when there’s extra. This gives you a clearer picture of your true operating costs.

• 2
  Set a Realistic Salary Based on Cash Flow

  Review your net profit after accounting for mandatory costs—wage hikes, discounts, rent, utilities, raw materials. If you can’t pay yourself a full market rate, start with a smaller amount and increase it quarterly. The Avon data shows that 79% of women believe inadequate financial resources is a setback; a structured draw helps you avoid that trap.

• 3
  Advocate for Policy Change

  David Sison, President of Resto.PH, calls for proper dialogue: “Before adding new mandates, let’s first fix the abuse of fake PWD IDs. That alone drains the system.” Join industry groups, speak to local government, and push for partial reimbursement or tax relief for mandatory discounts. As the Simpol article argues, “If MSMEs are expected to uphold public good, then public policy should also uphold MSMEs.”

• 4
  Review Your Pricing and Cost Structure

  Conduct a breakeven analysis that includes your own salary. If your margins are too thin, consider adjusting prices, cutting non-essential expenses, or renegotiating supplier terms. The recent wage hike of ₱50 and the potential Romualdez bill make this review urgent.

Frequently Asked Questions

Moving Forward: What to Watch For

The decisions you make about your salary today are shaped by forces beyond your control—wage mandates, discount policies, and the broader economy. But you can take action now. Review your financials, separate your accounts, and set a draw that reflects your contribution. Stay informed about the Romualdez bill and join industry dialogues to push for relief. The most dangerous move is to keep silent and hope things improve on their own.

If this was useful, you might also want to read how high rent is hurting Philippine businesses.

Sources

Expensive fees threaten the Filipino economy — A look at how various cost burdens pile up on small businesses.

Philippine business troubles scare away foreign money — Explores the broader investment climate affecting MSMEs.

Living MSMEs: Romualdez Bill and the Silent Struggle of Small Businesses. Simpol.ph, 2024.

PSAC assesses impact of P100 wage hike on struggling entrepreneurs. BusinessMirror, February 2024.

Avon Global Progress for Women Report, 2024. (No direct URL available; data cited from source summary.)