Employers group asks for govt aid to MSMEs for 13th month pay release

The Employers Confederation of the Philippines (ECOP) is awaiting feedback on its proposal to provide distressed firms a subsidy or loan to help them release the mandatory 13th month pay of their workers on time.

ECOP president Sergio R. Ortiz-Luis, Jr. said the group made the proposal during a recent National Tripartite Industrial Peace Council Meeting with Labor Secretary Silvestre Bello III and Trade Secretary Ramon Lopez.

Through Labor Advisory No. 28 series of 2020, the Department of Labor and Employment (DOLE) requires employers to release the 13th month pay of their employees on or before December 24, 2020,

The advisory, signed and issued by Bello on October 16, emphasizes that “no request or application for exemption from payment of 13th month pay, or for deferment of the payment thereof shall be accepted and allowed.”

Entitled to the payment are rank-and-file employees in the private sector, regardless of position, designation, employment, status, and method by which the wages are paid, who have worked for the company for at least one month during the calendar year.

The amount of 13th month pay shall be not less than one-twelfth of the basic total salary earned by an employee within a calendar year, and should be paid on or before December 24, 2020.

Employers are also required to make a report of their compliance with the law to the nearest DOLE Regional Office not later than January 15, 2021.

“We are now awaiting feedback from the two Secretaries on the response of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF),” Ortiz-Luis, Jr. said of ECOP’s proposal.

He said a loan facility of between P500 million and P1 billion would be sufficient. He estimated that about 2 million employees might not be able to get their 13th month due to lack of funds.

Bello said giving subsidy to businesses to enable them to pay the mandatory 13th month benefit has yet to be approved by the President and the Department of Finance.

As this developed, Bello in a virtual interview on October 21 said banks are willing to provide loans to distressed MSMEs to help them provide their workers’ 13th month pay as long as the government could extend the banking sector a guarantee.

He also mentioned that Lopez is looking to set aside P4 billion from the Small Business Corporation’s P10-billion amelioration program as soft loans to MSMEs.

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