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13th-month pay loan facility up

Labor Secretary Silvestre Bello III said the loans would allow companies fulfill their obligations to their employees

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Malacañang on Thursday reminded employers that they cannot defer the release of the 13th-month pay of workers despite business disruptions caused by the pandemic.

Presidential spokesperson Secretary Harry Roque pointed out in televised briefing that the grant of such benefits for private-sector employees is mandated by the law.

“This issue (deferment of 13th-month pay) was also an issue last year. The answer is no, because it is mandated by the law,” he said.

The Palace official, however, assured cash-deficient companies that the government has launched a borrowing program to help them provide the 13th-month salaries of their workers this year.

Small Business Corporation, the financing arm of the Department of Trade and Industry, is set to provide loans for micro, small and medium enterprises needing additional funding.

“We acknowledge that several small and medium-scale industries are having a hard time because of lockdowns, so the government will provide assistance for them,” Roque said.

In a separate media conference, Labor Secretary Silvestre Bello III noted that loans for businesses would aid them in fulfilling their obligations to their employees by the end of the year.

Bello added that he has been discussing the matter with the Employers Confederation of the Philippines and Trade Secretary Ramon Lopez.

“I can feel the agony of the employers,” he said. “They are really struggling.”

Last week, Presidential Adviser for Entrepreneurship Joey Concepcion urged the government to further ease restrictions on businesses to enable them to recover losses incurred during lockdowns and to provide salaries and 13th-month pay for their workers.

Under Presidential Decree 851, owners of companies are mandated to provide their workers’ 13th-month pay on or before 24 December. The pay is equivalent to one-twelfth of a worker’s basic annual salary.

It is prescribed by Philippine labor laws as a mandatory benefit and is different from the “Christmas bonus” that some companies provide their employees.

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