No Subsidy To Employers Who Can’t Give 13th Month Pay, Loans Are Offered Instead

No Subsidy To Employers Who Can’t Give 13th Month Pay, Loans Are Offered Instead

Malacañang announced earlier on Tuesday that they will not provide subsidy to companies who are struggling to pay the 13th-month benefit of its employees. They will instead lend funds to these companies through the government’s programs for SMEs. 

In a virtual briefing, Presidential Spokesperson Harry Roque  said:

Malinaw na po yang pinag-aralan: wala pong pagkukunan ng subsidy.So ang ginawa na lang po natin, dahil mandatory naman po talaga ang pagbayad ng 13th month pay, pauutangin natin yung kinakailangang mangutang para mabayaran ang 13th month pay.

[Translation: This has been studied clearly: there are no funding sources for the subsidy. What we did instead is lent employers money in order to give out the 13th-month pay since it’s mandatory.]

There are various programs for businesses that will provide loans to provide assistance to struggling companies during this pandemic. The government identified rural banks and the Small Business Corporation (SBC), which respectively have been allotted ₱10 billion, ₱6 billion of which is for tourism businesses and the remaining ₱4 billion for micro, small and medium enterprises (MSMEs).

It can be recalled that Labor Secretary Silvestre Bello III advised MSMEs to resort to soft loans to cover the mandatory benefit, as it cannot be deferred nor cancelled. Should the government subsidize employers, it might need up to ₱13.7 billion funds with millions of workers affected by the pandemic, according to the Labor Secretary. 


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