13th month pay loan facility for micro firms' workers pushed

A labor-employer-government meeting agreed in principle to ask government to extend a loan facility to micro enterprises to pay for the mandatory 13th month pay of their employees which is estimated between P500 million to P1 billion.

Employers Confederation of the Philippines (ECOP) President Sergio Ortiz-Luis Jr. said after their tripartite meeting with labor groups that Trade and Industry Secretary Ramon M. Lopez and Department of Labor and Employment Secretary Silvestre Bello III all agreed that government extend a loan facility for the 13th month pay of micro enterprises workers. Some politicians are calling for the creation of the fund through the SB Corp., the micro financing arm of the government.


Ortiz-Luis said that a loan facility of between P500 million to P1 billion would be sufficient enough to ensure that employees of micro enterprises get their Christmas bonus.

According to the ECOP chief, Lopez was amenable to look for funds to lend out to micro enterprises. Ortiz-Luis earlier estimated there are 2 million employees from micro enterprises who might not be able to get their Christmas bonus.  

But Ortiz-Luis said this is not the proposed fund is not dole out but a loan to micro enterprises that they would pay interest over time.

In a separate interview, Lopez said “any form of support t help micro and small enterprises and their workers,” which could be either loan or subsidy, but clarified that there is no need to defer the giving out of the mandatory 13th month pay.

There were also different opinions as to giving exemption to companies that cannot afford to pay the Christmas bonus. He said DOLE is expected to issue a clarification on the Christmas bonus.

But ECOP discounted this already stressing that even if government will exempt companies from the mandatory 13th month pay, it would still be difficult for companies to get the exemption because they cannot qualify the requirements.

To be exempted, he said, some of the requirements include the submission of financial statement in the past three years and loses, which companies cannot comply as they were not able to operate for the most part of 2020.

The employers group also stressed the government cannot force companies to pay for the 13th month pay if they are already bankrupt.

“Under the law, there are penalties and interest slapped on companies that failed to pay the 13th month pay but if companies are really bankrupt and have closed their operations what can you do. It is not a criminal offense,” he said.

ECOP has recalled that during the time of then President Corazon Aquino when the economy was down, the government ordered to amend the 13th month pay making it applicable only to rank and file employees, instead of everybody in the company.

Also, the DOLE under then Secretary now Secretary Franklin Drilon issued an order providing exemptions and deferment of the Christmas bonus to qualified firm applicants.