The government will extend loans, instead of subsidies, to help companies in distress to provide 13th month pay for their workers, Malacañang said Tuesday.
Presidential spokesman Harry Roque admitted that the government could not afford to provide subsidy to the companies.
The Department of Labor and Employment earlier proposed the provision of subsidy for the micro and small companies so they can provide their workers with the incentive if the government had extra savings. Under the law, employers are required to pay 13th month pay to their workers on or before December 24.
"Malinaw na po iyan, pinag-aralan – wala pong pagkukunan ng subsidy (It is now clear after a study. There is no funding source for the subsidy)," Roque said during an online Palace press briefing.
"So ang ginawa na lang po natin, dahil mandatory naman po talaga ang pagbayad ng 13th month pay, pauutangin natin iyong kinakailangan mangutang para mabayaran ang 13th month pay. (So what we will do is since the payment of 13th month pay is mandatory, we will extend credit to those in need so they can pay the 13th month pay)," he added.
He said government institutions as well as rural banks have been identified to provide provide loans to the small businesses.
He noted that the Small Business Corporation, an attached agency of the Department of Trade and Industry, has offered to share P10 billion for the financial assistance. At least P6 billion will go to the tourism-related industries while P4 billion will go to the small and medium enterprises, he added.
"So aasistihan po natin ang hindi makabayad dahil talaga namang naghirap tayo dahil sa pandemya. Pauutangin po natin sila nang sa ganoon lahat po tayo ay magkaroon ng merry Christmas (We will assist those who cannot afford the benefit since we all suffered due to the pandemic. We will provide loans so everyone will have a merry Christmas," he said.