Mandatory 14th month pay pushed

CEBU, Philippines - Cebu City south district Rep. Rodrigo Abellanosa has filed a bill in Congress that would make a 14th month pay for employees mandatory.

At present, Presidential Decree 851 mandates only for a 13th month pay, which is equivalent to one month worth of salary, usually given during Christmas.

If Abellanosa’s proposal, House Bill 6239, will be enacted into law, all employers in both the public and private sectors will be required to pay their employees, regardless of the nature of their employment, an additional month’s worth of salary every year.

Abellanosa is also proposing that the 14th month pay and the 13th month pay and other benefits, shall be excluded from the computation of gross income.

“This bill also recognizes that motivation is a key factor in promoting productivity in our workforce. Rewards are proven to be useful drivers of motivation and such additional structures incentive may be expected to translate to effective personnel and efficient operations,” Abellanosa said.

Cebu’s business sector, however, believes a productivity-based incentive program would be better than a mandatory 14th month pay.

Philip Tan, past president of the Mandaue Chamber of Commerce and Industry (MCCI), said, “Giving incentive to workers across the board, even to those who are not performing well, no longer works in today’s environment. Productivity-based incentive should be pushed.”

Tan, the current representative to the Central Visayas Regional Tripartite Wages and Productivity Board-7, said Abellanosa’s proposal will make the Philippines less competitive and pull up the already high cost of doing business.

Cebu Chamber of Commerce and Industry (CCCI) President Ma. Teresa Chan agrees.

“We are no longer competitive. We don’t even want an increase in minimum wage, how much more additional mandatory benefits?” she said.

She said that while the business sector is not totally against giving a 14th month pay, making the same mandatory is not feasible, especially for companies that don’t have a good revenue standing.

Alan Joseph, Cebu Business Club (CBC) President echoed the sentiments.

“I personally don’t like mandatory provisions like this bill. I prefer productivity based bonuses. The Philippines still is uncompetitive when it comes to attracting investments and this will make our investment potential worse,” he said.

Abellanosa remains optimistic.

“Expected na man na nato nga duna g’yuy opposition, apan sa ngadto-ngadto makasabot ra sila nga dalaygon ang pagpasar niini nga legislative measure,” he said. –/JMO (FREEMAN)