Palace eyes 13th month pay subsidy for MSMEs

MANILA, Philippines — Malacañang will ask economic managers whether the government has funds to subsidize the 13th month pay of workers of micro, small and medium enterprises (MSMEs) facing financial problems because of the pandemic.

“We have to determine that. We want to do it, and the President during the last Cabinet meeting wanted to know when workers will get their 13th month pay. But because of the condition of the economy, we understand that there are small and micro enterprises that are facing difficulties because of the long lockdown,” presidential spokesman Harry Roque told radio station dzBB on Saturday when asked whether the government has money to shoulder the workers’ bonus.

“I have to check first. I cannot commit until I talk to to the DBM (Department of Budget and Management) and the Department of Finance,” Roque said.

Under Presidential Decree No. 851, private sector employers are required to pay their rank-and-file employees a 13th month pay not later than Dec. 24 every year.

Earlier this month, Labor Secretary Silvestre Bello III said the law’s implementing rules and regulations exempt distressed businesses from giving the 13th month pay.

The deferment of 13th month pay, Bello said, cannot be done legally “unless it is a private transaction or agreement between the employer and employee.”

The Employers Confederation of the Philippines has estimated that about two million workers would be affected if the bonus is delayed.

Last week, Bello said he would propose the giving of subsidies to pandemic-hit businesses so they can provide the 13th month pay of their workers.

If the government does not have funds for the subsidies, state-run financial institutions may provide loans to affected workers, the labor chief said.