The Department of Labor and Employment (DOLE) said there is a need to carefully study the impact of a bill proposing the grant of 14-month pay to workers.
Labor Secretary Silvestre H. Bello III said in a statement that he is reserving his support for the legislation until a study on its impact is completed.
“We support anything that benefits our workers and their families. However, we must ensure that the proposal will not cause imbalance between the needs of labor and the capability of employers. We must study it very well,” Bello said.
He said the assessment is necessary since the 14th-month pay will cover all companies, including micro, small and medium enterprises (MSMEs).
Last Monday, Senate President Vicente Sotto III filed Senate Bill 10, or “An Act Requiring Employers in the Private Sector to Pay 14th-Month Pay.”
Sotto also told the BusinessMirror that a House counterpart bill mandating the 14th-month benefit is set to be filed by Reps. Precious Hipolito and Kit Belmonte in order to fast-track simultaneous passage of the 14th-month-pay bill in the two chambers.
The Trade Union Congress of the Philippines (TUCP) backed the proposal, saying it will help augment the insufficient income of workers.
Employers warned, however, that requiring the private sector to give workers a 14th-month pay will cause inflation to spike and the Philippines to lose its competitiveness against Southeast Asian peers.
Employers Confederation of the Philippines President Sergio R. Ortiz-Luis Jr. said institutionalizing the grant of 14th-month pay to workers could injure the operations of MSMEs.
MSMEs will apparently be left with two options to shoulder higher labor cost: increase the prices of their products or reduce their work force.