Government has no funds for firms’ 13th month subsidy

Christmas lanterns made of bamboo and plastic are on display at Plaza Quezon in Las Piñas City. With so many days left before Christmas, Filipinos are hoping for better days ahead as the number of Covid-19 cases continues to decline.

THE government lacks funds to grant the proposed cash subsidy to help companies pay the 13th-month pay of their workers, according to the Department of Labor and Employment (DOLE).

Labor Secretary Silvestre H. Bello III issued the statement after Vice President Leonor “Leni” Robredo urged the government at the weekend to give a stimulus package for micro, small and medium enterprises (MSME) so they could afford giving the 13th-month benefits.

As early as last year, Bello said they had requested the Department of Budget and Management (DBM) for a P60-billion budget to give a wage subsidy to firms heavily affected by the business disruptions caused by the Covid-19 pandemic.

“But we were told the government cannot afford the budgetary requirements so we no longer reiterated our proposal for the wage subsidy for employers,” Bello said during a virtual press briefing on Monday.

Instead of the wage subsidy, the government opted to extend “soft loans” to MSMEs to pay the 13th-month pay of their employees through the Small Business Corporation of the Department of Trade and Industry (DTI).

For this year, DTI already announced it will initially allocate P200 million to once again provide a similar zero-interest loan to qualified establishments.

Despite the onset of the pandemic last year, Bello said they did not get any mass reports of companies which failed to pay the 13th-month pay of their workers.

“In fairness to the employers, in 2020, we did not get any complaints of non-payment for the 13th month. If there were, it may only be isolated cases,” Bello said.

Earlier this month, some business leaders said many companies will have a hard time paying the mandated benefit under Presidential Decree 851 due to the prolonged disruptions caused by quarantine restrictions on
their operations.

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