Banks open to offer loans to MSMEs for 13th-month pay

Philippine banks are open to offering borrowing programs to local businesses for them to be able to release the mandated 13th-month pay to employees, the Bankers Association of the Philippines (BAP) said.

According to BAP managing director Benjamin Castillo, the BAP is willing to work hand in hand with micro, small, and medium enterprises (MSMEs) to roll out the necessary facilities, as it has been continuously doing.

"With an appropriate plan ng ating mga negosyante, ng ating mga MSMEs, eh makikinig naman po at magiging glexible ang mga bangko," he said in a report on GMA's "24 Oras Weekend."

Established in 1949, the BAP is the lead organization of universal and commercial banks in the Philippines, consisting of 45 members: 21 local banks and 24 foreign bank branches.

Just last week, the Department of Labor and Employment (DOLE) declared that employers cannot defer or be exempted from giving the 13th-month pay benefit of their employees.

Under Presidential Decree 851, employers are mandated to pay all their employees a 13th month pay not later than December 24 of every year.

The Employers Confederation of the Philippines (ECOP) has maintained, however, that micro firms cannot afford the 13-month pay given the difficulties of business amid the COVID-19 pandemic.

"'Yung mga micro, 'di kaya talaga eh. Maraming mawawalan ng trabaho kapag piniga natin nang piniga 'yung mga micro na 'yan at hindi natin tinulungan," said ECOP chairman Sergio Ortiz-Luis Jr.

Micro enterprises are defined as those with total assets worth less than P50,000; cottage enterprises with assets worth P50,001 to P500,000; small with P500,001 to P5 million; and medium from over P5 million to P20 million.

For his part, Labor Secretary Silvestre Bello III said the government is open to subsidizing the 13th-month pay for employees of "distressed" employers, albeit only for those considered micro and small enterprises. — Jon Viktor D. Cabuenas/BM, GMA News