DOLE: P4-B loan facility available for MSMEs for 13th month pay

The government on Tuesday said it has allocated funds to lend to micro and small businesses for them to be able to release the 13th month pay to their employees, on top of facilities available from the local rural banks.

In a virtual briefing, Labor Secretary Silvestre Bello III said the Department of Trade and Industry (DTI), through the Small Business Corp. (SB Corp.), has committed to lend P4 billion to micro and small businesses for their 13th month pay.

"They are willing to share about P4 billion of that para sa mga soft loans sa mga micro and small business enterprises para makautang sila without any collateral, so that they can pay the 13th month pay of their employees," he said.

Aside from this, Bello said the Rural Bankers Association of the Philippines has also committed to make available funds to loan out for micro and small businesses for their 13th month pay to employees.

"Mayroong nakahanda ang mga bankers in the Philippines, rural bankers through the country. They are willing to give soft loans to our micro and small enterprises," he added.

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 its part, the Bankers Association of the Philippines (BAP) — the lead organization of universal and commercial banks in the country consisting of 45 members — earlier said it is willing to offer loan facilities for MSMEs for the same purpose. —KG, GMA News