Requiring 14th month pay not a good idea, business group says

The proposal requiring private sector employers to give their rank-and-file employees 14th month pay may hurt small companies, according to the Philippine Chamber of Commerce and Industry (PCCI).

Under the Senate Bill 2 filed by Senate President Vicente Sotto III last year, rank-and-file employees regardless of their employment status, designation, and irrespective of the method by which their wages are paid provided that they have worked at least one month during the calendar year are entitled to 14th month pay.

The bill has been pending in the Senate labor committee since July 2016, but hopes on its passage emerged after the proposed measure's author took the helm of the Senate in May.

For the PCCI, however, requiring the private sector to give 14th month pay to their employees is not a good idea, according to a report by GMA News' Maki Pulido on "24 Oras."

Large companies even give up to a 15th month pay, but they are only a fraction of the country's employers as 99.7 percent of businesses are micro, small, and medium enterprises (MSMEs).

"Tataas ang overhead nila kasi siyempre they start with two or three instead of hiring more they'll limit the number," Bing Sibal-Limjoco, president of PCCI, said.

Likewise, laundry business owner Shieryl Salinas, said she might be compelled to reduced her staff if the meausre eventually passes into law.

"'Yung rental pa lang 'di ko na kailangan i-elaborate how expensive it is... hindi naman kami makataas ng rate kasi parang kabute nagsusulputan ang competitors," Salinas said.

While the additional bonues was a big help, thee Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said that employees should not be so excited.

"Huwag muna masyadong umasa dito sa balitang ito," Alan Tanjusay, ALU-TUCP, spokesperson said.

Malacañang on Thursday underscored the need to study the bill seeking to mandate employers to give their rank-and-file employees 14th month pay. —Ted Cordero/JST, GMA News