P4-B loan for 13th month payouts seen to benefit 80,000 firms

21-Oct-2020 Intellasia | PhilStar | 6:02 AM Print This Post

Up to 80,000 small firms stand to benefit from interest-free loans to be extended by government to ensure cash for 13th month payouts.

Labour Secretary Silvestre Bello III announced early Tuesday P4 billion will be set aside by the trade department for loans to micro, small and medium enterprises to pay their employees the holiday benefit. Trade Secretary Ramon Lopez confirmed this later on the same day.

“This is the funding SBCorp (Small Business Corp.) got from Bayanihan 2 for the MSMEs. So this fund can be tapped. But it is not enough,” Lopez said in a Viber message.

By his estimates, the fund will benefit “anywhere from 40,000 to 80,000″ small companies provided loan amounts will be limited to “P100,000 or P50,000, respectively.” Other details of the programme were not disclosed.

Under Republic Act 11494 or the Bayanihan to Recover As One Act signed last month, SBCorp is granted P10 billion to replenish depleted coffers for its COVID-19 Assistance to Restart Enterprises Programme or CARES.

Of that amount however, Lopez said only P4 billion can be utilised to pay for 13th month benefits since the P6 billion balance will specifically assist tourism-related MSMEs battered by pandemic.

That said, the allocation finally puts to rest the controversy surrounding the 13th month pay of employees prompted by a statement from Bello that it can be deferred by companies suffering cash flow problems from their inability to operate for months.

On Monday, Bello officially took back his earlier statement, and put in writing an order to companies to ensure employees are paid their 13th month pay before December 24. The benefit is equivalent to one month worth of salary for workers employed for 1 year or more.

Initially though, the labour agency mulled extending subsidies instead of loans, until the Employers Confederation of the Philippines, an industry group, told government that loans are sufficient to cover the payouts, also to save government from expenses. Bello has earlier estimated that a subsidy for small firms’ 13th month pay would cost the government from P5 billion to P13.7 billion.

“The subsidy is ideal, but I don’t think the government will do that,” Sergio Ortiz-Luis, the group’s president, said in phone interview.

He also had a higher estimate of between 600,000 to 700,000 small companies that are likely to benefit from the soft loans.

https://www.philstar.com/business/2020/10/20/2050992/p4-b-loan-13th-month-payouts-seen-benefit-80000-firms

 

Category: Philippines

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