Medium-sized firms must pay 13th month – Bello

MEDIUM business enterprises (MBEs) must pay their workers the 13th month salary because they are not considered as distressed establishments, according to Labor Secretary Silvestre Bello 3rd.

In a virtual briefing on Friday, Bello said MBEs are better off than micro and small business enterprises (MSBEs) and can afford to pay the mandatory salary.

MBEs “have a capitalization of about P100 million,” he said.

Some medium-sized firms were hoping to be classified as a distressed company to qualify them for government assistance.

Bello said the department was considering either a cash aid or loan to help MSBEs that are in the red.

“We will request banking institutions,

particularly government banks like Land Bank of the Philippines and Development Bank of the Philippines, to come up with a loan facility for our micro and small business enterprises so they can pay the 13th month pay,” Bello said.

By the Department of Labor and Employment’s (DoLE) count, there are 1.3 million workers in need of assistance to tide them over the coronavirus crisis. The Philippine Statistics Authority’s (PSA) figure is much bigger — 5 million. Bello said if the DoLE figure would be followed, P1 billion is needed to pay the workers, and P13.7 billion if it is based on PSA’s count.

“We recommended to the Office of the President and Budget Secretary Carlos Dominguez 3rd to discuss what will be the basis [of computation] and come up with a consensus. But what is important is they will agree to subsidy,” he said.

Bello said he would be signing an advisory instructing employers to pay the 13th month pay on or before December 24.

“That’s the most important point, no exemption,” he said, adding that he will submit the proposal to the Inter-Agency Task Force for the Management of Emerging Diseases.

Bello said an application for subsidy would be thoroughly assessed to determine if the applicant is really in distress.

“Micro and small business enterprises must show proof that they are really losing money,” he said.