TO COMPLY WITH 13TH MONTH PAY: DTI asked to facilitate more loans to distressed MSMEs

Senator Joel Villanueva has called on the Department of Trade and Industry to expedite the processing of loans that its attached agency, Small Business Corporation (SBC), is extending to help micro, small and medium enterprises (MSME) not only to help them rebuild their business, but also to ensure that they have enough available cash to pay for the salaries and benefits of their employees, including the 13th month pay.

“Sa ilalim ng Bayanihan 2 law, naglaan po tayo ng P10 bilyon na dagdag kapital para sa SBC upang mapalawak pa ang pagpapautang nito sa mga MSMEs na lubhang naapektuhan ng pandemya. Isa pong mahalagang probisyon sa pagpapautang ay ang commitment ng kumpanya na panatilihin ang employment ng kanilang mga manggagawa,” explained Villanueva, chair of the Senate labor committee.

“Access po sa kapital ang napakahalaga sa mga MSMEs para maka-survive sa epekto ng pandemya dahil limitado pa rin ang operasyon ng karamihan ng mga negosyo,” Villanueva added.

Villanueva pointed out the importance of MSMEs in jumpstarting the economy as 99 percent of registered businesses are under the category, hiring about 5.7 million workers, according to trade department data.

He described the predicament of some establishments who sounded the alarm on their prospective inability to pay the mandated 13th month pay as being caught between “a rock and a hard place.”

“Those who are managing to keep their businesses afloat are really in a bind. Their limited operations are just enough to cover their day-to-day costs, but not sufficient to fulfill their obligations such as the mandatory 13th month pay,” the lawmaker conceded. “That is why lenders such as the SBC should make themselves more accessible to our entrepreneurs and provide a lifeline for them so they could not only rebuild but also have enough cash to fulfill their obligations to their workers.”

He also acknowledged the fact that some businesses already advanced their 13th month payout in April and May, at the height of the enhanced community quarantine enforced in Luzon which ground business activity to a halt

MSMEs bore the brunt of the lockdown with thousands of establishments opting to close, triggering a spike in the unemployment statistics. As of July 2020, unemployment rate eased to 10 percent or about 4.6 million workers, better that the April 2020 figure of 17.7 percent unemployment (7.3 million workers).

Villanueva said he looked forward to the discussions and the recommendations of the National Tripartite Industry Peace Council, which he earlier sought to be convened to tackle issues hounding the sector including the 13th month pay. He expressed the willingness of the Senate labor committee to hear any proposed legislation or congressional assistance that the council would need.

The tripartite council, which is composed of the labor department, and groups representing labor and employers, are expected to convene on Tuesday to discuss the issue.