13TH MONTH PAY FUNDING SET
Small-scale business owners can now borrow from the COVID-19 Assistance to Restart Enterprises (CARES) fund for the 13th month pay of their employees, Trade Secretary Ramon Lopez said.
This is after Labor Secretary Silvestre Bello III bared that the Department of Trade and Industry (DTI) committed some PHP4 billion that can be tapped by micro and small enterprises (MSEs) as loan to pay for their workers’ 13th month benefit.
Lopez said the PHP4 billion will come from the CARES program funded by Bayanihan 2 Act.
Under the Bayanihan 2, the government earmarked PHP10 billion to DTI’s financing arm, Small Business (SB) Corp., to fund its loan program for micro, small, and medium enterprises (MSMEs).
Of the total fund, PHP6 billion was allotted for MSMEs in the tourism sector.
“(It will be the) same procedure as other MSMEs borrowing for working capital and operations,” the DTI chief said.
Under the CARES program, existing MSMEs with at least one year of operation can avail themselves of the zero-interest loan.
SB Corp. only collects service fee of 4 percent for loans payable within a year, 6 percent for two-year loan, and 7.5 percent for three-year loan.
With the Bayanihan 2, CARES program offers loans from PHP10,000 to PHP200,000 depending on the asset size of the enterprises.
Those with a minimum asset size of PHP50,000 to PHP1 million can apply for loan.
The Department of Labor and Employment (DOLE) last week ruled out the deferment and exemption of employers to give 13th month pay to their workers.
Presidential Decree 851 mandated all employers to give 13th month pay on or before Dec. 24.
Bello earlier said the government would need up to PHP13.7 billion to subsidize the 13th month pay of employees working in distressed businesses due to the coronavirus pandemic.
Lopez also said the government is still studying how to provide assistance to MSEs to pay their workers’ 13th month pay, whether through loans or subsidy.