AFTER the Department of Labor and Employment (Dole) backtracked on its statement that distressed companies can defer the 13th month pay, business chambers in Cebu are urging for the labor department’s proposal for subsidy and credit facility for micro, small and medium businesses (MSMEs).

Labor Secretary Silvestre Bello III on Oct. 15, 2020, said they are preparing a proposal to either provide subsidy or direct banks to open a credit facility for MSMEs, to be submitted to the Department of Finance.

Cebu Chamber of Commerce and Industry president Felix Taguiam said this would benefit employers since most of the businesses had been helpful to their employees during the lockdown months by giving advances and incentives due to them.

Mandaue Chamber of Commerce and Industry president Steven Yu said Dole’s proposal is a welcome development for businesses struggling not only with operating costs but also in keeping their employees afloat.

Rey Calooy, president of Filipino-Cebuano Business Club, pushed for the subsidy from the government.

Calooy told SunStar Cebu: “That’s our stand. We need to subsidize distressed MSMEs because we cannot defer the law and tradition of 13th month pay.”

Presidential Decree 851 issued in December 1976 requires all employers to provide a 13th month pay equivalent to 1/12th of an employee’s basic salary in a year.

Bello said all employers must pay their employees before Dec. 24, 2020, after he took back his suggestion of deferment. (JOB)