P4 billion in loans earmarked for MSME 13th month pay – DOLE

Labor Secretary Silvestre Bello III said around P4 billion will be set aside for the loan program for micro, small, and medium enterprises (MSMEs), to fund the 13th month pay of their employees.

Bello said the amount will be tapped from the P10 billion allocated in the Bayanihan to Recover as One Act (Bayanihan 2), which is lodged under Small Business Corporation (SB Corporation), an attached firm of the Department of Trade and Industry.

“I thanked [Trade] Secretary Mon Lopez…because they have an attached agency, Small Business Corporation, which I think has P10 billion.… He is setting aside P4 billion of that for the loan facility,” Bello told reporters in a mix of English and Filipino on Wednesday, October 21.

Aside from SB Corporation, Bello also said rural banks expressed interest in giving out loans to MSMEs who need help in paying out the annual incentive.

“[H]anda ang mga rural bank sa buong bansa na magbigay o mag-extend ng soft loans sa mga micro, small, and medium enterprises na hindi makabayad ng 13th month pay,” said Bello.

(All rural banks in the entire country are ready to extend soft loans to MSMEs which will not be able to give 13th month pay.)

Rural Bankers Association of the Philippines president Lisa Timbol, who joined the briefing virtually, said they have already sent the draft of the program’s implementing rules and regulations to the Department of Labor and Employment (DOLE).

“What we really need is a public and private partnership, and collaboration [that] is the key to bounce back the economy,” said Timbol.

On October 18, the Bankers Association of the Philippines also said banks are ready to offer loans to MSMEs.

Bello previously floated the idea of allowing distressed MSMEs to defer paying 13th month pay. The labor chief eventually decided to take the route of ironing out loan facilities for small businesses. (READ: DOLE says all employers must pay 13th month pay despite pandemic)

The Bayanihan 2 law, signed in September, has some P140 billion in appropriations for pandemic efforts. Of the amount, only some P4.4 billion has been released as of Tuesday, October 20. DOLE is requesting the release of around P8 billion for its emergency employment program. – Rappler.com

Benidict Prodon is a Rappler intern. He studies international relations at the Lyceum of the Philippines.