Philippines employers not allowed to defer 13th month pay

All employers in the Philippines are required to give employees their 13th month pay on or before December 25 even if they are financially distressed, said Labor Secretary Silvestre Bello III.

Bello previously suggested allowing companies who are severely impacted by the COVID-19 pandemic to defer the 13th month payment.

But labour groups were up in arms over his recommendations, which he has now retracted.

“We will not postpone or defer, and we will not give any exemption to the payment of 13th month pay,” Bello announced in a televised government briefing on October 15.

“It cannot be deferred. The provision of Presidential Decree No. 851 is very specific, that employers should pay their employees their 13th month pay on or before December 24,” he added.

“I was misunderstood when I mentioned especially in the implementing rules and regulations, there is a provision which says that companies in distress are exempted from paying 13th month pay,” he added.

To help struggling companies, Bello suggested that distressed employers be subsidized.

“We know there are employers who want to give but there are those who really can’t. These are the MSMEs that we will help if the secretary of finance will approve the request to subsidize the MSMEs, or if we can’t [subsidize them], we give them loan facility in all banks,” he said.

“Having said that, we requested [Finance] Secretary [Carlos] Dominguez if they may give subsidy to employers that are categorized as micro and small business enterprises. They can be given subsidy or given an opportunity to make loans with our banks,” Bello said.