Rural banks to offer soft loans to distressed businesses for 13th month pay

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Metro Manila (CNN Philippines, October 21) — Labor Secretary Silvestre Bello III said on Wednesday that rural banks will offer soft loans to distressed micro and small enterprises to cover for their employees’ 13th month pay.

Rural banks have actually been assisting different government agencies, especially in the agriculture sector, according Elizabeth Carlos-Timbol, president of Rural Bankers Association of the Philippines (RBAP).

“With this program with DOLE (Department of Labor and Employment), together with DTI (Department of Trade and Industry), we can focus on the micro, and small business enterprises," said Carlos-Timbol. "We can be a conduit to lend out to these sectors with the suggestions and approval of DOLE.”

Bello earlier said that giving a subsidy to businesses to pay for the mandatory 13th month pay benefit has yet to be approved by President Rodrigo Duterte and the Department of Finance.

During a virtual press briefing on Wednesday, the labor chief pointed out that Finance Secretary Carlos Dominguez is not against the proposal, but was asking Bello to look for funding for the program.

“Hindi pa ako nag gi-give up diyan (I haven’t given up yet)," Bello said. "I will fight for it. It's for the workers, the hardest-hit workers in our society today.”

Around ₱5 billion to ₱13.7 billion is needed to subsidize the 13th month pay of 1.5 million to 5.1 million workers.

The DTI will also share ₱4 billion from its attached agency, Small Business Corp., to lend to businesses. This is part of the ₱10 billion funding of the agency.

The loan from the DTI does not require any collateral, Bello added. However, he did not specify the guidelines of the program.

RELATED: DOLE tells small firms to resort to loans for 13th month pay of workers