Micro and small businesses could start applying next week for loans to help with their employees’ mandatory 13th month pay, a top official of a state-owned firm said, but only up to 7,000 establishments—just a fraction of nearly a million registered enterprises—could be accommodated.
Bobby Bastillo, Small Business (SB) Corp. vice president for innovations and advocacy, said at a Laging Handa briefing on Thursday that the government financial institution has allotted P500 million for the program, higher than the P200 million fund earlier announced by Trade Secretary Ramon Lopez.
There is, however, a caveat.
Only businesses that have notified the Department of Labor and Employment (Dole) from March 2020 to October 2021 about their flexible working arrangements will be eligible to apply for the loan.
Bastillo said the Dole had listed 11,000 enterprises, but the fund would only be enough for 6,000 to 7,000.
Lending
He said SB Corp. had to rely on the Dole’s list since they have no means to validate each applicant.
He added that only enterprises with 20 or less employees could be accommodated.
Asked why the fund was raised to only P500 million, Bastillo told the Inquirer in a phone message: “The P500 million is what is still available for lending. There are no new funds for the rest of the year or special additional funds from the national [government]. We will be using whatever is still available from our funds for lending.”
Enterprises are required to provide employees their 13th month pay per a presidential decree put in place since 1976. All rank-and-file employees are entitled to this for as long as they have worked at least one month in the calendar year, according to the Dole.
Applications for the loan will be done online. It will run from Nov. 2 until Dec. 7 to allow SB Corp. enough time to process them before the holidays.
Also called a soft loan, this will be payable in 12 months with a grace period of three months. Bastillo said the loan would have zero interest.