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ECoP says mandatory 14th month pay to hurt micro businesses

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THE HEAD of the Employers Confederation of the Philippines (ECoP) said the proposed mandatory 14th month pay for workers will affect micro enterprises, but exempting them would be unfair to other businesses.

“The problem is, ang tatamaan ‘yung mga (those who) can’t afford it. Alam mo naman ‘yung mga micro natin have been surviving, maraming nagbubukas, maraming nagsasara. Every year ganun ang storya nila (those that will take the hit are those who can’t afford it. You know how our micro [businesses] have been surviving, many open, many close. Every year, that is their story),” ECoP President Sergio R. Ortis-Luis, Jr. told BusinessWorld in phone call on Thursday when sought for comment.

ACT-CIS Party List Representative Eric G. Yap filed House Bill 6198 on Wednesday, which seeks to require the 14th month pay for both government and private sector workers. A counterpart bill has also been filed at the Senate.

Under the current law, a 13th month pay is mandatory.

Mr. Ortis-Luis noted that large businesses actually “over comply” with the required bonuses for employees, and that it would be unfair if they are the only ones who will be required to comply with another month’s pay.

“Many even give 16th month so ‘di problema ‘yun (that is not a problem), they can afford it. Ang problema (The problem is), when you pass a law like that, hindi naman pupwede na sila lang (it can’t be that they would be the only ones covered).”

He added, “It doesn’t make sense because those who can afford it are already paying even more than that. Those who cannot afford it are the ones who is the problem.”

Micro enterprises constitute 88.45% of total establishments in the country, followed by small enterprises at 10.58%, and medium enterprises at 0.49%, based on Department of Trade and Industry 2018 data. — Genshen L. Espedido





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