13th month pay can’t be deferred – Palace

MANILA, Philippines — Even with businesses suffering losses due to the COVID-19 pandemic, employers are still legally required to give workers their 13th month pay.

Malacañang said on Monday, October 12, 2020, that the law on the grant of the yearly incentive remains in effect.

“Let the Department of Labor and Employment study it. But in my opinion, that cannot be deferred until there is a new law,” presidential spokesperson Harry Roque said in a press briefing.

Earlier, Labor Secretary Silvestre Bello III said the labor department was considering allowing “distressed” companies and businesses to defer the release of their employees’ 13th month pay, a move that may affect around 2 million workers, according to the Employers Confederation of the Philippines.

Bello later clarified it was not the labor department’s intent to call for a deferment of the incentive after lawmakers and labor groups said that workers should not be made into “sacrificial lambs.”

“The [Implementation rules] of Presidential Decree No. 851 provides for an exception, not us,” he said in a text message.

But Bello was contradicted by Senate Minority Leader Franklin Drilon, who said that allowing companies to withhold the 13th month pay due to financial losses would set a “dangerous precedent.”

“Under the law, there’s no exemption even if the company is incurring losses,” said Drilon, a former labor secretary, referring to PD 851.

—With reports from Tina G. Santos and Marlon Ramos