DOLE: 14th-month pay to worsen unemployment

Sen. Vicente Sotto III. INQUIRER FILE PHOTO

MANILA,  Philippines  — Some 4.5 million  workers  might lose their  jobs  if  Congress would pass a bill mandating a 14^th-month pay for all  government and non-government rank and file employees, the  Department of  Labor and Employment (DOLE) told a Senate  hearing  on Wednesday.

Citing an initial study conducted by the National Wages and  Productivity Commission, its  executive director, Maria Criselda Sy told the Senate committee on civil service  and government  reorganization that the passage of the bill might result in total labor cost of up to P1 billion  per day and   the retrenchment of 4.5  persons  particularly  the “unskilled workers.”

If the proposed 14^th month pay would be given to the estimated 755,000 minimum wage  earners in the National Capital Region alone this year,  Sy said it  would cost the employers P457 million a day or  P459 million in 2014  when  the additional cost of living allowance (COLA) is integrated in  January next year.

But since 99 percent or 800,000 establishments in the country are in micro, small, and medium enterprises (MSMEs) and 211, 646 of them are in the NCR,  she said, the proposed 14^th month pay  if implemented this year would result in total labor cost of P1 billion a day for 1.6 million workers in this sector.

If the additional pay would be implemented in 2014, Sy said, this would cost the establishments P1.009 billion a day including the COLA.

“Ang impact po natin ay nandun sa ating mga unskilled workers because the moment we increase the labor cost of the employers , yun hong mga hindi skilled workers ang tataaman kasi sila po ang unang unang mare-retrench,”  Sy said.

“Initially, it will really improve the purchasing powers of our workers but the more relevant question is that  where do we get the money that we will give to them..?”  she asked.

But Senator Vicente “Tito” Sotto III, who filed the  bill,  questioned  the  study, saying  it looked like it was prepared by the economists  rather than the DOLE.

“The figures that you’re mentioning were so mindboggling. Pero pag titingnang mo yung proposal noong bill, simpleng simple lang e. Isang buwan lang ang idadagdag mo. Sa June, pang tuition…” Sotto said.

“Parang ang nag-prepare nitong study mo parang hindi Department of Labor e,   parang mga ekonomista. Dapat yan ang stand ng ECOP (Employers’  Confederation of the Philippines)… Otherwise palitan na lang natin ang pangalan nyo, gawin nating Department of Management. Dapat ho labor kayo,” Sotto added.

“You’re Department of Labor, you’re not the Department  of Management so dapat mas kampi  kayo sa labor,”   he stressed.

Sotto said his bill if passed into law would be the “real” bonus that the workers would get saying that the existing 13-month pay should not be considered as one.

“Mr. chairman, there’s no such thing as 13^th– month pay na bonus kung tutuusin. Bakit? There are 52 weeks in a year divide it by four weeks in a month. Thirteen months. wala namang bonus na ibinigay e. Ito pa lang ang tunay na bonus, itong 14-month pay,” he said.

Besides, Sotto said his proposed measure provides a provision for distressed employers who could not afford to give an additional bonus and therefore apply for an exemption.

DOLE  Undersecretary Rebecca Chato requested the committee to  allow them  further discussions and consultations on the issue with the affected sectors.

“As always sir, it has been a practice that we need to balance; we need to maintain a very critical balance as this has  implication also in generating employment as most of our establishments, 98 percent of our establishments are micro, small and medium enterprises,” Chato said.