Latest Stories

DOLE: 14th-month pay to worsen unemployment



MANILA,  Philippines  — Some 4.5 million  workers  might lose their  jobs  if  Congress would pass a bill mandating a 14th-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 14th 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 14th 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 13th- 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.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: 14th month pay , bonus , Labor , Nation , News

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
  1. Enrile chief aide back in PH ‘to face charges’
  2. Gigi Reyes back to face charges
  3. SC suspends proctor in 2011 bar exams
  4. What Went Before: Enrile denies Gigi Reyes was ‘other woman’
  5. In the know: Gigi Reyes
  6. Henares on Pacquiao bashing: I did not start this
  7. At 77, Erap has Easter treat for Manila cops but keeps City Hall folk in agony
  8. Solons seek ample protection for bank depositors
  9. ‘No real progress in PH if dynasties not dismantled’
  10. More legal woes for Cedric Lee
  1. Kim Henares needs a reprimand, says Cayetano
  2. Suspect in Vhong Navarro mauling tries to leave PH
  3. More legal woes for Cedric Lee
  4. ‘No real progress in PH if dynasties not dismantled’
  5. ‘Mom, I love you,’ says text from student on sinking ferry
  6. Fr. Suarez says last Mass on Easter before returning donated land to San Miguel
  7. Enrile chief aide back in PH ‘to face charges’
  8. Massive infra spending set
  9. Henares on Pacquiao bashing: I did not start this
  10. I’ll follow my conscience on Estrada, says JV Ejercito
  1. KL confirms Malaysian Airlines Flight MH370 ended in Indian Ocean
  2. MRT passengers pass the hat for 6-year-old Ashley
  3. Rookie, lady cops lauded for quick response to MOA heist
  4. Malaysia averts another air tragedy; pilot lands troubled plane safely
  5. Revilla says he was joking; Lacson stands by his story
  6. Revilla ‘consulted’ Lacson on how he evaded arrest
  7. Police rule out foul play in Helena Belmonte’s death as boyfriend is ‘traumatized’
  8. Cudia, dismissed for lying, got 99% in conduct
  9. Model Helena Belmonte wished ‘to slash her wrist and hope to die’
  10. Hammer-wielding robbers cause chaos at Philippines’ Mall of Asia


  • ‘I’ll make it,’ says young ferry passenger to family
  • Bad weather halts rescue after deadliest Everest disaster
  • Gigi Reyes has no other option but to turn state witness — Santiago
  • US weighing military exercises in Eastern Europe
  • Rains loom in Surigao as LPA nears
  • Sports

  • Nick Calathes suspension a reminder of supplement risk
  • Teague scores 28 as Hawks soar past Pacers in Game 1
  • Warriors beat Clippers in playoff opener
  • Pacquiao top Mayweather contender
  • Rain or Shine, Ginebra clash for No. 6 spot
  • Lifestyle

  • Noli Yamsuan, Cardinal Sin’s ‘official’ photographer: ‘I could smell the aftershave lotion of the Pope’
  • Simplifying and lightening life
  • Where to go for Easter night-out
  • Joe de Venecia visits the Queen Mother of Cambodia
  • Fashionistas flock to designer’s wedding
  • Entertainment

  • Show-biz celebrities’ other choices of summer getaway
  • Why ‘Noah’ can’t dock his ark at Philippine theaters
  • Acclaimed artist goes wild while on holiday
  • Believing in this mermaid
  • Missing Xian
  • Business

  • Top-selling insurance agent opens her dream café
  • Connecting and transacting with one another
  • Building wealth for health
  • Why Mandaue Foam buys, rather than rents, space
  • A workplace of new possibilities
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Epiphany
  • Unpaid creditor vs distressed debtor
  • Moving on
  • From culinary desert to paradise
  • Response to China: ‘Usjaphil’
  • Global Nation

  • Asia seeks Obama’s assurance in territorial spats
  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Filipinos in US poised for success
  • Visas for priests and other faith leaders
  • DOH to continue tracking co-passengers of OFW infected with MERS virus
  • Marketplace