Debate over 14th month pay called a ‘distraction’ – BusinessWorld Online
By Kenneth Christiane L. Basilio, Reporter
THE LABOR movement continues to prioritize the campaign for a P200 daily minimum wage and warned that calls for 14th month pay could serve as a “distraction” from this effort.
Federation of Free Workers President Jose Sonny G. Matula said via Viber: “Our foremost priority is the P200 nationwide legislative wage hike… We hope the 14th month pay will not become a distraction or a substitute for a genuine wage hike.”
Senate Minority Leader Vicente C. Sotto III filed in July a bill seeking to require employers to grant workers 14th month pay to help them deal with the cost of living.
Senate Bill No. 193 also proposed that the 13th month pay be released no later than June 14, with 14th month pay disbursed no later than Dec. 24 of every year.
Presidential Decree No. 851 of 1976 requires employers to pay workers 13th month pay, equivalent to one-twelfth of an employee’s total basic salary earned within a calendar year.
Mr. Sotto’s bill “recognizes the indispensable value of labor to the growth of capital,” National President of Bukluran ng Manggagawang Pilipino Renecio S. Espiritu said via Viber.
Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said: “A 14th month pay is one way to address and attend to retention issues of firms,” he said via chat. “Happy workers are hard workers.”
But the productivity boost will likely be short-lived if monthly wages still lag the rising cost of goods, Josua T. Mata, Sentro ng mga Nagkakaisa at Progresibong Manggagawa secretary-general, said.
“Bonuses can indeed incentivize employees. However, this effect is short-lived if underlying pay remains inadequate,” he said via Viber.
Mr. Sotto’s proposal represents two pump-priming events each year, boosting domestic demand and providing support to local businesses, Mr. Velasco said.
“The 14th month will hit firms’ profits as it means bigger labor costs. But this can be offset by higher productivity and bigger demand,” he said.
