THE government is allocating P51 billion for a wage subsidy program that would benefit 3.4 million Filipinos employed by small businesses affected by the lockdown in Luzon and other parts of the country.
President Rodrigo R. Duterte on Monday evening approved the Small Business Wage Subsidy (SBWS) program wherein each eligible worker will receive P5,000 to P8,000, according to Cabinet Secretary Karlo Alexei B. Nograles.
Finance Undersecretary Karl Kendrick Chua said in a televised briefing on Monday evening the SBWS program will prioritize 2.6 million whose employers have complied with Bureau of Internal Revenue (BIR) and Social Security System (SSS) regulations as they can easily be tracked and the claims automatically processed.
Mr. Chua said about 800,000 who work for noncompliant firms will also receive wage subsidies.
Of the 1.6 million small businesses in the country, 436,0000 have halted operations since the enhanced community quarantine (ECQ) was implemented in mid-March, while one million establishments continued to operate with a skeletal force, Mr. Chua said.
About 117,000 businesses, such as food service, supermarkets and logistics, were allowed to operate during the ECQ, which has been extended to end-April.
Small businesses are defined as those not belonging to the top 2,745 large taxpayers of the BIR.
“Apart from the P205 billion that the government is giving to the informal sector, or those with low-income, we are giving P51 billion to the employees of small businesses. We will improve upon the social amelioration program because this plan to give the subsidy is automated, not manual, so (it will be) faster,” Mr. Chua said.
The wage subsidy will cover two months, with the first tranche to be distributed from May 1-15 and the second tranche will be given from May 16-31.
Mr. Nograles said payouts will be given through the SSS Unified Multi-purpose ID card enrolled as an ATM account; bank accounts; quick cards, e-wallet system such as Paymaya and remittance transfers.
To avail himself of the program, Mr. Nograles said the worker should have been employed by the company as of March 1, and has not received a salary for the month. All eligible workers will be covered except those that were on leave and those that already availed themselves of the unemployment benefits from the SSS.
In addition, he said employees should not have been retrenched or resigned.
“We want to retain the employment status of the employee,” Mr. Nograles said.
Beneficiaries of the COVID-19 Adjustment Measures Program (CAMP) of the Labor department who have received P5,000 will only be eligible for a one-month wage subsidy.
Other details, mechanics and eligibility criteria under the SBWS program will be announced this week, according to the Department of Finance (DoF).
The DoF is also considering a proposal to grant small businesses affected by the pandemic a credit guarantee “to provide them easier access to bank financing.”
Meanwhile, Albay Rep. and House and Ways and Means committee chairman Jose Maria Clemente S. Salceda proposed a Philippine National Stimulus Strategy, which he described as a “structural adjustment plan to rescue critically needed industries and keep others operating” amid the pandemic.
The strategy, which he presented during a House committee virtual hearing on Tuesday, involves a negative interest loans (NIL) plan; credit refinancing and mediation service (CRMS) for micro, small and medium enterprises; creation of the National Emergency Investment Corp.; and enhancement of the “Build, Build, Build” program.
The NIL plan is a P350-billion loan package that will grant loans at negative interest, in exchange for worker retention.
Mr. Salceda proposed that the maximum loanable amount will be 50% of the company’s direct labor costs, payable for three to five years, with the corresponding interest rates as follows: -9% for three years, -7% for four years, and -5% for five years.
To ensure that eligible MSMEs will have access to negative interest loans, Mr. Salceda suggested that the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) open an SME Safeguard Facility dedicated exclusively to these enterprises.
Meanwhile, the CRMS seeks to ensure that MSMEs can fulfill obligations under more favorable terms of credit.
“With CRMS, the Small Business Corporation can provide an MSME Credit Mediation and Restructuring Service to assist MSMEs in negotiating more favorable credit terms with banks, lending institutions, and financial intermediaries, provide technical advice and assistance with credit mediation and offer loan guarantees and direct loans with favorable terms for refinancing the obligations of MSMEs,” Mr. Salceda said.
Mr. Salceda also proposed to create the NEIC, similar to the Power Sector Assets and Liabilities Management Corp. and the Central Bank – Board of Liquidators (CB-BOL) to act as a consolidator of private sector debts, pay these debts in exchange for equity, and yield returns for the government.
He also proposed an “enhanced” “Build, Build, Build” program by granting special powers to expedite its implementation.
Meanwhile, Marikina Rep. Stella Luz A. Quimbo said during the virtual hearing that the government needs to spend a total of P700 billion to address the potential loss in the country’s gross domestic product (GDP) due to the coronavirus. — Beatrice M. Laforga and Genshen L. Epedido