Senator Imee Marcos urged the government to expand payroll aid beyond its Small Business Wage Subsidy (SBWS) program to prevent micro, small and medium enterprises (MSMEs) from laying off workers or folding up altogether if a lockdown to stop the spread of CCOVID-19 is extended. Marcos said the present P51-billion SBWS budget leaves some 4.6 million workers in MSMEs vulnerable to job losses, especially in sectors hit hardest by the lockdown, as those in trade, transportation, accommodation and food, manufacturing, and construction.
To cover them all, the government will need almost P63 billion in the first month alone, Marcos said, if subsidies are computed at 75% of the average monthly wage, pegged at P18,108 in the last Occupational Wages Survey in 2018.
Marcos, who chairs the Senate committee on economic affairs, estimates that up to three-fourths of MSME payrolls must be subsidized by government while community quarantine restrictions remain in place.
The Department of Finance has reported that more than 436,000 small businesses have closed shop since mid-March when a lockdown was imposed throughout Luzon and in some areas in the Visayas and Mindanao.
“The true engines of the economy are the daily wage earners and rank-and-file employees. Greater payroll subsidies mean giving MSMEs a greater chance of survival,” Marcos said.
Besides the 75-percent payroll subsidy laid out in Senate Bill 1431, dubbed the Economic Recovery Act of 2020, Marcos also proposed that zero-tariff rates be temporarily applied on imports of essential raw materials to help cut company costs and stabilize the prices of goods.
“Regulatory forbearance” will also keep MSMEs afloat while the duration of the COVID-19 crisis remains unknown, Marcos said, urging that 2020 tax payments be suspended for up to six months after enhanced community quarantines are lifted.
“We are only in the early stages of a global economic crisis due to COVID-19. The government must find more solutions to craft a long-term plan for economic recovery,” Marcos said./Stacy Ang