Lawmaker bats for ₧45-B wage subsidy for workers

THE chairman of the House Committee on Ways and Means has proposed to President Duterte the implementation of a P45-billion wage subsidy scheme for 5.98 million workers in small and medium enterprises (SMES), sole entrepreneurs, and freelancers affected by the enhanced community quarantine (ECQ).

In a letter to the President, Albay Rep. Joey Sarte Salceda said the Payroll Support for Workers, Entrepreneurs, and Self-employed (PSWES) Program will help small enterprises, and freelancers who will likely face financial difficulties in the weeks after.

Citing Bureau of Internal Revenue (BIR) data, the lawmaker said micro, small and medium enterprises (MSMES) employ around 4.1 million formal economy workers, saying some 380,000 entrepreneurs are sole enterprises.

Also, he said the 2018 Global Freelancer Insights Report showed that about 1.5 million Filipinos are freelancers, “together, these sectors have a combined work force of 5.98 million workers.”

“I wrote to President Duterte to recommend to him that we begin calibrating a wage subsidy program for small and medium enterprises, as well as for those in the gig economy. We will need these enterprises to operate, so it’s essential for the economy and for job preservation that we lend them a helping hand,” he said.

According to Salceda, a payroll support program will likely be necessary to support MSMES that will face liquidity issues in the wake of the ECQ, as well as their workers, who are at risk of being terminated if these MSMES are unable to pay their wages and maintain operations.”

“Apart from supporting business, the program will also be able to provide relief to formal economy workers, entrepreneurs, and selfemployed individuals, who typically belong to the middle class. Income support will also likely be necessary for freelancers and those in the gig economy who were unable to earn income due to the ECQ,” he said.

Salceda is proposing that the wage subsidy be distributed for three months.

“The average monthly minimum wage is around P9,500 per month. We proposed a wage subsidy that covers around a quarter to a third of this amount. The cost of supporting their income, at P2,500 to P3,000 per month for two months, is P44.85 billion to P53.82 billion,” he said.

Under the proposal, the lawmaker said the subsidy will be distributed via the Social Security System (SSS), assisted by the BIR and the Department of Labor and Employment (DOLE) for formal economy workers.

For freelancers, he proposed an open-application window similar to the Covid Adjustment Measures Program (CAMP) of DOLE.

“I’m also proposing that we couple the open-application process for freelancers with cost-free BIR and SSS registration. That way, they are able to see the full benefits of being accredited with the state, while also being able to contribute in future years when they are in better conditions. We will need to expand the tax base when this situation normalizes. I think this will be a big part of that effort,” he said.

For her part, Bagong Henerasyon Rep. Bernadette Herrera underscored the importance of providing much-needed support to the country’s MSMES amid the coronavirus disease 2019 (Covid-19) pandemic, saying it would help preserve millions of local jobs.

“We should make sure that MSMES are given whatever support they need not only to keep their businesses afloat, but more importantly, to prevent people from losing their jobs as we face an unprecedented public health crisis,” said Herrera.

Citing data from the Philippine Statistics Authority (PSA), Herrera said that 99.52 percent, or 998,342 of the 1,003,111 business enterprises operating across the country in 2018 are MSMES. The remaining 4,769, or 0.48 percent, represents the large enterprises, she added.

Of the total MSME establishments, Herrera said micro enterprises constitute 88.45 percent (887,272), followed by small enterprises at 10.58 percent (106,175) and medium enterprises at 0.49 percent (4,895).

Herrera said it was ”unfortunate that the Covid-19 pandemic leaves many small business owners and workers uncertain about their future.”

She also said it’s “a good thing the government is working proactively to help small businesses cope with the impact of the ECQ.”

Herrera cited the P1-billion loan facility set up by the Small Business Corp., the financing arm of the Department of Trade and Industry, for MSMES, which will be implemented once the ECQ is lifted.

The lawmaker has proposed a number of measures to support MSMES amid the uncertainties brought about by the Covid-19 pandemic. These include tax breaks, six-month moratorium on creditcard payments and bank loans, and a revamp of capital markets to allow smaller businesses easy access to capital.