DOF chief unveils P35-B program to help MSMES; no aid for middle class households

THE government may not hand out cash aid to middle class households for now but Finance Secretary Carlos G. Dominguez III said they are working on a P35-billion program for micro, small and medium enterprises (MSMES).

Dominguez said in a television interview on Monday that it is unlikely that the government will be giving money to the middle class.

This, after Cavite Gov. Jonvic Remulla appealed to President Duterte to include those belonging to the middle class in the government’s social amelioration program intended for the poorest of the poor affected by the novel coronavirus 2019 (Covid-19).

“I doubt it at this point in time because when we define middle class… first of all, [are] those people who have regular jobs, those people who are working for the MSMES definitely receive a cash support. And we believe that there would be around 3 and a half million people involved there, and the total cost will be between P35 billion and P51 billion. So that part of the middle class they will receive support,” Dominguez said in an interview on CNN Philippines’s The Source.

In a separate statement issued on Monday, Dominguez said those belonging to the middle class who are part of small businesses are covered by the emergency subsidy package announced by the government in the form of wage subsidies amounting to at least P35 billion.

Moreover, he said, the government will also unveil an assistance package for the middle class employed or operating MSMES, including a loan guarantee program for them.

Sought for clarification, Finance Assistant Secretary and spokesman Tony Lambino told the Businessmirror the initial amount proposed for the program is P35 billion but this would be bigger because this would have other components other than wage subsidy.

“The program, with other components, might be approved over the next couple of days,” Lambino said in a message.

Dominguez also said in the interview that the needs of the middle class who are regularly employed have also been initially addressed under Republic Act 11469, or the Bayanihan Law, through the grant of grace periods or extensions for them to pay their amortizations and other forms of loans.

“Those [provisions under the Bayanihan Law] are designed primarily for the middle class because it’s the middle class that has housing loans, it’s the middle class that have credit-card loans, etc.,” he said.

Asked whether the government can manage an extension of the Luzonwide enhanced community quarantine should it last until June, the country’s finance chief said: “We will make sure that there will be enough funds to support those decisions. We are watching this very carefully and we are moving very conservatively.”

To keep the economy afloat and help it bounce back quickly once Covid-19 pandemic is over, the government is working on raising additional funds by using fiscal and monetary tools and tapping concessional financing options from multilateral institutions.

Dominguez earlier said the government needs to borrow $5.7 billion to finance government’s response for Covid-19.

He said they have so far outlined P1.17 trillion worth of fiscal, budgetary and monetary measures under its socioeconomic strategy against Covid-19, of which, a third, or around 1.6 percent of country’s gross domestic product (GDP), will go to emergency subsidies for poor and low-income households and other vulnerable groups bearing the brunt of the pandemic’s economic impact.

While the team headed by Dominguez is currently designing the government’s economic recovery plan, he said this will be fueled primarily by the Duterte administration’s flagship projects under the “Build, Build, Build” program as these project will continue and will not be downgraded.

Dominguez earlier said the government’s budget deficit would also widen to 5.3 percent of GDP from its earlier target of 3.2 percent of GDP.

The country’s debt-to-gdp ratio would also rise to 47 percent of GDP from 41 percent previously, he added.

But Dominguez said the debt-togdp ratio of the country is “still very low compared to our neighbors.”