Why putting people first makes economic sense

Published April 6, 2020, 12:00 AM

by manilabulletin_admin



John Tria
John Tria

Last week, a few quarters loudly wondered on social media whether small businesses would get the same relief and assistance as the 18 million poor families and the displaced workers, which it claimed would get most of the P200 billion in funds under the “Bayanihan We Heal as One” law.

First off, the truth is that contrary to those posts, government financial institutions such as the Small Business Corporation, the Development Bank of the Philippines, and the Land Bank of the Philippines have just announced various financing programs for MSMEs to help them recover their losses and sustain their respective businesses. Readers can call their offices or visit their websites to apply for these programs, and follow through on them once the quarantines are lifted.

On top of the this is P31 billion for the Department of Agriculture’s various programs which also includes 3 billion for farmers’ social amelioration, apart from the P7-billion  palay procurement program for the farm sector.

Truth is, this is the first time we are seeing direct cash transfers to the vulnerable, and large sums for food production in the rural sector, where a lot of the 18 million vulnerable families live.

This unprecedented amount is the first time such a massive social program was ever launched by a Philippine government on its own. The nearest instance would be the post-World War 2 rehabilitation effort, fed mainly by American money through the US Philippine Rehabilitation Act of 1946, the parity rights amendment, and Japanese war reparations.

Looking deeper into the Bayanihan law’s  social components, it is not only a safety net for vulnerable sectors, but economic stimulus that creates demand for many of the products and services  provided by many microbusinesses and farms, especially in the rural and depressed urban areas —  a welcome cash infusion in the provinces to sop up excess produce  now that the harvest season is upon us.

To illustrate my point, I just bought a kilo of fresh squid and shrimp at 20% less than the prevailing market price (already lower than usual) from an ambulant vendor straight from the Davao fishport.

He was among many who sell food to their immediate neighbors. A cash infusion in their neighborhoods provides income for their daily trade, and livelihood for the local fisherfolk who fish and farmers who harvest local vegetables.

Now, if he and others like him can borrow from the SB Corps P3-million fund they can obtain working capital to buy more from fishers and deliver the same to more households, earning more per unit of time during the limited workday — while helping feed hundreds.

They gamely told me that business is actually brisk despite the community quarantine, and that some items in their icebox are “reserved” by some regular customers.

The Bayanihan package deals with the economic impact of the COVID-19 pandemic, mitigating the risk that the depressed purchasing power will not provide the needed demand to drive local business, consume food harvests, and sustain livelihoods in an economy where growth is expected to drop to 2% from the current 6%, according to the Asian Development Bank.

In the end, the Bayanihan law is putting people first, making good economic sense because it is investing in their capability to consume our farm produce and be customers that sustain our businesses in these times, preserving jobs. In turn, we entrepreneurs can look forward to growth upon which banks lend us credit to rebuild the working capital, the means for sustaining our businesses and recovering losses.

Stay safe, everyone!