₱45-B wage subsidy eyed for workers

Published April 11, 2020, 12:00 AM

by manilabulletin_admin

By Charissa Luci-Atienza, Genalyn Kabiling, Leslie Ann Aquino, and Ellson Quismorio

House Ways and Means Committee Chairman and Albay 2nd district Rep. Joey Sarte Salceda has recommended to President Duterte the implementation of a P45-billion wage subsidy program for nearly six million workers, small entrepreneurs, and freelancers

Albay Rep. Joey Salceda  (Office of Albay Rep. Joey Salceda / MANILA BULLETIN)
Albay Rep. Joey Salceda 
(Office of Albay Rep. Joey Salceda / MANILA BULLETIN)

Cabinet Secretary Karlo Nogales said the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) will study if the workers affected by the Luzon-wide Enhanced Community Quarantine are covered by existing assistance programs. The IATF will also check if the government can afford extending such massive financial aid

The number of displaced workers due to the coronavirus disease 2019 (COVID-19) pandemic has breached the 1-million mark, the Department of Labor and Employment said.

Citing reports from their regional offices, the labor department said some 1,048,649 workers in the formal sector were either affected by temporary closures or flexible work arrangements.

DOLE said the figure is on top of the close to quarter of a million informal sector workers needing assistance under the Tulong Panghanapbuhay sa Displaced/Disadvantaged Workers Program-Barangay Ko, Bahay ko (TUPAD-BKBK) program.

According to the labor department, as of April 11, Metro Manila recorded the highest displacement with about 246,810 workers.

The DOLE said most of the affected were displaced by the temporary closure of about 31,612 establishments involving 719, 649 workers, with another 10,224 enterprises resorting to flexible work arrangements which include reduction of workdays, work rotation, forced leave and work from home or telecommuting affecting 366,404 workers.

It added that majority of the workers belong to manufacturing, hotel, restaurants and tourism-related sectors, and education.

PSWES for SMEs workers

 Salceda said the proposed Payroll Support for Workers, Entrepreneurs, and Self-employed (PSWES) Program seeks to cover 5.98 million workers in small and medium enterprises (SMEs), sole entrepreneurs, and freelancers and will be implemented for three months. “

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.

Salceda is the co-chairman of the Defeat COVID-19 Committee’s Economic Stimulus and Response Package cluster tasked with drafting the House’s economic stimulus plan for transitioning out of and recovering from the COVID-19 crisis.

The House leader asked President Duterte to consider his proposed subsidy program that seeks to ease the financial plight of middle class workers.

“A payroll support program will likely be necessary to support micro, small and medium enterprises (MSMEs) that will face liquidity issues in the wake of the enhanced community quarantine (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,” he said in a note to President Duterte.

“Apart from supporting business, the program will also be able to provide relief to formal economy workers, entrepreneurs, and self-employed 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,” Salceda wrote.

Citing Bureau of Internal Revenue (BIR) data, Salceda’s office estimates that MSMEs employ around 4.1 million formal economy workers, while some 380,000 entrepreneurs are sole enterprises.

About 1.5 million Filipinos are freelancers, it said, citing the 2018 Global Freelancer Insights Report.

“Together, these sectors have a combined workforce of 5.98 million workers,” it noted.

Salceda said he is proposing a wage subsidy that “covers around a quarter to a third” of the average monthly minimum wage, which is around ₧ 9,500 per month.

“The cost of supporting their income, at P2,500 to P3,000 per month for two months, is P44.85 to P53.82 billion,” he noted.

He said most of the cash subsidy for formal economy workers will be distributed via the Social Security System (SSS), which will be assisted by the Bureau of Internal Revenue (BIR) and the Department of Labor and Employment (DOLE).

“For freelancers, I am proposing an open-application window similar to the COVID-19 Adjustment Measures Program (CAMP) of DOLE,” Salceda said.

“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,” he added.

He said when the situation normalizes, they “will need to expand the tax base.”

5.7M jobs at stake

The government can help save 5.7 million jobs by ensuring support to the country’s micro, small, and medium enterprises (MSMEs) amid the COVID-19 pandemic, Bagong Henerasyon (BH) Party-List Rep. Bernadette Herrera said. “

[It’s] unfortunate that the COVID-19 pandemic leaves many small business owners and workers uncertain about their future,” said Herrera, a deputy majority leader of the House.

“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,” she said.

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 around the country in 2018 are MSMEs. The remaining 4,769 or 0.48 percent are the large enterprises.

Herrera had earlier 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 credit card payments and bank loans, and a revamp of capital markets to allow smaller businesses easy access to capital. She also proposed a two-month wage subsidy for MSME workers equivalent to the minimum wage by region to help them cope with the coronavirus crisis.