Senatorial candidate and incumbent Sorsogon Governor Francis “Chiz” Escudero on Monday urged the government to assess where to cut the red tape in the distribution of aid to micro, small and medium enterprises (MSMEs) considering there are still billions in unused Covid-19 cash aid for them.
Escudero said MSMEs struggling to recover from the impact of the pandemic cannot be idle for months while their applications are processed and the assistance released.
“Fighting red tape is the perpetual revolution. Cut, cut, cut. It is like a marathon. No record is static. It has to be broken,” said Escudero, who is seeking a fresh term in the Senate in the upcoming May 2022 elections.
“Hindi pwede ang (You can’t say) 33 days to start a business and 120 days to deal with construction permits, per a World Bank study,” he said.
Escudero is reacting to a Commission on Audit (COA) report that only P4.09-billion or 45 percent of the P9.08-billion allocation for the Covid-19 Assistance to Restart Enterprises (CARES) Program has been released as of June 30, 2021.
The fund is meant to be distributed as collateral-free, zero-interest loans to MSMEs affected by the pandemic.
According to COA, only 28,222 MSMEs availed of loans under the CARES Program, leaving nearly P5-billion in unused funds. The Small Business Corp. (SB Corp.), which runs the program, said only PP2.03-billion was left of the funds as of January 2022.
“Not all problems can be solved with peso signs. There is a limit to checkbook solutions,” he said.
“Sa experience ko, bilang gobernador na nakalapat ang paa sa lupa (In my experience, as a governor whose feet is on the ground), who starts his day by buying coffee from local brewhouse and ends it by shopping o nabudol ng mga anik-anik sa mga (or buying from) artisanal shops, isang problema ang ease of doing business ng mga maliliit na negosyante (one of the problems of small businesses is the ease of doing business),” Escudero said.
“3 Rs ang kailangan ng MSME—Recovery, Resources, Red Tape. The two involve administrative streamlining. In this age, ICT and internet should help lighten the load, not turn people into digital slaves. Bawasan natin ang papel, ang proseso, ang pagrepaso (let’s lessen the papers, the process and review),” he said.
Because of the long processing time and lack of updates on their loan application status, COA said 4,378 of the MSMEs or 9.12 percent of them canceled their applications.
As the only incumbent governor who is running for senator, Escudero said the government must find ways to ensure that the assistance meant for MSMEs find their way to MSMEs.
Otherwise, there is no hope for economic recovery: “Bakit? Dahil (Why? Because) 99.5 percent of businesses and establishments in the country are MSMEs. They employ 63% of labor and account for 40% of our gross domestic product. They are not a subsector of the economy—they are the economy,” Escudero said.
“Kailangan natin silang tutukan dahil kapag nakabangon sila, 99 percent din ng ating ekonomiya ang makakabangon, 99 percent din ang babalik na mga trabahong nawala (We need ot focus on them so they can recover, because 99 percent of our economy would recover, and 99 percent of job lossess would be restored),” he said.
A study made by the Department of Trade and Industry (DTI) show that in June 2021, 10 percent of MSMEs had closed, 46 percent were partially operating and 44 percent were in full operation due to the pandemic.