MSME subsidy loan a step in the right direction – Concepcion

Published May 23, 2022, 2:12 PM

by Bernie Cahiles-Magkilat

Presidential Adviser for Entrepreneurship Joey Concepcion expressed support to a labor group’s proposal that government provide a subsidy loan to micro, small and medium enterprises (MSMEs), calling the move a “step in the right direction.”

In supporting the labor group’s proposal, Concepcion said that providing subsidy loans would be more inclusive and would help create jobs. “I agree that helping MSMEs will result in more inclusive, more sustainable growth for the economy and will benefit more workers in the long run,” said Concepcion, who is also founder of Go Negosyo.

To hasten the country’s economic recovery, the Federation of Free Workers (FFW) has pushed government to implement a P100-billion subsidy loan for MSMEs. FFW President Sonny Matula said the wage increase granted by different Regional Tripartite Wages and Productivity Boards (RTWPBs) for minimum wage earners is insufficient to boost the economy.

Concepcion explained that MSMEs are closely intertwined with job generation in the Philippines. “If we are to provide more jobs to more Filipinos, we have to grow the sector that accounts for more than half of the employment in the country,” he said.

The Department of Trade and Industry estimates that MSMEs generate for more than 60 percent of jobs in the country with micro-enterprises accounting for the largest share.

Moving forward, he also urged the incoming administration to protect MSMEs as they will be key to job creation, and added that it would be difficult for micro enterprises to manage the additional costs of wage increases. “These micro enterprises live hand-to-mouth right now, and are still repaying their loans,” he said.

Concepcion explained that while wage increases are welcome, generating jobs will bring more inclusive and sustainable growth.

The FFW also said that the recent daily minimum wage increase, P33 in the National Capital Region, is not sufficient, thus, a P100-billion stimulus package as a subsidy/loan for MSMEs and financial package assistance to workers who lost their employment would be critical to uplift the domestic economy.

The group also noted of Concepcion’s recommendation to the next administration to protect MSMEs, which he said are key to job creation.

He noted that MSMEs generate more than half of employment nationwide. Creating jobs, he stressed, would bring more inclusive growth than wage hikes

Larger businesses, meanwhile, are still dealing with higher cost of commodities. Concepcion said that increased economic activity will encourage large companies to step up their production, driving demand for workers and pulling up wages to entice them into their workforce.

Meantime, during the Monday, May 23, Laging Handa, Concepcion reiterated that the country’s economic health goes hand-in-hand with efforts to boost vaccinations and maintain lower alert levels. “It is important that our economic frontliners remain protected, even as our infections are now muted,” he said. As of March 2022, the private sector employs nearly half of the 47 million Filipinos who are currently in the labor force.

Concepcion added that with the elections now over, local government officials can resume focusing on vaccinations. A new administration, he said, always brings renewed confidence among investors, as he expressed hope that presumptive president Ferdinand “Bongbong” Marcos Jr. will continue the programs started by President Rodrigo Duterte. “Our economy is doing very well but we need to generate more jobs,” he said.

MSMEs were severely affected by mobility restrictions during the pandemic, and continued to suffer from higher commodity prices and supply chain disruptions when the conflict between Russia and Ukraine broke out. Larger corporations, meanwhile, stand to become adversely affected by decreased productivity due to absenteeism and prolonged symptoms brought on by long Covid.

“That is why we have been pushing for vaccinations and boosters. It is the best way to address these disruptions in our economy,” said Concepcion.