Marikina Rep. Quimbo proposes post-COVID wage subsidy program for MSMEs
Published Apr 20, 2020 12:00 am
By Jenny Ortuoste and Rizal Obanil
A Marikina solon believes that the government should help small business owners get back on their feet after the Luzon-wide enhanced community quarantine (ECQ) is lifted.
Marikina 2nd district Rep. Stella Luz A. Quimbo (Photo from PHCC / MANILA BULLETIN/ FILE)
Marikina 2nd district Rep. Stella Quimbo has proposed an economic stimulus measure dubbed the Economy Moving Forward as One bill, which, among other features, gives micro, small, and medium enterprises (MSMEs) a wage subsidy for payroll costs after the ECQ is lifted.
In an interview Saturday over ANC, she said the national government's P51 billion wage subsidy program targets the employees of about one million registered MSMEs, and gives them a subsidy of P5,000, but this program does not cover “unregistered” MSMEs.
“There are about 4.5 million ‘informal,’ meaning not formally registered, MSMEs,” she said. “So there’s a bigger number of those that are not covered in this wage subsidy program… There’s a lot that will be falling through the cracks.”
Quimbo also proposes a wage subsidy, “but targeting the business owners.”
She said that ultimately this will prevent people from losing their jobs because "it's the owner that makes the decision to keep the employee or not.”
Quimbo said after the lifting of the ECQ, businessmen still have to deal with the fact that they have incurred losses and unfortunately may have to make a decision to lay off some employees or reduce their compensation.
“If we’re thinking about what happens post-COVID, well then you also need also to set aside an amount to subsidize wages to be paid by owners of the small businesses,” she said.
Giving an example of a small business owner, Quimbo said, “Post-lockdown she can go for example to the DOLE (Department of Labor and Employment) and avail (herself) of wage subsidies for payroll costs moving forward.”
Post-COVID world
She added that people need to think about the changes in society that will come about in a “PC” or “post-COVID” world. “Everything is going to change.”
She also said government should help small businesses cope with a post-COVID reality, “where there is less contact and higher health standards.”
Quimbo gave the example of a masseur who, post-COVID, will incur additional costs such as face masks and perhaps gloves and a COVID test.
Another example was that of a housewife working from her house making bags and employing several helpers, and who would incur costs to set up an online selling portal, because after COVID, people would shy away from going to brick-and-mortar stores.
She said government should “offer grants for capacity building for this type of assistance.”
Quimbo said she estimates that around P110 billion pesos is needed to fund the wage subsidies program, to be sourced from unappropriated funds, bond issuances, and loans from multilateral agencies, which she called the “best kinds of loans because of low interest rates.”
Losses to the economy
The Marikina solon said businesses lose a combined P 18 billion per day while the ECQ is in effect, while on the macrolevel, the economy could potentially lose P1.08 trillion.
To explain this, Quimbo said: “Every percentage growth of GDP (gross domestic product) is equivalent to about P198 billion. So if we are expecting to lose, say, 5.5 percentage points of GDP growth, meaning if you go from a growth of 6 percent to 5.5 percent, so you lose 5.5 percentage points, so you multiply that by P198 billion, that gives us P1.1 trillion.”
Read more: https://news.mb.com.ph/
Marikina 2nd district Rep. Stella Luz A. Quimbo (Photo from PHCC / MANILA BULLETIN/ FILE)
Marikina 2nd district Rep. Stella Quimbo has proposed an economic stimulus measure dubbed the Economy Moving Forward as One bill, which, among other features, gives micro, small, and medium enterprises (MSMEs) a wage subsidy for payroll costs after the ECQ is lifted.
In an interview Saturday over ANC, she said the national government's P51 billion wage subsidy program targets the employees of about one million registered MSMEs, and gives them a subsidy of P5,000, but this program does not cover “unregistered” MSMEs.
“There are about 4.5 million ‘informal,’ meaning not formally registered, MSMEs,” she said. “So there’s a bigger number of those that are not covered in this wage subsidy program… There’s a lot that will be falling through the cracks.”
Quimbo also proposes a wage subsidy, “but targeting the business owners.”
She said that ultimately this will prevent people from losing their jobs because "it's the owner that makes the decision to keep the employee or not.”
Quimbo said after the lifting of the ECQ, businessmen still have to deal with the fact that they have incurred losses and unfortunately may have to make a decision to lay off some employees or reduce their compensation.
“If we’re thinking about what happens post-COVID, well then you also need also to set aside an amount to subsidize wages to be paid by owners of the small businesses,” she said.
Giving an example of a small business owner, Quimbo said, “Post-lockdown she can go for example to the DOLE (Department of Labor and Employment) and avail (herself) of wage subsidies for payroll costs moving forward.”
Post-COVID world
She added that people need to think about the changes in society that will come about in a “PC” or “post-COVID” world. “Everything is going to change.”
She also said government should help small businesses cope with a post-COVID reality, “where there is less contact and higher health standards.”
Quimbo gave the example of a masseur who, post-COVID, will incur additional costs such as face masks and perhaps gloves and a COVID test.
Another example was that of a housewife working from her house making bags and employing several helpers, and who would incur costs to set up an online selling portal, because after COVID, people would shy away from going to brick-and-mortar stores.
She said government should “offer grants for capacity building for this type of assistance.”
Quimbo said she estimates that around P110 billion pesos is needed to fund the wage subsidies program, to be sourced from unappropriated funds, bond issuances, and loans from multilateral agencies, which she called the “best kinds of loans because of low interest rates.”
Losses to the economy
The Marikina solon said businesses lose a combined P 18 billion per day while the ECQ is in effect, while on the macrolevel, the economy could potentially lose P1.08 trillion.
To explain this, Quimbo said: “Every percentage growth of GDP (gross domestic product) is equivalent to about P198 billion. So if we are expecting to lose, say, 5.5 percentage points of GDP growth, meaning if you go from a growth of 6 percent to 5.5 percent, so you lose 5.5 percentage points, so you multiply that by P198 billion, that gives us P1.1 trillion.”
Read more: https://news.mb.com.ph/