Rep. Jose María Clemente “Joey” Salceda is proposing a 45bn peso wage subsidy programme for millions employed by small and medium enterprises (SMEs) and for freelancers as other lawmakers suggest tapping debt payments to help them.
In a statement, Salceda said his wage subsidy scheme PSWES — “Payroll Support for Workers, Entrepreneurs and Self-employed Program” — would cover 5.98mn workers in small and medium enterprises, sole entrepreneurs and freelancers, whose incomes have taken a hit during the extended enhanced community quarantine.
“I wrote to President (Rodrigo) Duterte to recommend to him that we begin calibrating a wage subsidy programme for small and medium enterprises,” said the Albay representative, who is the House ways and means committee chairman.
The wage subsidy will be given for three months, he added.
He said the programme would provide relief to formal economy workers, entrepreneurs and self-employed individuals, who typically belong to the middle class.
Under the proposal, Salceda said around a quarter to a third of the average monthly minimum wage of P9,500 would be covered by the relief subsidy.
The cost of supporting their income, at P2,500 to P3,000 per month for two months, was P44.85bn to P53.82bn, he explained.
If approved, the proposed aid would be distributed by the Social Security System, with assistance from the Bureau of Internal Revenue and the Department of Labour and Employment, for formal economy workers, Salceda said.
For freelancers, Salceda said there could be an open-application window similar to CAMP —Covid Adjustment Measures Programme — of the Labour department.
In another suggestion to help SMEs, House Deputy Minority Leader Rep.Carlos Isagani Zarate and Bayan Muna party-list chairman Neri Colmenares called on government to consider a debt service moratorium.
This would be an alternative to added borrowings needed to revive the economy after the lockdown.
Zarate said in statement: “This global modern scourge should push the Duterte administration, along with other countries hard struck by the pandemic, to consider a debt service moratorium with the International Monetary Fund, World Bank (WB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank and other international and multilateral lending institutions.”
He said there were enough available fund sources in the 2020 national budget, contrary to President Duterte’s claim of “lack of budget” in one of his televised appearances.
“But, if the fight against Covid (coronavirus disease 2019) will take longer, then, it would be better to have a debt service moratorium rather than borrow more money from creditors,” he added.
He argued that it would be better for the Philippines not to borrow more money, adding that government debt has reached P7.7tn or equal to P70,000 per capita.
He noted that the government has P13bn contingency fund in the 2020 national budget, P16bn from the National Disaster Risk Reduction Management fund and at least P56bn of the agency’s accumulated funds up to 2019.
In total, these alone would amount to P85bn, Zarate said.
The lawmaker said there were also “billions of intelligence and confidential funds” that could be used for aid.
Colmenares, meanwhile, revealed that based on the 2020 national budget, “more than P450bn is earmarked for interest payment alone of foreign and domestic debt of the national government, while P582bn for principal payments or a whopping P1.033tn taken as a whole.”
Colmenares said in a separate statement that these could be used to build disaster resilient
evacuation centres for every three villages when future pandemics occur. He was reacting to an earlier government announcement that it would borrow $3mn from ADB.
That amount, equivalent to P153mn, would be a grant to help the government’s programmes to ease the economic impact of the pandemic.
Duterte also announced he would tap other facilities from the ADB as well as from the WB.
Source : https://www.gulf-times.com/story/660636/Wage-subsidy-scheme-proposed-for-SMEs