Government eyeing P8,000 monthly wage subsidy

by Louella Desiderio (The Philippine Star), 2 May 2021

MANILA, Philippines — Private sector workers in micro, small and medium enterprises (MSMEs) may receive a wage subsidy of P8,000 each for three months as part of the government’s eight-point agenda for employment recovery from the impact of the COVID-19 pandemic.

At a job summit of the Task Group on Economic Recovery-National Employment Recovery Strategy (NERS) yesterday, Department of Trade and Industry (DTI) Secretary Ramon Lopez said the government has proposed a P24-billion wage subsidy program for private sector workers to preserve and protect existing employment.

“The proposed program shall provide subsidy equivalent to P8,000 per month for a maximum of three months to affected workers through the establishment’s payroll system,” he said.

Also at the job summit, Philippine Chamber of Commerce and Industry (PCCI) president Benedicto Yujuico called for immediate vaccination against COVID-19 of essential economic workers and the digitalization of businesses.

Lopez said priority would be given to MSMEs on flexible work arrangements or under temporary closure but intending to return to business operation.

The program would also prioritize MSMEs that availed of the Small Business Corp.’s COVID-19 Assistance to Restart Enterprises program.

Lopez said the National Economic and Development Authority (NEDA) is evaluating the proposed wage subsidy program, which is expected to benefit one million workers.

Also involved in the wage subsidy program are the Department of Labor and Employment, Department of Budget and Management and the Department of Finance.

Also part of the Eight-Point Employment Recovery Agenda is the conduct of job summits.

Lopez said the agenda also involves pushing for the passage of legislative measures that would strengthen economic and employment recovery.

“The passage of priority legislation will reinvigorate the economy to ensure an environment where investment and entrepreneurship thrive and employment, by extension, is revitalized,” he said.

“The DTI is supportive of the passage of these bills as it would further boost the economy’s recovery, enhance the country’s competitiveness and provide new economic opportunities for Filipinos. These include amendments to the Public Service Act, the Retail Trade Liberalization Act and the Foreign Investments Act,” he pointed out.

He said the DTI is also calling on various government agencies to support local products in their procurement, particularly personal protective equipment.

He said there would also be retooling and upskilling programs by different agencies under the agenda to ensure a “future-ready” Filipino work force.

“These programs are expected to cater to more than 400,000 beneficiaries with total allocated funds of P11.1 billion,” he said.

Lopez said the agenda also covers the full implementation of youth employability programs with a budget of P1.759 billion to address youth unemployment and job-skill mismatch and benefit 85,159 individuals.

Low interest loans

In addition, he said the government would be extending assistance to establishments through low-interest loans, deferment of applicable fees with an allocation of P14.81 billion to assist 37,350 establishments and keep 140,633 jobs.

He said the government would also be providing social protection to vulnerable groups through livelihood programs amounting to P1.1 billion to benefit 112,541 families and 28,208 entrepreneurs.

Furthermore, he said, the government would continue to implement and monitor programs with high impact on employment, including the massive infrastructure program Build, Build, Build and the Balik Probinsya, Bagong Pag-Asa which encourages people to return to their home provinces.

“In sum, we have initially allocated P1.14 trillion for the convergence programs in the NERS 8-Point Employment Recovery Agenda under the 2021 General Appropriations Act. The same will be prioritized by implementing agencies in their 2022 budget proposals,” he said.

He said the agenda serves as a guide for the NERS Task Force for regaining opportunities that went to waste due to the pandemic.

“Moving forward, the government has instituted medium- and long-term plans that would focus on restarting economic activities, restoring business confidence, upgrading and retooling the workforce and facilitating labor market access,” he said.

At the summit, PCCI’s Yujuico reaffirmed the business sector’s support for government’s efforts to revive the economy battered by the pandemic.

Yujuico discussed how the prolonged lockdowns, compounded by unclear government communications and wait- and-see attitude, remain the major challenges that need to be addressed to attain economic recovery.

After more than a year of quarantine lockdowns, Yujuico cited the need for the government to provide clear policies for recovery as well step up its communication strategy to allow the business sector to move forward.

“(The) community quarantine restrictions that caused delays in logistics and disrupted supply chains, prevented free movement of people, goods and services, added operational costs and limited business operations and planning,” he said.

‘Unclear communications’

Yujuico said the frequent changing of community quarantine classification is “compounded by unclear government communications, sporadic changes in policy guidelines and inconsistent implementation of regulations and mobility controls.”

Nonetheless, Yujuico said the business groups will remain committed to partnering with the government to revive the economy even as they also appealed for more measures to ease doing business in the country.

“We the business sector will contribute to achieve our recovery…through inclusive and sustainable economic growth that is based on the principle of social justice, full employment and decent work,” he said, presenting the business sector agenda that he said was the product of consultations from April 5 to 23.

The PCCI president said business groups are open to dialogue with the government any time.

Joining discussions at the summit were Labor Secretary Silvestre Bello III, NEDA secretary general Karl Kendrick Chua, TESDA chairman Isidro Lapeña, Cabinet Secretary Karlo Alexei Nograles; Ndiame Diop, country representative of the World Bank; Khalid Hassan of the International Labour Organization; Kelly Bird of the Asian Development Bank and Rep. Raymond Democrito Mendoza of the Trade Union of the Philippines.

NEDA’s Chua said the government is implementing a three-pronged approach to help the economy recover from the effects of the long-drawn out lockdown.

The three are continued management of risks to restore business and consumer confidence, fiscal support for businesses suffering liquidity problems and struggling households, and the prioritization of vulnerable sectors in the ongoing vaccination program.

Citing the latest survey conducted by the World Bank on firms and households, Chua said that as of November last year, firms operating at full and partial capacity comprised 63 percent as against 45 percent in July.

One in every five firms were also found to have laid off workers or reduced the number of workers to survive the economic downturn.

Improvements, he said, continued in the following months until the renewed spike in the number of COVID-19 cases in March that forced the re-imposition of heightened quarantine.

“The perception of high risk prevails among consumers and businesses face low demand and high uncertainly,” he admitted, however.

On top of maintaining public health standards and strengthening of the health system, the government will ensure greater public access to affordable personal protective equipment and other medical supplies, he said.

Individuals who are susceptible to the disease will also be vaccinated first.

The government will also move to reduce uncertainties over health policy actions by using “transparent and credible data support to make important decisions.”

“In the IATF, all decisions on quarantine adjustments are supported by a cost-benefit analysis,” he said. IATF stands for Inter-Agency Task Force for the Management of Emerging Infectious Diseases.

He added that addressing the liquidity constraints of firms and individuals would be crucial.

The government will also develop more programs to facilitate the transition of firms and individuals to the new normal.

As of February, more Filipinos were jobless as indicated by the unemployment rate at 8.8 percent during the month from 8.7 percent in January, translating to 4.2 million Filipinos without work.

This was partly because of the growth in the labor force participation rate – Filipinos aged 15 years and above available for work – to 63.5 percent in February from 60.5 percent in January.

This was equivalent to around 47.3 million economically active Filipinos, whether already employed or looking for work.

This indicated that more Filipinos are now competing for fewer available positions as the prolonged lockdown continues to limit economic activity.

“I appreciate the efforts of the joint task force group on economic recovery and the National Employment Recovery Strategy TF for making this job summit possible despite the challenges posed by COVID-19 pandemic,” President Duterte said in his message at the virtual summit.

“I also hope that this event will inspire stronger cooperation among stakeholders so that we may provide our labor force with more opportunities for their improved welfare and development. May this summit be instrumental in making our workers an important catalyst for the revival of the economy,” Duterte said. – Christina Mendez, Czeriza Valencia