House panel proposes P613 billion economic recovery stimulus

MANILA, Philippines — A House panel has proposed a P613-billion stimulus measure to help the government address the economic impact of the coronavirus disease 2019 (COVID-19) crisis.

Members of the sub-committee on economic stimulus package came up with the Philippine Economic Recovery Bill, which consolidated the proposals submitted by Marikina Rep. Stella Quimbo and Albay Rep. Joey Salceda after two online hearings of the panel members on April 14 and 21.

The proposed measure, titled Philippine Economic Recovery Act (PERA), will be submitted to the Defeat COVID-19 Committee for approval and referral to the plenary.

Under the PERA bill, P110 billion will be allocated to a wage subsidy program for workers of private companies affected by the crisis, particularly by the enhanced community quarantine (ECQ).

Through the Department of Labor and Employment, the program would cover payroll costs of non-essential companies severely affected by the quarantine period through wage subsidies ranging from 25 percent to 75 percent.

The measure also seeks a P1-billion fund to subsidize salaries of patients who are temporarily displaced from their work while battling the disease, through allocations of P500 million each to the Social Security System and Government Service Insurance System.

The panel proposed that a patient will get P110,000 each in excess of paid sick leaves during confinement or isolation.

The bulk of the proposed economic stimulus package will go to zero interest loans for companies, including micro, small and medium enterprises (MSMEs).

Some P383 billion or 63 percent of the PERA budget will be allotted for this loan program to be implemented by the Land Bank of the Philippines and Development Bank of the Philippines.

Companies could avail of a maximum loan amount equivalent to 50 percent of their labor costs payable in three to five years.

For sectoral assistance, P25 billion will be allocated to low-interest loans for MSMEs while P10 billion will be granted to agri-fishery enterprises.

The proposed PERA will likewise offer loans, incentives and grants to companies in the tourism sector through a budget of P43 billion.

“The objective is to ensure continuity of businesses and keep workers in their companies as well as their salaries,” Quimbo explained.

Deputy Speaker Mikee Romero called for the speedy passage of the measure that he said would mitigate the impact of the crisis on the country’s economy.

“We are expecting over P1 trillion in revenue losses due to the ECQ and this could even increase in the following months as we adapt to the new normal. We have to support businesses and help them cope with the impact of the crisis at the soonest possible time,” Romero stressed.

Speaker Alan Peter Cayetano said the House plenary is expected to deliberate and vote on the bill upon resumption of session on May 4.

Won’t drop Build, Build, Build

Presidential spokesman Harry Roque said the government won’t drop its infrastructure program even if it needs huge sums to buy medical supplies and to help sectors sidelined by the Luzon-wide lockdown.?Roque said the program is needed to revive the Philippine economy, which has taken a hit from COVID-19.?“We can’t drop the ‘Build, Build, Build’ because it is part of our strategy to recover (from the health crisis). The same strategy enabled us to achieve 6.5-plus average growth every year for the past almost four years,” Roque told radio dzMM last Tuesday. ?President Duterte placed Luzon, home to about 57 million people, under quarantine to contain SARS-CoV-2, the virus which has infected more than 6,000 people in the country.

The quarantine, which started last March 17 and is expected to end on April 30, barred public transportation, sidelining thousands of workers and forcing several businesses to temporarily close shop.

The slowdown in business activity placed more pressure on the government to seek funds for aid programs for low-income households and workers affected by the lockdown.?The Bayanihan Act, which was passed by Congress to strengthen the government’s response to COVID-19, allows Duterte to realign funds to support programs related to the health crisis.

Duterte has unveiled a P200-billion social aid package for affected sectors but admitted that the amount may not be enough if the pandemic drags on.?Roque said only a small portion of Build, Build, Build funds has been allotted for crisis mitigation. The public works department previously said about P30 billion from infrastructure projects has been reallocated to support the government campaign against COVID-19.?Meanwhile, Sen. Imee Marcos urged the government to expand payroll aid beyond its Small Business Wage Subsidy (SBWS) program to prevent MSMEs from laying off workers or folding up altogether if the quarantine is extended.

Marcos said the present P51-billion SBWS budget leaves some 4.6 million workers in MSMEs vulnerable to job losses, especially in sectors hit hard by the lockdown, such as transportation, hotel and food, manufacturing and construction.

To cover them all, the government will need almost P63 billion in the first month alone, Marcos said, if subsidies are computed at 75 percent of the average monthly wage, pegged at P18,108 in the last Occupational Wages Survey in 2018.

Marcos, who chairs the Senate committee on economic affairs, estimates that up to three-fourths of MSME payroll should be subsidized by government while community quarantine restrictions remain in place.

The Department of Finance has reported that more than 436,000 small businesses have closed shop since mid-March when a lockdown was imposed throughout Luzon and in some areas in the Visayas and Mindanao.

“The true engines of the economy are the daily wage earners and rank-and-file employees. Greater payroll subsidies mean giving MSMEs a greater chance of survival,” Marcos said.

Besides the 75-percent payroll subsidy laid out in Senate Bill 1431, dubbed the Economic Recovery Act of 2020, Marcos also proposed that zero-tariff rates be temporarily applied on imports of essential raw materials to help cut company costs and stabilize the prices of goods. -With Alexis Romero, Cecille Suerte Felipe