Industry leaders on Tuesday appealed to the government to increase the budget for recovery of micro, small and medium enterprises (MSMEs), as the enhanced community quarantine placed on Luzon is seen to injure their operations, or worse, result in bankruptcy.
Philippine Exporters Confederation Inc. President Sergio R. Ortiz-Luis Jr. said the P1 billion allocation for the Department of Trade and Industry (DTI) intended for MSME recovery is just too little, too small. He estimated such amount can only help around 20,000 small firms, and would not even be able help them recuperate their losses.
As such, he suggested that 10 percent of the government’s roughly P109-billion conditional cash transfer for the poor be redirected to the recovery program of MSMEs affected by the Luzon-wide quarantine placed in Luzon.
“To be meaningful, I think you have to get at least 10 percent from the CCT funds,” Ortiz-Luis told the BusinessMirror. “If you get 10 percent and allocate for MSMEs because many of them might not be able to survive the lockdown, that could be enough to support them.”
“Giving money to the poor will not change their lifestyle, so might as well use the CCT funds for subsidy of MSMEs during times of crisis,” he added.
The government on Monday announced it is releasing a P27.1- billion stimulus package that will bankroll programs and projects to fight the effects of the coronavirus disease (Covid-19) outbreak in the Philippines. Of the war chest, the DTI received the least amount at P1 billion was earmarked its microfinancing program for affected MSMEs.
“The crisis only lessens the revenue and increases the business cost of all firms. As such, it’s important that they, especially the MSMEs, receive some form of assistance from the government to be able to bounce back from this tragedy,” Ortiz-Luis argued.
George T. Barcelon, director of the Philippine Chamber of Commerce and Industry, agreed with Ortiz-Luis, saying P1 billion is too small to put MSMEs back on track.
For him, it’s more than just financial support, it should be policy. He called on the government, therefore, to appeal to banking institutions to extend the payment deadline for loans availed of by small firms.
This way, Barcelon sees MSMEs obtaining the much-needed financial space to rebound from the impact of the Covid-19 pandemic without having to think about paying their dues for the meantime.
MSMEs are reeling from the impact of the enhanced community quarantine placed by President Duterte in the entire island of Luzon. The virtual lockdown has not only suspended school and work in many sectors, but public transportation as well in the state’s bid to arrest the spread of the virus in the Philippines.
In 2017, the Philippine Statistics Authority reported there are a total of 924,721 business establishments in the Philippines, of which 99.56 percent, or 920,677, are MSMEs. They generated 4.92 million jobs that year as against the 2.9 million created by large enterprises.
Image credits: Nonie Reyes