AS the government eases lockdowns and more businesses reopen, the umbrella organization of Philippine exporters is pushing for the immediate passage of measures that will help micro, small and medium enterprises (MSMEs) recover from the impact of the coronavirus disease 2019 (Covid-19) and adapt to the new normal.
The Philippine Exporters Confederation Inc. (Philexport) has developed the New Normal Export and MSME Roadmap urging also the speedy implementation of programs and policies that can help these enterprises to reopen gradually from the crisis until reaching their full capacity, sustain their operations, and create jobs.
The road map, anchored on three pillars called Recovery, Resilience and Resurgence (3Rs), was launched at the 3-part Philexport 2nd Quarter General Membership Meeting on June 9. It cited as one important intervention the need for the full implementation of the Philippine Economic Stimulus Act of 2020 and the New Normal Act with amendments from the private sector. Pesa has evolved to be the Accelerated Recovery and Investments Stimulus for the Economy (ARISE) Act.
The House of Representatives has approved the P1.3-trillion ARISE economic stimulus package that shall provide allocations for interest-free loans, as well as provision of education, training, and guidance, to pandemic-hit MSMEs.
The MSME sector, comprising about 99 percent of all industries in the country, has been identified among the three hardest hit sectors of the Covid-19 pandemic, aside from tourism and transportation.
The Philexport also pushed for the passage of the Corporate Income Tax and Incentives Reform Act by reducing corporate income tax (CIT) immediately to 25 percent to help attract investors and increase cash flow particularly for MSMEs. Citira is now CREATE, or Corporate Recovery and Tax Incentives for Enterprises Act. “Insulate exporters from the growing risks of globalization by removing [the] disincentive of sell to [the] domestic market. Remove the export threshold in the proposed Citira bill, especially in this crisis where exports is in an extra difficult challenge and regime,” its New Normal Export Roadmap states.
The exporters’ group likewise underscored the need to revive a pending bill and pass the Customs Amnesty Act which can be one major source of government revenues much needed to fund crisis recovery programs and projects. To help pandemic-affected MSMEs, it cited the importance of fully rolling out the P1-billion Covid-19 Assistance to Restart Enterprises (CARES) program of SB Corporation, in collaboration with Department of Trade and Industry (DTI) Negosyo Centers and possibly industry associations to help ensure that loan applications are compliant.
The group also pushed for the provision of an export promotion budget as a subsidy for all exporters for at least one year. “Increase DTI budget by at least 100 percent every year, with 75 percent of which to serve as [an] annual subsidy for export promotion and marketing,” the New Normal Export Roadmap added.
As business opportunities emerge under pandemic outbreak, Philexport said it is imperative to assist companies to repurpose their facilities to help boost the production of Covid-19 essentials, and support others in the shift to more viable business options.
It, likewise, pushed for the continuing conduct of market and product research on emerging trends and new business models that evolved from this crisis.
“Countries that are heavily affected by the increasing Covid-19 cases have to rely on imports to feed their people who are locked in their homes, a boost to current export uncertainties,” it said.
Philexport President Sergio Ortiz-Luis Jr. said the road map aims to control the epidemic, restart and expand economic activities, and finally transition exports and MSMEs to the digital economy. “While development plans remain valid, there is [a] need to transition from this stage of the crisis toward recovery, resilience and resurgence leading to the targets spelled out in these development plans, including the Philippine Export Development Plan,” he said.
Image credits: Nonoy Lacza