Senator Sherwin Gatchalian is moving for the early passage of remedial legislation providing for a business loan program to create more jobs in a bid to “curb unemployment.”
The senator suggested adoption of a subsidy program similar to the Paycheck Protection Program of the United States to prevent further lay-offs in the country as quarantine measures take a huge bite out of businesses’ bottom line.
Gatchalian, vice chairman of the Senate Committee on Economic Affairs, envisioned a Paycheck Protection Program as a loan program designed to provide incentive for small businesses to keep their workers on the payroll.
He proposed that business owners can get “full loan forgiveness” as an incentive as long as the funds are used for eligible expenses, adding that “this way, the company gets to retain its employees while maintaining its operations.”
“If we can include this in the Bayanihan 2, malaking bagay po ito sa ating mga employees, and also for our companies. Marami talagang kumpanya na nagda-downsize at sigurado akong mas marami pa ang mawawalan ng trabaho. Tiyak babalik din sila sa gobyerno, sa LGU [local government unit] o sa national government. Hindi na yan kakayanin ng gobyerno. Babalik at babalik sila sa gobyerno para humingi ng suporta,” Gatchalian said, adding that the Paycheck Protection Program-like subsidy will hit two birds with one stone as “you secure the tenure of employees and at the same time you generate the economic side.”
The senator noted that the government currently provides a wage subsidy of P5,000 to P8,000 to employees under the Small Business Wage Subsidy (SBWS) through the Social Security System (SSS). He added that “this scheme lets employers complete the application on behalf of their employees.” But the lawmaker pointed out that “this one-time subsidy does not provide long-term support to employees.”
He recalled that many Filipinos were laid off as companies downsize their operations to trim their losses as they weather through the economic impact of the Covid-19 pandemic. The Philippine Statistics Authority reported that 7.3 million Filipinos are unemployed as of April 2020, an all-time high unemployment rate.
In a news statement, Gatchalian warned of uncertain labor market recovery, citing the International Labour Organization’s (ILO) study that there was a 14-percent drop in global working hours during the second quarter of 2020, equivalent to the loss of 400 million full-time jobs, based on a 48-hour working week. The same study projects a decrease in working hours of 4.9 percent in the second half of the year which is equivalent to the loss of 140 million full-time jobs.
At the same time, Gatchalian reiterated his call to prioritize the preservation of jobs in the country. The senator said the government will need an estimated P301 billion to create direct and indirect jobs for those impacted by the Covid-19-induced economic crisis for the rest of the year.
“The government has been calling on Filipinos to help spur the economy by spending more and taking advantage of record-low interest rates. But how can Juan dela Cruz think of spending his hard-earned cash during this crisis when he isn’t sure whether he’d be able to keep his job the following day. That’s why I implore the government to prioritize the preservation of jobs of our kababayans so that they’ll be able to contribute in reviving our economy back,” Gatchalian said.