The Covid-19 pandemic, undoubtedly, is a historical and global turning point. The term “new normal,” in fact, is a telling indicator of just how much has changed. For the pandemic affects not only a person’s health, but also his or her ability to work, travel, interact in public spaces, and become a productive citizen.
And this is why our economy is taking a big hit, resulting in some very disconcerting numbers for the second quarter of the year. Consumer spending went down by 15.5 percent. Household consumption fell by 10.7 percent. And as of April, the unemployment rate was at 17.7 percent—translating to about 7.3 million people jobless. All these contributed to why our economy shrank by 16.5 percent, putting us technically into a recession.
This is why the Bayanihan to Recover As One Act, or Bayanihan 2—which the House and the Senate recently passed—has several provisions aimed at providing aid in various ways to both consumers and businesses, in a bid to keep the economy going.
When it comes to paying bills and loans, Bayanihan 2 provides for a one time 60-day grace period for the payment of all loans that are due on or before December 31, 2020. Utility providers for water, electricity, telecommunications, and other similar services will also be directed to provide a 30-day grace period for bills that fall within the period of enhance community quarantine or modified enhanced community quarantine, with a similar provision for the payment of residential and commercial rent payments of lessees who are not permitted to work within the community quarantine period. Deadlines for the filing and submission of documents, tax payments and other fees required by law will also be moved.
Meanwhile, the net operating loss of businesses for the taxable years of 2020 and 2021 will be carried over as deductible from gross income for the next five taxable years. Finally, retirement benefits that officials and employees in private firms will receive from June 5 to December 31 of this year will be exempt from taxation.
All these grace periods and specific exclusions are to support both businesses and employees, as the necessary suspension of business activities during the quarantine has made it hard for business owners and their staff to settle obligations.
Other provisions in Bayanihan 2 are forward-looking in terms of helping businesses recover. Under the approved measure, government financial institutions will receive about P55 billion to provide low-interest loans to sectors badly affected by the pandemic. P10 billion of this will serve as additional funding for the Small Business Corp. for its Covid-19 Assistance to Restart Enterprises program for providing low-interest loans to micro and small enterprises, tourism businesses, cooperatives, hospitals, and even displaced overseas Filipino workers. This will support an estimated 100,000 enterprises and 200,000 workers in all. On the other hand, Landbank will receive about P18.5 billion, also for low-interest loans, while the Development Bank of the Philippines will get P6 billion. The Philippine Guarantee Corp. will also receive P5 billion to bolster its credit guarantee program. All these institutions will have standby funds, in case more is needed.
These are just some of the interventions encompassed in Bayanihan 2 for keeping our economy afloat, both in the short and long terms. Hopefully, President Duterte signs the measure soon, so that both our enterprises and our workers are able to adjust to the new normal, and get our economy running again.
Senator Sonny Angara has been in public service for 16 years—nine years as Representative of the Lone District of Aurora, and seven as Senator. He has authored and sponsored more than 200 laws. He is currently serving his second term in the Senate.
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