A P53-billion subsidy fund scheme for some 5.98 million workers, small and medium enterprises, sole entrepreneurs and freelancers who belong to the middle class category affected by the extended Luzon enhanced community quarantine (ECQ) should be considered by the government.
In a recent letter to President Duterte, Albay Rep. Joey Salceda (2nd District) proposed the Payroll Support for Workers, Entrepreneurs, and Self-employed (PSWES) Program that can be distributed for three months.
“Development gains in this area may waver unless social protection mechanisms are in place to prevent those who have breached poverty and have joined the middle class from falling back under the poverty line,” Salceda pointed out.
“As the middle class mostly falls within the seventh to ninth income deciles, it is likely their households are either mostly or entirely outside the coverage of the government’s Social Amelioration Program.”
Salceda recommended to the President that “we begin calibrating a wage subsidy program for small and medium enterprises, as well as for those in the gig economy.”
“We will need these enterprises to operate, so it’s essential for the economy and for job preservation, that we lend them a helping hand. A payroll support program will likely be necessary to support micro, small, and medium enterprises that will face liquidity issues in the wake of the ECQ, as well as their workers, who may be terminated,” wrote Salceda.
Apart from supporting business, the program will also be able to provide relief to formal economy workers, entrepreneurs, and the self-employed who typically belong to the middle class.
Based on the Bureau of Internal Revenue (BIR) data on small taxpayers, the country’s MSMEs employ around 4.1 million formal economy workers while some 380,000 entrepreneurs are classified as sole proprietors.
On the other hand, the 2018 Global Freelancer Insights Report says that about 1.5 million Filipinos are freelancers. Together, members of these sectors have a combined workforce of 5.98 million workers.
“The average monthly minimum wage is placed at around P9,500 per month. We propose a wage subsidy that covers around a quarter to a third of this amount. The cost of supporting their income, at P3000 per month for three months, is P53.82 billion pesos. ” Salceda said.
Salceda suggested that the aid be distributed via the Social Security System, assisted by the BIR and the Department of Labor and Employment for the formal economy workers. For freelancers, the lawmaker proposed an open-application window similar to the Covid Adjustment Measures Program (CAMP) of DOLE.
A noted economist, Salceda co-chairs the House Stimulus Cluster, the panel tasked with drafting a proposed economic stimulus plan for the country’s transitioning out of and recovering from Covid-19.