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Solon proposes P90-billion wage subsidies

‘The economy is reopening, vaccination rates are near targets, people are learning to live with the virus. Recovery is at hand. You want recovery plus, because the pandemic also took more out of our economy than a regular downturn would’

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To boost aggregate demand as economy reopens, an economist-lawmaker has called for P90 billion in wage subsidies and temporary employment programs.

Albay Rep. Joey Salceda proposed a three-pronged P90 billion employment program composed of P30 billion for reemploying furloughed workers, P30 billion for a micro, small and medium enterprise (MSME) worker retention subsidy, and another P30 billion for a recalibrate Tulong Panghanapbuhay sa Ating Displaced Workers (TUPAD).

“The deficit is likely to be 200 billion less than programmed, so there will be fiscal space,” Salceda said in a recent statement.

“The rehiring subsidies can be for businesses of all sizes, so they can rehire furloughed, irregular, or retrenched workers. The MSME wage subsidies will be to help small businesses,” he added.

He suggested that the TUPAD program will be distributed as follows: P5 billion for rice farmers, P10 billion for non-rice farmers, P5 billion for fisherfolk and forestry, P5 billion for the tourism sector, and P5 billion for barangay development programs.

“The tourism programs will be in partnership with the DoT (Department of Tourism). The hospitality sector is experiencing something like a ‘revenge tourism’ phenomenon. All deferred travel is being taken now,” Salceda said.

“So they can serve as tour guides, tourism site maintenance, tourist assistants and others. Priority should be given to those who were not recipients of previous TUPAD legs,” he added.

Salceda pointed out that “now may be the most strategic time to launch big stimulus and employment programs to boost aggregate demand.”

“The economy is reopening, vaccination rates are near targets, people are learning to live with the virus. Recovery is at hand. You want recovery plus, because the pandemic also took more out of our economy than a regular downturn would,” he said.

Salceda added that TUPAD workers could also complement the public works program.

“You could see less than usual public infrastructure spending and completion due to hiring restrictions under Comelec (Commission on Elections) rules. You would want to make up for it with employment programs for barangay-level works,” he said.

“Momentum is on our side. A boost will go a much longer way now than it would have done during the restrictions. Recovery is no time for incrementalism. You want a big boost,” he added.

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