Keeping local businesses alive

When I saw the email in my inbox last week, I was struck by the amount – P2.5 billion for a stimulus package for Makati businesses. It was a press release from the city government.

As I’ve been calling support for local businesses, the statement caught my attention. I opened it. It’s true and it’s not a loan.

Props to Mayor Abby Binay and the city council for implementing the measure.

As announced, the country’s premier financial district is set to implement a P2.5 Billion Makati Assistance and Support for Business Program, which would help Makati-based businesses get a grant of up to P100,000 depending on the number of Makati residents they employ.

The target is to help some 78,000 businesses registered in the city.

What really struck me is that it is not a loan.

“Hindi po ito utang. Tulong ito sa mga negosyante ng Makati,” Mayor Abby said, adding that the program seeks to pump prime the local economy following reports of businesses closing down and jobs being lost.

A business enterprise survey released by the Asian Development Bank in July pointed to cash shortage as the biggest problem of entrepreneurs. A third of the 2,000 respondents said they had run out of funds within the first month of quarantine. Another  30 percent were expected to stay open for only two to three more months, and 20 percent to completely run out of money in six months.

The Department of Labor estimates that some 10 million Filipinos will lose their jobs this year.

I hope businesses take advantage of Makati’s assistance program well and use it for the right purposes.

The program’s requirements are simple, the mayor said.

“For the next two years, these businesses must continue to operate. They should not lay off their Makatizen employees and they should strictly comply with the city’s ordinances and safety guidelines.”

To ensure that the money goes to where it is needed, the drawdowns from the program would be remitted directly to the account of their employees or their Makati-registered suppliers, Mayor Abby added.

Makati was the first to go cashless in providing subsidies to its citizens.

Amid the surge of online businesses, Mayor Abby also encouraged the 100 percent registration of Internet-based businesses in the city. She said the City Council has an ordinance that sets the lowest local business tax rate for online sellers who do not have physical stores.

To also help encourage residents to patronize restaurants and other business establishments in the city, Mayor Abby put in place a travel window to allow citizens of Makati to return to their places of residence.

The residents just need to show a machine-generated official receipt showing that from 9 to 10 p.m. they were at the indicated establishment in Makati. “This applies to Makati residents and within city limits only,” she said.

Moving forward, the mayor said she would continue to look for more innovative ways to help the local economy recover.

“Our ultimate goal is to save businesses, retain jobs, and keep our city’s entrepreneurial spirit,” she said.

Quezon City

I heard Quezon City has a similar initiative although I don’t have the details yet. The target is to provide financial assistance to micro-enterprises.

I hope all our local governments would have a stimulus program for affected businesses in their localities. This is urgent because businesses, big and small alike, really need all the help they can get.

Stiffer penalties for smuggling

As some businesses struggle to survive, smugglers in the country continue to have a heyday.

This is one of the biggest headaches of Japan Tobacco Philippines’s new head general manager John Freda.

Freda, who has just assumed office in early January, said despite the back-to-back raids and seizures by crack teams from the Bureau of Customs, the Bureau of Internal Revenue and law enforcement agencies, the smuggling syndicates are still in business.

Not even a P50 million minimum cash fine and a possible jail time of eight to 12 years as provided by laws have deterred illicit traders from plying their trade.

“Illegal tobacco makers are directly stealing from the state. As legitimate businesses, we are a very effective tax collector and clearly we can’t do that if there is an illicit problem. Illegal trade cheats everyone: governments, consumers and legitimate businesses,” Freda said.

He hopes there will be stiffer sanctions.

“We need to see people being caught and brought to justice in a way that deters others from being part of this criminal endeavor,” Freda said.

The illegal tobacco trade is, indeed, a feast for criminals. They make huge profits and are undeterred by insignificant penalties.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com