Battered MSMEs need well-defined assistance program

BIZLINKS - Rey Gamboa (The Philippine Star) - May 11, 2021 - 12:00am

Last year, while under lockdown, many of our small entrepreneurs had the rug pulled from under their feet. Even if most were digitally savvy, continuing to operate a workplace under the threat of a novel coronavirus infection seemed too risky.

Many of them retreated, shutting down operations, laying off workers, and terminating rentals of commercial spaces. Some managed to cut losses with enough firepower to restart the business when things got better; others were less fortunate as the months under lockdown wiped away saved earnings.

After a year in limbo, “survivor” entrepreneurs who managed to set aside restart-up funds are raring to reopen or start a new business suitable to the new normal. The erratic surges in infection and the corresponding clampdown on business operations, however, have become disincentives.

Still, move forward they must.

One of the biggest factors in operating a business under still-pandemic conditions is the necessity of continually requiring workers or employees to go for testing in order to ensure that the workplace is virus-free. Unless an employee manifests signs of illness, testing is a cost that is not shouldered by PhilHealth.

The bigger concern, however, is that testing does not ensure COVID-19 has not already infested the workplace since symptoms become apparent only after a week or so, at which time others in the office or shop floor may already have become infected.

‘COVID is no joke’

“COVID is no joke,” said one small business owner whose whole family recently contracted the virus despite precautions for workers to wear masks, observe social distancing, and wash hands regularly. Letting workers report to work in his home-cum-workplace exposed the household that had diligently observed precautionary measures for over a year.

Work at his garden company had to be discontinued for close to a month while family members struggled to recuperate from the coughing, breathing difficulties, headaches, and other symptoms. Luckily, no one had to be hospitalized, although all reporting workers had to go through isolation to ensure that the infection would not spread further.

Reopening the business after a month had not been too difficult, although there were losses from the work stoppage. Somehow, he said, he survived better than others who could not resume business because they were in the most vulnerable businesses like travel agencies and health spas.

An infection in the workplace, especially for micro and small businesses, cannot be taken lightly because it can result in losses too difficult to surmount. The cost of paying for workers’ daily wages while forced in isolation can be a financial burden when income streams are temporarily halted.

It is even worse for workers whose sick leaves have been used up by forced calls to go into isolation and have had to resort to going on leave without pay. Some have had to contend with reduced pay slips when the company instituted work schedule rotations; a COVID-induced work stoppage only aggravates their earning capabilities.

Labor Day ‘show’

In time for Labor Day, the Department of Trade and Industry (DTI) “unveiled” a plan for an employment recovery strategy, one that had actually been in the news a few weeks before. What was highlighted in the announcement was a proposed P24-billion wage subsidy for about a million private sector wage earners in small businesses affected by the pandemic.

Layoffs and reduced work hours have been most prevalent in MSMEs that accounted for 62.4 percent of the labor force pre-pandemic. The carnage that started from a year ago as small and medium-sized businesses enforced labor cost cutting measures has resulted in the current high joblessness data.

Close to 10 million Filipinos had been thrown out of work from March 2020 to March 2021, although this had significantly been whittled down as the government allowed a gradual reopening of the economy since two months ago.

According to DTI, the proposed P24-billion wage subsidy program will give workers in MSMEs an P8,000 monthly wage subsidy for a maximum of three months. More details are expected to emerge as Congress starts to debate on the proposal.

The aid, though, comes too late for the many businesses that are no longer operating, and it covers too few of the workers that have suffered from reduced pay for more than one year during this pandemic.

Trade and Industry Secretary Ramon Lopez has underscored government’s commitment over the last year to help MSMEs to recover, but more concrete action that will allow businesses to operate safely seem lacking. This can be reflected in the spike in cases we are now experiencing when the government allowed businesses to reopen last March.

Thus, even programs like the COVID-19 Assistance to Restart Enterprises (CARES) program and interventions to encourage affected MSMEs to strengthen their shift to adopting digital tools are negated by the recurring infections.

The better way

The government has dismally failed to correctly “read” the pandemic situation when it dilly-dallied on the role that vaccinations will play, something that other countries had earlier embraced and are now using to start reopening their respective economies.

I view with envy European countries and the United States, which are now allowing businesses to restart operations, and are even talking about holding sports events that will be open to the general public. Mass vaccination, even with all the hesitancy and criticisms, is turning out to be the better way.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

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