DOF: Government mulling aid for MSMEs

MANILA, Philippines — With the Luzon-wide lockdown extended by two more weeks, the government is now also considering providing assistance to micro, small and medium enterprises (MSMEs) to keep them from shutting down their businesses and laying off employees mostly from the lower middle class.

In a statement, Finance Secretary Carlos Dominguez III yesterday said the government will reallocate some funds for the purpose.

His announcement came just hours after President Duterte asked him in a televised address to do anything – including to steal or borrow money – just to make sure the government has the funds to implement its budget for the poor.

Dominguez said support will come in the form of subsidy to fund the salaries of workers employed by the MSMEs.

He said reallocated funds would also be used to provide assistance to local government units (LGUs) and support the Department of Agriculture and the Department of Trade and Industry (DTI) in enhancing food production and availability.

Budget Secretary Wendel Avisado said the assistance to LGUs, called the Bayanihan Grant to Cities and Municipalities, is set to be released tomorrow. He said the amount would be equivalent to the one-month internal revenue allotment (IRA) of LGUs amounting to P30.82 billion.

Aside from the planned subsidies, Dominguez said there are measures set in place by the government to ease the impact of the health crisis on the middle class.

He said the Bangko Sentral ng Pilipinas (BSP), for one, has imposed a moratorium on the payment of loan and credit card amortizations, and prohibited the charging of compounded interest and penalties during this period.

“In addition, the Monetary Board had provided liquidity for the economy and lowered interest rates,” the finance chief said. “These measures favor all sectors of society, especially those some people call the middle class.”

Under Republic Act 11469 or the Bayanihan to Heal as One Act, President Duterte has been given the authority to use and allocate cash, funds, investments and unutilized subsidies held by government-owned and controlled corporations or any national government agency outside the Treasury Single Account (TSA) for easing the impact of community quarantine enforced to contain the spread of coronavirus disease 2019 (COVID-19).

It also allows the President to realign the 2020 budget in order to meet the requirements needed to address the COVID-19 crisis.

But the finance secretary admitted funds are limited, emphasizing the need to gather resources.

“The President’s fiscal policies since the start of his administration, of vastly improving our revenue flows as well as being very judicious with expenditures and investments, have placed us in a good position to meet the financial challenge posed by COVID-19,” Dominguez said.

“We must realize, however, that we do not know how long this contagion will last and that our funds are not inexhaustible. We must therefore prudently marshal our resources and prepare for all eventualities,” he added.

Earlier, Dominguez said the government is prepared to increase its borrowings in order to sustain its expenditure program, while at the same time funding measures that will help cushion the impact of the pandemic.

Malacañang admitted finding funds for programs designed to help sectors affected by the Luzon-wide quarantine and improve the country’s health system is “very, very challenging.”

A “desperate” President Duterte, in his televised address, has ordered the finance department to look for funds to support his aid package for poor families and displaced workers, admitting that the P275 billion allotted for the program may not be enough for two months. He described the raging health crisis as “worse than war.”

Cabinet Secretary Karlo Nograles said economic managers are studying possible revenue sources to provide the needs of the public, especially low-income families and workers sidelined by the quarantine.

“The challenge to our economic team is to source the money needed. We need to raise funds because we are under an enhanced community quarantine,” Nograles said at a press briefing. 

“It’s really very challenging since we need to help a lot of people in terms of our social amelioration; number two, of course, we need to enhance our health capacity and then we have to provide the needs of our hospitals and our frontliners,” he added.

Duterte’s first weekly report on the COVID-19 crisis submitted to Congress showed that the government can tap more than P800 billion from budgets of agencies, unreleased funds, dividends and a repurchase deal with the central bank for its fight against the disease.

The national treasury has certified a total of P101.642 billion available as of March 31 to fund the social amelioration measures of the government. Several government-owned and controlled corporations have also made early remittances of dividends to the national government, the report said. – Alexis Romero