The government has started accepting applications from struggling micro, small and medium enterprises (MSMEs) that wanted to receive small business wage subsidies for their workers kept from reporting for duty by COVID-19 community quarantine.
In a statement on Friday (April 17), the Department of Finance (DOF) said that a total of P256 billion in subsidies—P205 billion for poor families and P51 billion for MSME workers—will benefit 85 of every 100 Filipino families while they are locked down to prevent coronavirus transmission.
These subsidies covered 18 million poor households that gain livelihood in the informal sector, on top of 3.4 million individuals formally employed by MSMEs.
Finance Secretary Carlos G. Dominguez III said the subsidy programs would last for two months.
President Rodrigo Duterte’s priorities during the lockdown, according to Dominguez, were to save lives and help “sectors most affected by the sudden stop of economic activity.”
Applications for the P5,000 to P8,000 wage subsidy has been ongoing from April 16 until April 30 for prequalified MSMEs.
Through the wage subsidy, the government hoped to help MSME workers, “mostly from the lower middle class, meet their basic needs like food and medicine,” Dominguez said.
“Second, and just as important, we are helping these employees keep their jobs,” he added.
“The small business wage subsidy is an integral part of a support package that we are rolling out for small businesses,” Dominguez told a television interview on Thursday (April 16) night.
The DOF, he said, estimated that at least 393,095 small businesses stopped operating while at least 1 million others “are only able to operate with skeletal forces” because of the enhanced community quarantine in the entire Luzon and lockdowns in other places.
He said at least 161,102 small businesses, many involved in food service, logistics and retail like drug stores and supermarkets, were allowed to operate during the lockdown.
Workers qualified for the wage subsidies are those employed as of March 1 and those with job contracts but unable to report for duty because of the lockdown. Also qualified were workers unpaid for two weeks when their employers suspended operations.
Not qualified, though, are employees working from home or those part of skeletal workforces. Also those who had already received unemployment benefits from Social Security System are not qualified. Those who had benefited from the Department of Labor and Employment’s cash assistance program are qualified for only one month wage subsidy.
MSME owners will apply on behalf of their qualified workers, but they should first check on the Bureau of Internal Revenue’s (BIR) website if their businesses fall under the eligible types of sole proprietorship, partnership or corporation.
If qualified, MSMEs will be given a passcode on the BIR website, which they in turn will use to apply on the SSS website, where the step-by-step procedures are already posted.
To be given priority are small businesses registered with the SSS and BIR which have no unpaid taxes or SSS contributions.
Dominguez said tapping the SSS and BIR systems for the wage subsidy program has allowed the government “to better target and identify affected small businesses and their employees.”
It has also helped “more efficiently deliver the subsidy in the future should the quarantine be extended,” Dominguez said.
The first tranche of subsidies would be distributed from May 1 to 15. The second tranche will be released from May 16 to 31.
The actual fund distribution, however, would be dependent “on whether the enhanced community quarantine is lifted at an earlier date or is extended by the President,” Dominguez said.
Beneficiaries are to get their subsidies through the SSS’s unified multipurpose identification cards (Umid), over-the-counter withdrawals at the employee’s bank, Union Bank Quick Card in partnership with SSS, employee’s e-wallet in PayMaya and cash pick-up arrangements through remittance outlets, Dominguez said.