Gov’t rolls out MSME workers’ wage subsidy

The government has started accepting applications from struggling micro, small and medium enterprises (MSMEs) that wanted to avail themselves of the small business wage subsidy for their temporarily displaced workers.

In a statement on Friday, 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—would benefit 85 of every 100 Filipino families while they are locked down to contain the COVID-19 pandemic.

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.

“Both these subsidy programs will be for a period of two months, as President Duterte gives No. 1 priority during this global health crisis to saving lives and extending lifelines to the sectors most affected by the sudden stop of economic activity when the national and local governments imposed containment measures in a bid to prevent the quick spread of COVID-19,” Finance Secretary Carlos G. Dominguez III said.

For the P5,000-P8,000 per month small business wage subsidy to be given away for two months, applications among prequalified MSMEs are ongoing starting April 16 until April 30.

“Through this wage subsidy, we are now helping their employees, mostly from the lower middle class, meet their basic needs like food and medicine. Second, and just as important, we are helping these employees keep their jobs. The small business wage subsidy is an integral part of a support package that we are rolling out for small businesses,” Dominguez said.

“The DOF estimates that some 393,095 small businesses were forced to stop operating while some one million are only able to operate with [skeleton] forces after the national government placed Metro Manila and, later, the rest of Luzon, under enhanced community quarantine and local government units have imposed similar containment measures in their respective localities,” Dominguez said.

“Only around 161,102 essential small businesses such as those involved in food service, logistics and some retail outlets like drugstores and supermarkets, have been allowed to operate during the enhanced community quarantine,” Dominguez added.

Qualified to avail themselves of the wage subsidy are those who were still employed as of March 1 and of any contract status but unable to work during the enhanced community quarantine, and those unpaid for a least two weeks when their employers suspended work.

Ineligible for the cash grants are those working from home or part of skeleton workforce with or without pay; as well as those who had availed themselves of the unemployment benefit from the state-run pension fund Social Security System (SSS).

Also, beneficiaries of the Department of Labor and Employment’s COVID-19 adjustment measures program will be granted only a one-month wage subsidy.

MSME owners will apply on behalf of their qualified workers, but they should first check with 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 prioritized are small businesses registered at both the BIR and the SSS that paid all tax obligations (corporate and workers’ withholding income taxes) as well as remitted employee contributions during the last three years until January 2020.

“Distribution of the first tranche of subsidies will be from May 1 to May 15. The second tranche will be given from May 16 to 31, which is dependent on whether the enhanced community quarantine is lifted at an earlier date or is extended by the President,” Dominguez said.

The eligible employee have several options to be able to receive the subsidies, Dominguez added.