It’s Day 71 of the Luzon-wide lockdown and there is no assurance the government would lift it by the end of the month.
The country’s labor sector is now on pins and needles about its future.
There is reason for that pessimism because the contraction of the economy, with its adverse financial consequences, is a foregone conclusion.
It’s just a matter of figuring out whether it will be a one-digit or two-digit dip, and no amount of optimistic forecast from the economic managers can ease the apprehension over that gloomy scenario.
With the anticipated enforcement of social distancing and other preventive health regulations, businesses that would be adversely affected by those measures may have to drastically downsize, or worse, cease operations.
Labor Secretary Silvestre Bello III said in a recent Senate hearing some five to 10 million workers in the Philippines could be rendered jobless due to the crisis brought about by the new coronovirus disease (COVID-19) and the consequent lockdown to stem its spread.
Besides, 250,000 or more overseas Filipino workers (OFWs) who have been adversely affected by the global health crisis may have to return to the country.
Bello also said some 500,000 repatriated OFWs had already applied for his department’s one-time P10,000-financial assistance. This number is expected to rise when more OFWs are repatriated.
Left out of the employment equation is the fact that, by the end of this month, thousands of Filipinos would graduate from the country’s 2,300 colleges and universities.
Except for a handful who would join the family business or take up further studies, the majority of the new graduates are expected to immediately look for gainful employment.
They would be competing with displaced workers and returning OFWs in the businesses that may survive COVID-19’s debilitating impact on the economy.That huge army of unemployed Filipinos presents a serious social problem that must be quickly addressed by the government.
Palliative solutions, e.g. special financial assistance and occasional supply of basic necessities, have limited effect. They cannot be sustained for a long period of time because of the government’s limited resources.With the government already hard-pressed providing financial assistance to the country’s “poorest of the poor,” expanding that effort to cover unemployed Filipinos would be wishful thinking. There is no way can it be done without bankrupting the government.
The solution to the looming massive unemployment problem lies in giving assistance to micro, small and medium-sized enterprises that employ 90 percent of the country’s workforce.
A bill has been filed in the House of Representatives for the adoption by the government of a business stimulus package worth P485 billion.
The proposal is aimed at providing funds for extensive COVID-19 testing, giving wage subsidies, making available zero-interest loans and supporting the government’s “Build, Build, Build” infrastructure program.The adoption of business stimulus measures to revive the national economy after getting hit by a financial crisis has proven to be effective in developed countries that have experienced it.
The idea is, the private sector shall take the lead or be at the forefront of the economic recovery, with the government limited to the role of providing assistance and incentives to encourage private initiative.
Given the proper safeguards against corruption and misuse of public funds, market forces and business considerations, not government direction, will be the linchpin of a viable economic recovery.
By limiting the government to a supporting role, political interference is minimized (something which some politicians may find difficult to do) and letting business people conduct their operations in a manner they think to be in their best interests, the national economy has very good chances of recovering quickly from the ill effects of the pandemic. Hopefully, this bill will not suffer the same fate that befell the tax reform measures the administration has earlier submitted for consideration by Congress. INQ
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