Press Release
April 14, 2020

Villanueva: Wage subsidy for MSME workers to sustain quarantine, allow smoother restart of economy

Not only does the move help keep people in their homes during the quarantine, but providing the wage subsidy for workers in the micro, small and medium enterprises (MSME) sector will also allow the restart of the country's economy faster and smoother, according to Senator Joel Villanueva.

In a statement, Villanueva expressed gratitude to the government for considering the proposal he made to provide a wage subsidy to MSME workers on the condition that business owners retain their employment.

"We express our gratitude to our government for considering our proposal to provide a wage subsidy for workers in the micro, small and medium enterprises (MSME) sector," said Villanueva, chair of the Senate labor committee. "The subsidy will help our workers in the sector to provide for their families while the quarantine is ongoing."

"Securing the commitment of MSME employers to retain the employment of their workers to be eligible for the subsidy also eases the concern of our people on their job status once the quarantine is lifted. With this condition, we believe this will help smoothen our transition to restarting our economy, and arrest the decline in employment in the country," he continued.

The government said it would provide a wage subsidy to 3.4 million MSME workers, on the condition that business owners would not layoff its people while the quarantine is being enforced. MSMEs registered with the Bureau of Internal Revenue and the Social Security System would be prioritized.

Data from the Department of Trade and Industry and the Philippine Statistics Authority showed that in 2018, MSMEs employed 5.7 million workers nationwide, representing about 13 percent of the total number of employed workers.

Industries severely affected by the community quarantine enforced in Luzon and other local governments are in the wholesale and retail trade, and food and accommodation sectors which comprise at least 50 percent of the employment generated by MSMEs, according to the PSA.

Villanueva asked MSMEs to "to file applications as soon as our government completes the implementing guidelines on the wage subsidy program, which will include the list of requirements that need to be submitted."

"Complete requirements allow our agencies to process the application within their respective timelines, which helps expedite the release of the wage subsidy for our workers," he said.

The lawmaker reiterated his appeal for the government to provide credit assistance to MSMEs as well, even before the community quarantine is lifted, to help maintain and boost their operations.

Should the government decide to give credit guarantees to MSMEs, banks would likely grant these businesses loans that are needed to finance their recovery, Villanueva explained.

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