Jinggoy Estrada proposes ‘paycheck protection program’ for MSMEs
MANILA, Philippines — To help micro- small- and medium-sized enterprises (MSMEs) that were severely affected by the COVID-19 pandemic, former senator Jinggoy Estrada wants to institutionalize a ‘paycheck protection program’ once elected to a fresh Senate term.
Originally adopted in the United States and implemented by local government units like Makati City, Estrada said the program provides small businesses with funding support to pay their workers’ salaries including benefits. Part of the funds can also be used to buy supplies and raw materials or pay interest on mortgages, rent, or utilities. The only condition is for business owners to keep their workers employed during the pandemic.
“MSMEs are some of the worst hit by the COVID-19 pandemic. As the country gradually gets back jobs lost due to the pandemic, MSMEs – which account for 5.38 million jobs or six out of every 10 workers of the country’s labor force, deserve all the help they can get,” Estrada said.
While the Department of Trade and Industry (DTI) assured the business community that its 2022 budget and leftover cash from the Bayanihan II economic stimulus package is sufficient to give loans and livelihood aid to 500,000 MSMEs, he said there is a need to provide more.
By DTI’s own estimate, Estrada said about 10 percent of small businesses remain closed as of November 2021, most of which are likely to remain shuttered due to slow demand and capital shortage. “This makes the proposed paycheck protection program both urgent and imperative. We need to keep businesses open to continue providing jobs,” he said.
A two-term senator, Estrada said the way his proposed measure will be structured seeks to mitigate the cost to state coffers since government’s participation will be in the form of straight subsidies or guarantees on loans that MSMEs will acquire for their businesses.
A set of graduated requirements that MSMEs should follow such as ensuring that the subsidies will mostly go to augmenting the payroll of employees before being used for other expenses will ensure that the support funds are well spent.
As an incentive, Estrada said the loans become a grant to MSMEs that will strictly comply with its specific provisions and guidelines.
“MSMEs have proven in previous assistance programs to be among the most trustworthy when it comes to loan repayments,” he added.