Industry

What Is Being Done to Protect MSMEs During Quarantine?

No one will come out of this untouched.
IMAGE PIXABAY/NEEDPIX
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The COVID-19 pandemic is affecting more than just public health—it’s also posing a threat to people’s very livelihoods as the virus’ biggest victim so far has been the economy. With enhanced community quarantine in place to stop the virus’ spread, businesses have had to stop operations, causing micro-, small-, and medium-sized enterprises (MSMEs) around the country to lose a big chunk of capital. It’s a scary time to be a business owner, regardless of the size of your enterprise.

Even the country’s giant conglomerates are taking a hit, as the Philippine Stock Exchange plunged by 13.34 percent today, wiping out hundreds of points on the market. The National Economic Development Authority (NEDA) estimates that the economy’s GDP growth will lose between 0.5 to one percentage points, which is equivalent to P93 to P187 billion.

The economic effects are apparent, and without safety nets in place, MSMEs won’t be able to recover from the aftermath. That’s why the Philippine Chamber of Commerce and Industry (PCCI) has created a petition for the government to implement relief measures for the sake of the Philippines’ MSMEs. It’s a 14-point plan that could alleviate the struggles of local businesses, with some requests already being met by the government.

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This is what’s being done—and what’s not—to help the country’s local businesses from collapsing under the pressures of COVID-19.

1| BIR Extends Tax Deadline

PCCI, like many individuals, demanded that the Bureau of Internal Revenue (BIR) move its deadline for delayed tax remittances. For a while, the bureau wouldn’t budge, stating that deadlines must be met even with the enhanced community quarantine.

But finally, BIR listened to the public’s demand, extending the filing deadline for 2019 annual Income Tax Returns to May 15.

2| PLDT Give Luzon Speed Boost to 25 Mbps

With majority of the population working from home, Internet speeds became a top concern. PCCI called for the Department of Information and Communication Technology (DICT) to request PLDT and Globe to remove the data capping on all mobile broadband Internet services so users can work from home unhampered from slow Internet, and also stay up to date on the latest COVID-19 news while under quarantine.

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While Globe is yet to announce any such plans, PLDT has already stated that it will be upgrading all fiber customers’ Internet to 25 Mbps for free. It’s not removing the data cap altogether, but it’s better than nothing.

3| Banks Declare Loan Amortizations

Another top concern was bank loan payments for businesses, consumers, and homes. During quarantine, businesses could lose one month of income and not have the funds to pay loans, making paying loans in full costly for affected persons.

Thankfully, a number of banks have already put COVID-19-related loan amortizations and extended payments in practice, such as BDO, BPI, Metrobank, Security Bank, RCBC, UnionBank, EastWest, PSBank, and Robinson’s Bank.

4| Enforced Price Controls for Food, Necessities

One important point made by PCCI is to ensure the government implements price controls to keep food prices low and affordable for the millions of affected citizens. This is particularly aimed at the marginalized sectors, who will be the hardest hit by the lockdown. PCCI also calls for the government to protect the food supply and enable trade to continue.

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So far, the government is meeting all of these suggestions: Malacanang stated that agencies and LGUs have been directed to monitor prices, San Miguel Corporation has assured the President that enough food will be produced for the people, and Malacanang’s guidelines on enhanced community quarantine state that trade and cargo will be allowed to operate as normal.

5| Power, Water, Transport, Telcos to Operate as Normal

To prevent society from collapsing, PCCI calls for “vital industries” like power, water, transport, and telcos, to continue operations, while abiding by health guidelines. This is mostly in effect, as many of the country’s power, water, and telco companies have reassured us that they’ll continue to operate.

But one industry that won’t is transport. Enhanced community quarantine states that transportation must be suspended, and we’ve already witnessed this happen. To stop the spread of the virus, it looks like it won’t be operating again anytime soon.

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6| Rehabilitation Fund for MSMEs Established

There’s no doubt everyone will come out of this affected in one way or another. The losses will depend per business, but to support the recovery of MSMEs, local enterprises are part of the government’s fiscal support package funded by Duterte’s P27.1 billion war chest.

P2 billion from the Department of Labor and Employment will be allocated for social protection programs for vulnerable workers and affected establishments. Meanwhile, P1 billion from the Department of Trade and Industry will be allocated to DTI’s Pondo sa Pagbabago at Pag-Asenso Microfinancing, designed to give special local packages to MSMEs.

7| Malls to Waive Rent

Many MSMEs are located in malls where rent can be pricey on a regular month, but with enhanced quarantine in effect, thousands of shops have had to close down, making them forgo a month of income.

As such, malls around the country, like Ayala Malls, SM Supermalls, and Robinsons Malls, have all waived the rental fees for MSMEs and stores in their establishments for the duration of the quarantine. The amount that has been waved is encouraged to be used for the financial assistance of MSMEs and their employees.

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8| Community Information Task Force

PCCI is also calling for the government to create a task force or a platform with updated data and maps detailing the areas affected by COVID-19. This is so MSMEs can know where to direct their assistance in this time of crisis.

So far, there isn’t an official government task force that’s centralized these efforts, but a number of resources are already available, such as the Department of Health’s COVID-19 dashboard, and community-organized platforms like ABS-CBN’s tracker and this volunteer organized tracker.

9| Health Measures Adopted in Businesses and Communities

This is a no-brainer for a lot of reasons, and businesses that will still be operating during quarantine have ensured the public that their facilities will be disinfected regularly, with their staff trained to practice appropriate health habits.

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While a number of measures are being taken to support MSMEs, not everything on PCCI’s 14-point list is being met. Here is what is yet to be done:

1| 300-Percent Holiday Pay for Workers

With thousands of people struggling under the no-work-no-pay policy, there is a lot of lost income to make up for. PCCI recommends giving increasing holiday pay for workers on April 9, Holy Thursday (Araw ng Kagitingan)

“Salary computation for the said date would total 300 percent if a business is in operation, and 200 percent if closed,” suggests PCCI. If the number can’t be met, PCCI also recommends 200 percent if in operation, and 100 percent if closed.

2| Food Quarantine in Mindanao

PCCI’s Mindanao branch suggests declaring Mindanao be a “separate food quarantine area” to ensure that food will continue to be delivered to the entire country, unhampered by restrictions. Mindanao is one of the vital food baskets in the country, and to ensure we have enough food supple, certain measures must be taken.

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“The Department of Agriculture’s declarations on quarantined agricultural products (affected by the foot and mouth diseases, avian flu, etc.) covers the entire country. Location-specific quarantine will help with the continued supply of food in the country,” said PCCI.

3| Food Logistics Backbone in Mindanao and Visayas

To maintain the food supply, it’s not just about growing and producing the food, but it's also ensuring it can move to the people who need it. That’s why PCCI is also recommending a food logistics backbone that will connect General Santos to Cebu City and Tagbilaran City through Davao and Bukidnon.

“Government can put up cold storage in key points,” said PCCI.

4| Conditional Cash Transfer/Pantawid Pamilyang Pilipino Program for MSMEs

PCCI suggests that NEDA, DTI, Department of Budget and Management (DBM), and Department of Social Welfare and Development (DSWD) collaborate to allow micro and small businesses to access the Conditional Cash Transfer/Pantawid Pamilyang Pilipino Program.

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After announcing its suspension, DSWD decided to continue giving out conditional cash transfers to needy families. However, whether this fund will be used to help micro and small businesses, like family canteens, is yet to be announced.  

5| Reallocated Infrastructure Funds

PCCI also suggests utilizing public infrastructure funds, like those handled by the Department of Transportation and Department of Public Works and Highways, to construct specialized COVID-19 monitoring and treatment facilities.

The two departments are currently in the middle of Duterte’s Build, Build, Build legacy program, so it’s yet to be determined if such funds will be used for COVID-19, considering the massive war chest recently unlocked by the administration.

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Anri Ichimura
Staff Writer, Esquire Philippines
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