Jinggoy Estrada offers “Paycheck Protection Program” for MSMEs
MANILA, Philippines – To help micro-small and medium-sized enterprises (MSMEs) that have been badly affected by the COVID-19 pandemic, former Senator Jinggoy Estrada wants to institutionalize a “paycheck protection program” once elected for another term in the Senate.
Originally adopted in the United States and implemented by local government units like Makati City, Estrada said the program provides small businesses with financial support to pay their workers’ wages, including benefits. A portion of the funds may also be used to purchase supplies and raw materials or pay interest on mortgages, rent or utilities. The only condition is that business owners keep their workers employed during the pandemic.
“MSMEs are among the most affected by the COVID-19 pandemic. As the country gradually recovers the jobs lost due to the pandemic, MSMEs – which account for 5.38 million jobs or six out of 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) has assured the business community that its 2022 budget and the remaining cash from the Bayanihan II economic stimulus package are sufficient to provide loans and livelihood assistance to 500,000 MSMEs, he said more was needed.
By DTI’s own estimate, Estrada said about 10% of small businesses remained closed in November 2021, most of which are expected to remain closed due to weak demand and a shortage of capital. “This makes the proposed Paycheck Protection Program both urgent and imperative. We need to keep businesses open to keep providing jobs,” he said.
A two-term senator, Estrada said the way his proposed measure will be structured is intended to mitigate the cost to state coffers, as government participation will be in the form of direct grants or guarantees on loans that MSMEs will acquire for their businesses.
A set of graduated requirements that MSMEs should follow, for example ensuring that grants are used primarily to increase employee payrolls before being used for other expenses, will ensure support funds are well spent .
As an incentive, Estrada said the loans become a subsidy to MSMEs who will strictly comply with its specific provisions and guidelines.
“MSMEs have proven in previous assistance programs to be among the most reliable in terms of loan repayment,” he added.
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