MANILA, Philippines – Senator Sherwin Gatchalian on Wednesday called on the government to carry out a subsidy program that will help curb the rising unemployment rate in the country brought about by the ongoing novel coronavirus disease (COVID-19) pandemic.
Gatchalian, the vice chairman of the Senate committee on economic affairs, suggested for the government to adopt a subsidy program similar to the Paycheck Protection program of the United States to prevent further lay-offs amid the public health crisis.
He said the Paycheck Protection Program is designed to provide incentive for small businesses to keep their workers on the payroll.
Under this setup, business owners can get full loan forgiveness as an incentive as long as the funds are used for eligible expenses.
This way, the company gets to retain its employees while maintaining its operations.
Gatchalian believes that if this program will be included in the proposed Bayanihan to Recover as One Act, dubbed as the Bayanihan Law 2, it will significantly help employees and companies.
“Marami talagang kumpanya na nagda-downsize at sigurado akong mas marami pa ang mawawalan ng trabaho. Tiyak babalik din sila sa gobyerno, sa LGU o sa national government. Hindi na yan kakayanin ng gobyerno. Babalik at babalik sila sa gobyerno para humingi ng suporta,” he said.
“A Paycheck Protection Program-like subsidy will hit two birds with one stone. You secure the tenure of employees and at the same time you generate the economic side,” he added.
The government has implemented the Small Business Wage Subsidy (SBWS) program, which provides a P5,000 to P8,000 wage subsidy to employees through the Social Security System (SSS).
But Gatchalian pointed out that this one-time subsidy does not provide long-term support to employees.
The senator said many Filipinos have lost their jobs after companies opted to downsize their operations to trim their losses as they weather the economic impact of the pandemic.
Citing a report from the Philippine Statistics Authority, Gatchalian noted that 7.3 million Filipinos are unemployed as of April 2020, an all-time high unemployment rate.
The lawmaker also warned of uncertain labor market recovery after a study by the International Labour Organization’s (ILO) revealed a 14% drop in global working hours during the second quarter of 2020, equivalent to the loss of 400 million full-time jobs, based on a 48-hour working week.
The same ILO study projects a decrease in working hours of 4.9% in the second half of the year which is equivalent to the loss of 140 million full-time jobs.
Gatchalian said there is a need for the government to prioritize the preservation of jobs in the country, and it will need an estimated P301 billion to create direct and indirect jobs for those impacted by the COVID-19-induced economic crisis for the rest of the year.
“The government has been calling for Filipinos to help spur the economy by spending more and taking advantage of record-low interest rates. But how can Juan dela Cruz think of spending his hard-earned cash during this crisis when he isn’t sure whether he’d be able to keep his job the following day,” he said.
That’s why I implore the government to prioritize the preservation of jobs of our kababayan so that they’ll be able to contribute in reviving our economy back,” he added.
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