P370-B stimulus package pushed to mitigate Covid-19 impact

Following a virtual meeting with House leaders and the government’s economic managers on Tuesday, the TWG was tasked to consolidate the Economy Moving Forward as One bill by Marikina City Representative Stella Quimbo and the Philippine National Stimulus Strategy by Albay Rep. Joey Salceda. (File Photo: House of Representatives of the Philippines/Facebook)

MANILA – A technical working group (TWG) of the House of Representatives’ Defeat COVID-19 Committee (DCC) will draft a consolidated bill proposing a PHP370-billion economic stimulus package to mitigate the impact of the coronavirus disease 2019 (Covid-19) pandemic on the country’s economy.

Following a virtual meeting with House leaders and the government’s economic managers on Tuesday, the TWG was tasked to consolidate the Economy Moving Forward as One bill by Marikina City Representative Stella Quimbo and the Philippine National Stimulus Strategy by Albay Rep. Joey Salceda.

Quimbo’s proposed PHP370-billion fiscal stimulus package is geared towards labor retention to ensure business continuity.

She said around 29 million workers, particularly those in the trade and tourism sectors as well as “non-essential” businesses closed during the enhanced community quarantine, can be affected by the Covid-19 outbreak in varying degrees.

She said the micro, small, and medium enterprises (MSMEs) will have the greatest difficulty coping with shocks, taking into account around 746,960 formal MSMEs and 4.5 million informal MSMEs in the sectors most affected by Covid-19 crisis.

“Tunay na mahihirapan ang mga maliliit na negosyo sa new normal (The small businesses will greatly suffer from the new normal [after the quarantine]),” she said.

Qumbo noted that the pandemic could potentially cost the country a total of PHP1.08 trillion.

She said the government needs to spend PHP700 billion pesos to prevent an economic fallout, with PHP330-billion public spending through the Bayanihan to Heal as One Act and the remaining PHP370 billion for fiscal stimulus.

“Government can help businesses help themselves in the post-Covid era,” she added.

Under her proposal, PHP110 billion will be allocated for wage subsidies, PHP140 billion for interest-free loans and loan guarantees, PHP119 billion for grants to support activities to improve business resilience, and PHP1 billion to compensate for paid sick leaves of Covid-19 patients.

Quimbo also called on the government to craft a long-run plan for economic resilience to improve the country’s economy to recover from shocks such as pandemics, natural disasters, and financial crises.

Meanwhile, Salceda’s Philippine National Stimulus Strategy proposes structural adjustment plans to increase the country’s economic resilience.

It includes a Negative Interest Loans (NIL) plan, or a PHP350-billion loan package that will grant loans at negative interest in exchange for workers retention. The maximum loanable amount shall be 50 percent of the company’s direct labor costs and the loan shall be payable for three to five years.

Salceda also proposed a Credit Refinancing and Mediation Service (CRMS) to ensure that MSMEs are able to fulfill obligations under more favorable terms of credit.

A National Emergency Investment Corporation (NEIC) shall be established to act as a consolidator of private sector debts, service these debts in exchange for equity, and yield returns for the government.

“The NEIC will minimize permanent damage to the economy by bailing out firms who would go bankrupt because of current Covid-19-driven difficulties, but which would otherwise be profitable under different conditions,” Salceda said.

“Congress as One through Bayanihan together with ECQ has prevented 50,000 infections and saved 3,000 lives, especially of our elderly. Laws cannot resurrect the 300 lives lost to Covid 19. But certainly, we have the instruments and the will to bring the economy back to life, towards a comfortable life for all,” he added.

The consolidated bill shall be submitted to the DCC for another round of deliberation.