Gov’t urged to support MSMEs to curb unemployment

Bagong Henerasyon Rep. Bernadette Herrera said while the MSME sector is among the worst-hit by the pandemic due to the quarantine restrictions, it is vital in solving joblessness given its job creation potentials and its role as a major economic growth driver. (File photo: BH Bernadette Herrera-Dy/Facebook)

MANILA – A party-list lawmaker on Friday said the government must prioritize financial support measures for pandemic-hit micro, small and medium enterprises (MSMEs) to help address the unemployment problem triggered by the coronavirus crisis.

Bagong Henerasyon Rep. Bernadette Herrera said while the MSME sector is among the worst-hit by the pandemic due to the quarantine restrictions, it is vital in solving joblessness given its job creation potentials and its role as a major economic growth driver.

“The key to solving this Covid-induced unemployment problem may also lie within the MSME sector, that’s why it is important that we help them get back on their feet and save millions of jobs,” Herrera said.

Herrera cited recent Philippine Statistics Authority (PSA) data showing that at least 7.3 million Filipinos lost their jobs in April as the country’s unemployment rate rose to a record high of 17.7 percent due to the economic slowdown brought about by the global health crisis.

The House of Representatives has approved on final reading a PHP1.3-trillion stimulus package called Accelerated Recovery and Investments Stimulus for the Economy or ARISE bill.

She highlighted that the proposal includes a PHP50-billion loan program and PHP10 billion in financial assistance to the MSME sector.

“The importance of the MSME sector to the Philippine economy cannot be overemphasized. The sector employs a whopping 63 percent of the country’s total workforce,” Herrera said.

She noted that in 2018, MSMEs collectively generated a total of 5,714,262 jobs or 63.19 percent of the country’s total employment.

She said the pandemic brought several MSMEs into financial hardship, which prompted them to shut down permanently or lay off some workers to stay afloat.

According to the Department of Trade and Industry, 52.66 percent of MSMEs in the country fully stopped or closed their operations due to the pandemic, while 12.55 percent have limited operations and 34.79 percent managed to continue their operations as of end-April.

“We must act fast in providing much-needed relief to stressed MSMEs in order to stave off the dire economic effects of Covid-19, particularly this record-high unemployment rate,” Herrera said.