Salceda proposes P45-B wage subsidy program for MSME workers

House Ways and Means Chairman and Albay 2nd District Representative Joey Salceda proposed a P45-billion wage subsidy scheme for some six million workers in micro, small, and medium enterprises (MSMEs) hit by the Luzon-wide enhanced community quarantine.

In a statement, Salceda dubbed the wage subsidy program a “Payroll Support for Workers, Entrepreneurs, and Self-employed” or PSWES program.

The program would cover 5.98 million workers for three months.

“I wrote to President Duterte today to recommend to him that we begin calibrating a wage subsidy program for small and medium enterprises, as well as for those in the gig economy.  We will need these enterprises to operate, so it’s essential for the economy and for job preservation that we lend them a helping hand,” Salceda said.

The lawmaker, citing his note to the President, said that a payroll support program would likely be necessary to support MSMEs that faced liquidity issues in the wake of the enhanced community quarantine “as well as their workers, who are at risk of being terminated if these MSMEs are unable to pay their wages and maintain operations.”

“Apart from supporting business, the program will also be able to provide relief to formal economy workers, entrepreneurs, and self-employed individuals, who typically belong to the middle class. Income support will also likely be necessary for freelancers and those in the gig economy who were unable to earn an income due to the ECQ,” Salceda said.

The lawmaker’s staff estimated that MSMEs employed around 4.1 million formal economy workers based on the Bureau of Internal Revenue’s data on small taxpayers.

Some 380,000 entrepreneurs, meanwhile, were sole owners of enterprises and about 1.5 million Filipinos were freelancers, Salceda’s office noted, citing 2018 Global Freelancer Insights Report.

“Together, these sectors have a combined workforce of 5.98 million workers,” the lawmaker said.

“The average monthly minimum wage is around P9,500 per month. We propose a wage subsidy that covers around a quarter to a third of this amount. The cost of supporting their income, at P2,500 to P3,000 per month for two months, is P44.85 to P53.82 billion pesos,” he said.

Salceda proposed to distribute most of the aid through the Social Security System (SSS), assisted by the BIR and the Department of Labor and Employment (DOLE) for formal economy workers.

“For freelancers, I am proposing an open-application window similar to the Covid Adjustment Measures Program (CAMP),” he said.

The House tax panel chair also proposed an open-application process for freelancers with cost-free BIR and SSS registration.

“That way, they are able to see the full benefits of being accredited with the state, while also being able to contribute in future years when they are in better conditions. Kumbaga, bigyan kita ng tulong ngayon, para kapag nakaluwag-luwag ka na, makatulong ka rin sa iba. We will need to expand the tax base when this situation normalizes. I think this will be a big part of that effort,” Salceda said.

“As you know, I wrote HB 1527, which would essentially be a Magna Carta for the freelancers. There’s a lot of potential there if we can regularize that industry. Showing them the benefits of being part of the formal economy would be the ultimate invitation,” he said. — DVM, GMA News