As the enhanced community quarantine (ECQ) persists and the COVID-19 pandemic continues to spread, several owners of micro, small, and medium-sized enterprises (MSMEs) are struggling to keep their businesses afloat. With severely reduced business activity, many entrepreneurs are running out of cash to weather the storm brought about by the lockdown.
Recognizing the risks and challenges that the country’s MSMEs are facing, the Philippine government is implementing several measures to mitigate the effects of the ECQ. Many of these MSME-focused programs are included in the 4-pillar socioeconomic strategy against COVID-19, consolidating several initiatives that the Duterte Administration rolls out to help the country get back on its feet after the pandemic.
Here, we summarize this 4-pillar strategy focusing on the benefits and financial aid that MSMEs will receive. Note that these are provisions from the strategy as of April 9, and the Department of Finance (DOF) has noted that the contents of the strategy may be updated in the future:
Pillar 1: Emergency support for vulnerable groups
The first pillar targets various individuals and groups of the population that are heavily impacted by the pandemic. It summarizes various financial aid and cash assistance programs across different government agencies worth an estimated total of Php305 billion.
This pillar has the most extensive list of programs among the four that specifically target MSMEs. Among these programs are:
Pillar 2: Marshalling resources to fight COVID-19
The second pillar outlines all of the government’s provisions to aid the medical efforts against the pandemic. Most of these programs target the individuals who have contracted the disease, the frontliners who are helping contain the pandemic, and the organizations which have dedicated resources and facilities to support the medical efforts.
As this pillar focuses on the healthcare aspect of the pandemic, there are no programs here that specifically target MSMEs. However, the pillar does list various tax incentives and exemptions for businesses providing critical medical supplies, including the waiving of importation fees for certain categories of products.
Pillar 3: Fiscal and monetary actions to finance emergency initiatives and keep the economy afloat
The third pillar focuses on the government’s efforts to maintain the national economy amid the crisis, which has taken a hit from the reduced business activity both within the country and around the world. Most of the agencies involved in the programs under this pillar all have something to do with circulating government funds such as the Bangko Sentral ng Pilipinas (BSP).
For this pillar, there is one provision that applies to certain MSMEs: the extension of tax-compliance and loan payment deadlines that fall under the ECQ period. The government is allocating a budget of Php470 million for this specific program.
Pillar 4: An economic recovery plan to create jobs and sustain growth
The fourth and final pillar revolves around one specific program: a bounce-back plan designed by the Inter-Agency Task Force (IATF). The bounce-back plan will focus on revitalizing the national economy once the ECQ is lifted, and it will target several business sectors affected by the lockdown.
The IATF has already begun laying the groundwork for this pillar by conducting a nationwide survey assessing the damages and challenges experienced by various businesses. The results of this survey will then be used to steer the direction of the bounce-back plan, with the IATF creating unique strategies for different sectors, most notably a targeted plan for MSMEs.
Rising Above the Lockdown
The 4-pillar strategy captures a bulk of the government’s efforts to help MSMEs rise above the lockdown. It highlights how even if entrepreneurs are facing numerous hardships brought about by the ECQ, there are still several avenues they can take to keep their business afloat and turn the challenges into opportunities.
To stay updated on government initiatives concerning MSMEs, join UNAWA’s Telegram Group. For more business tips on how to navigate the new normal, check out the other articles of UNAWA Explainer.