June 17, 2024


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COVID-19 aid: Dominguez says no cash for middle class, but wage subsidies for MSMEs

3 min read

Finance Secretary Carlos G. Dominguez III on Monday (April 13) expressed doubt the middle class would get the same dole out program as that for 18 million poor families, which would get a total P205 billion in cash as enhanced community quarantine against COVID-19 kept millions of workers out of their jobs.

Dominguez, however, said that registered micro, small and medium enterprises (MSMEs) will be provided loan guarantees while their workers will get a wage subsidy during the COVID-19 lockdown.

When asked in a CNN Philippines interview if the middle class will be given money, Dominguez replied: “I doubt it at this point in time.”

“Because when we define middle class, we define middle class as those people who have regular jobs,” he said.

The government had given priority to aid for vulnerable sectors, including displaced workers, as Dominguez had said they estimated up to 1.2 million Filipinos could temporarily lose their jobs during the pandemic.

He said the Bayanihan to Heal as One Act, the law which gave President Rodrigo Duterte extra powers to deal with the pandemic, had already addressed the middle class’ concerns.

The loan payment moratorium, extension of payment deadlines, no added charges for delayed payments for loans and credit cards were “designed primarily for the middle class,” Dominguez said.

“It’s the middle class that has housing loans, credit card loans, so the middle class has been assisted in that fashion,” he said.

Last week, Bureau of Internal Revenue (BIR) Commissioner Caesar Dulay announced that the country’s biggest tax-collection agency further extended the deadline of its ongoing tax amnesty on delinquencies to June 8.

The BIR earlier moved to May 23 instead of April 23 originally the last day to avail of the first-ever delinquencies amnesty in the country, which started in April last year, covering all national taxes unpaid since 2017.

Other statutory deadlines to submit or file documents and returns and pay certain taxes were also extended by the BIR by another 15 calendar days nationwide.

The quarterly percentage tax return due on April 25 was moved to May 25.

The BSP so far provided P520 billion in monetary support, including its P300-billion purchase of government bonds, and P220 billion in liquidity through the recent cuts in interest rates and reduction in bank reserves.

As for the loan guarantee program for MSMEs and the parallel assistance to their employees amounting to P35 to P51 billion, Dominguez said these initiatives will be formally announced on Tuesday (April 14).

Dominguez told CNN Philippines that about 3.5 million people will get the cash support for MSMEs and their workforce.

But Deputy Internal Revenue Commissioner Arnel S.D. Guballa told the Inquirer that only small businesses registered with the BIR and compliant with the tax payments of their employees will be qualified as recipients of the government’s upcoming wage subsidy program.

The BIR and the state-run pension fund Social Security System (SSS), which oversees the welfare and benefits of private sector employees, were in the thick of crafting the small business wage subsidy program to be implemented nationwide, Guballa said.

Dominguez explained that the government can only give assistance to firms registered with the BIR and the SSS, hence only those belonging to the formal sector.

“Those are the companies in our system, We have no way of identifying those who are not,” Dominguez said.

According to Dominguez, these programs for MSMEs also formed part of the government’s assistance to the middle class.

Asked by CNN Philippines if the Philippines can still afford the financial needs of another extension of the ongoing quarantine, which had been extended until April 30, Dominguez replied: “We will make sure that there will be enough funds to support those decisions. But again, we are watching this very carefully, as most countries in the world are. And we’re moving very conservatively.”

Edited by TSB

For more news about the novel coronavirus click here.

What you need to know about Coronavirus.

For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

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