Action for Economic Reforms (AER) supports the proposal of Department of Trade and Industry Secretary Ramon Lopez to provide a subsidy of PhP 8,000 per month, for a maximum of three months, to workers affected by the COVID-19 lockdowns.
Wage subsidies will provide badly needed relief to 1 million vulnerable households and act as an enabling mechanism for individuals to comply with health protocols and quarantines. This is essential in flattening the curve and in defeating COVID-19 in the long run. Furthermore, it will help businesses, especially micro, small, and medium enterprises which have temporarily shuttered, stay afloat amid the lockdown.
The community pantry initiatives from all around the country indicate the immense number of people struggling to put food on the table. Providing relief to those who have lost jobs, and to those who suffer from hunger, is therefore not only an economic argument; it is a moral imperative. The community pantries are a reaction to the government’s failure to provide relief.
As the implementation of this wage subsidy is still contingent on the budget, we urge our legislators and economic managers to allocate sufficient funds for this measure. We have the fiscal space to support this, due to key structural reforms, especially tax reforms, and this fiscal space is only relevant when used. Fiscal timidity will only cause more harm to the economy and make our economic recovery longer.
Furthermore, the wage subsidy package may be done through a combination of realigning the present budget and additional deficit spending. We believe that the current budget is inefficient and unresponsive to the national emergency, as showcased in its unnecessary allocations towards counter-insurgency and intelligence funds, and insufficient allocation for health and social protection.
We call on the Department of Trade and Industry (DTI), Department of Finance (DOF), Department of Labor and Employment (DOLE), Department of Budget and Management (DBM), and National Economic Development Authority (NEDA) to implement this wage subsidy program at the soonest possible time. Providing targeted support to the hungry and unemployed will facilitate the flattening of the curve, and in turn, our economic recovery.
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