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Concepcion cautions gov’t against bailouts

By BERNIE CAHILES-MAGKILAT

Presidential Adviser for entrepreneurship Joey Concepcion has cautioned government on the planned bailouts of private enterprises heavily affected by the COVID-19 menace.

Presidential adviser on entrepreneurship Joey Concepcion (PCOO / MANILA BULLETIN FILE PHOTO)

Presidential adviser on entrepreneurship Joey Concepcion
(PCOO / MANILA BULLETIN FILE PHOTO)

“They have to be careful… that has to be calibrated,” said Concepcion during a webinar.

A proposed bill in the Lower House entitled Economic Stimulus Act of 2020 or PESA seeks to provide ₱1.3-trillion fund to provide immediate assistance to workers and businesses and help the economy recover from the impact of the COVID-19 pandemic. It provides for a ₱300-billion “bailout” fund for heavily impacted industries.

The bailout fund would be course through via the National Emergency and Investment Corp. which seeks to “minimize the damage” wrought by COVID-19 to the economy.

Concepcion, also founder of the Go Negosyo, explained that government has to set its priorities on the planned bailout. First, he said, what is important is to open first the economy and see how much impact the COVID-19 pandemic had done to companies.

Only by opening the economy can the government determine what industries are heavily impacted. He cited tourism, restaurants and airlines, but said that only by opening the economy the government will have some certainty as to what industries can continue operating under a restructured operation where social distancing can be implemented and still be profitable.

For now, there is a gut feel and theoretical business assumption on sectors that are more challenged but these can only be determined if the economy is already reopened.

In the meantime, consumers do no still have the confidence to spend while companies are running out of working capital. But, he said, if banks can see that an industry is profitable under the new normal then it will lend to companies in that particular industry. His initiative for mass rapid testing among employees is one way to build confidence among consumers.

Meantime, the Department of Trade and Industry (DTI) has already thrown its support to the PESA bill and called for its urgent passage.

“We affirm the need to help sustain the income of workers and businesses adversely impacted by the pandemic as we gradually reopen our economy,” Trade Secretary Ramon Lopez said.

“By providing working capital assistance, technical and entrepreneurial education, and financial management, among others, we will be able to protect Filipinos by ensuring businesses will continue operating post-lockdown and help turn the tide for businesses and workers affected by the health crisis,” he added.

Under the PESA bill, the government will earmark ₱1.3 trillion as a post-pandemic stimulus package, which includes a budget of ₱650 billion for an expanded infrastructure program on health care, education, and food security.

Aside from the ₱300 billion for the National Emergency and Investment Corp., which seeks to “minimize the damage” wrought by COVID-19 to the economy, the pro¬posed bill also calls for ₱200 billion for wage subsidies and the grant of interest-free loans to assist micro, small and medium enterprises (MSMEs), including businesses labeled “non-essential” during the lockdown; as well as ₱128 billion for the Credit Mediation and Restructuring Guarantee Fund, an expanded loan program that will cover all “critically-impacted businesses” nationwide, among others.

The bill is aimed at restoring business confidence and operations, as well as preventing business closure prior to the imposition of the Enhanced Community Quarantine (ECQ). It has also been the subject of many consultations and hearings under the Committees on Economic Affairs under Chairperson Sharon Garin and Trade and Industry under Chairman Wes Gatchalian, which consolidates the proposals of Albay 2nd District Rep. Joey Salceda and Marikina Rep. Stella Luz Quimbo.

The trade chief expressed his thanks to the House of Representatives led by Speaker Alan Peter Cayetano and Majority Leader Martin Romualdez for their strong support to revive the economy.


Source: Manila Bulletin (https://business.mb.com.ph/2020/05/27/concepcion-cautions-govt-against-bailouts/)

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