Think tank backs wage subsidy for workers affected by pandemic

MANILA - An independent think tank on Monday called on lawmakers to allocate funds for wage subsidies for workers affected by the COVID-19 crisis. 

Action for Economic Reforms said wage subsidies will provide badly needed relief to 1 million vulnerable households amid the COVID-19 crisis, and promote compliance with health protocols and quarantines. 

AER said it supports the proposal of the Department of Trade and Industry to give P8,000 per month, for a maximum of 3 months, to workers affected by the COVID-19 lockdowns.

The measure was earlier proposed by Trade Secretary Ramon Lopez.

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The group said the wage subsidy 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 group said. 

The group said the government can provide the subsidy as it has the fiscal space to support this, due to key structural reforms, especially tax reforms. 

"Fiscal timidity will only cause more harm to the economy and make our economic recovery long," AER said. 

The wage subsidy package may be done through a combination of realigning the present budget and additional deficit spending, the group added. 

"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," AER said. 

Lawmakers are proposing a P405-billion stimulus package called Bayanihan 3, which includes the provision of wage subsidies. 

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