Chiz: Cut Red Tape to Hasten Release of MSME Aid
With billions in unused COVID-19 assistance for micro, small and medium enterprises (MSMEs), the government should look at where to cut the red tape in the distribution of aid to MSMEs, Sorsogon Gov. Chiz Escudero said.
Escudero, who is seeking a return to the Senate, said MSMEs struggling to recover from the impact of the pandemic cannot be idle for months while their applications are processed and the assistance released.
“Fighting red tape is the perpetual revolution. Cut, cut, cut. It is like a marathon. No record is static. It has to be broken. Hindi pwede ang 33 days to start a business and 120 days to deal with construction permits, per a World Bank study,” he said.
The Commission on Audit reported that only P4.09 billion or 45% of the P9.08 billion allocation for the COVID-19 Assistance to Restart Enterprises (CARES) Program has been released as of June 30, 2021. The fund is meant to be distributed as collateral-free, zero-interest loans to MSMEs affected by the pandemic.
According to the COA, only 28,222 MSMEs availed of loans under the CARES Program, leaving nearly P5 billion in unused funds. The Small Business Corp. (SB Corp.), which runs the program, said only PP2.03 billion was left of the funds as of January 2022.
“Not all problems can be solved with peso signs. There is a limit to checkbook solutions. Sa experience ko, bilang gobernador na nakalapat ang paa sa lupa, who starts his day by buying coffee from local brewhouse and ends it by shopping o nabudol ng mga anik-anik sa mga artisanal shops, isang problema ang ease of doing business ng mga maliliit na negosyante,” Escudero said.
“3 Rs ang kailangan ng MSME—Recovery, Resources, Red Tape. The two involve administrative streamlining. In this age, ICT and internet should help lighten the load, not turn people into digital slaves. Bawasan natin ang papel, ang proseso, ang pagrepaso,” he said.
The COA report said that only 48,010 MSMEs applied for loans under the CARES Program, but 4,378 of these, or 9.12%, canceled their applications due to the long processing time and lack of updates on their loan application status.
Escudero, the only incumbent governor who is running for senator, said the government must find ways to ensure that the assistance meant for MSMEs find their way to MSMEs. Otherwise, there is no hope for economic recovery.
“Bakit? Dahil 99.5 percent of businesses and establishments in the country are MSMEs. They employ 63% of labor and account for 40% of our gross domestic product. They are not a subsector of the economy—they are the economy,” Escudero said.
“Kailangan natin silang tutukan dahil kapag nakabangon sila, 99 percent din ng ating ekonomiya ang makakabangon, 99 percennt din ang babalik na mga trabahong nawala,” he said.
According to a Department of Trade and Industry survey in June 2021, 10% of MSMEs had closed, 46% were partially operating and 44% were in full operation due to the pandemic. The survey, which covered of 33,145 respondents, also found that 765,454 workers were displaced in the same period, down from 1.4 million. #
