Relief would be available for workers who lost or would lose their jobs and medical firms which would suffer production logjams as a result of the COVID-19 pandemic.
For workers, the Social Security System (SSS) said it was ready to disburse up to P1.2 billion to as many as 60,000 workers in industries that are likely to take a direct hit from the disease.
The Manila-based lender Asian Development Bank (ADB) also on Thursday (March 11) said its supply chain financing program was ready to lend at least $200 million to manufacturers and distributors of medicines and protective gear against COVID-19.
In a statement on Thursday, the Department of Finance (DOF) quoted SSS president and CEO Aurora C. Ignacio as giving assurance to Finance Secretary Carlos G. Dominguez III that the state-run pension fund was ready to come to the aid of workers directly hit by COVID-19’s economic impact.
The Social Security Act of 2018, which took effect last year, had put in place unemployment benefits for SSS members. These pay out funds equivalent to half of average monthly salaries for up to two months if members lost their jobs because of “redundancy, installation of labor-saving devices, retrenchment, closure or cessation of operations and disease or illness.”
The state planning agency National Economic and Development Authority (Neda) had estimated job losses to range between 30,000 and 60,000 in the tourism sector alone if the disease lingered until June.
Since February, 66 firms mostly in the tourism and manufacturing sectors either temporarily closed down or implemented flexible work arrangements as the COVID-19 outbreak slowed tourist arrivals and delayed raw material imports subjected to quarantine, the Department of Labor and Employment (Dole) reported last Tuesday (March 10).
As a result, over 300 workers joined the ranks of the unemployed while 4,416 others dealt with shorter hours, reduced working days, or forced leaves, which translated into lower pay.
Dominguez, who chairs the SSS, told other officials during a meeting last Wednesday (March 11) that “there might be some manufacturing jobs that are going to be affected because of the disruptions in the supply chain.”
Shipments of imported goods from China started picking up early this month.
The DOF quoted the SSS as saying it was ready to disburse P660 million for unemployment benefits of members and “up to P1.2 billion in a worst-case scenario.”
The average unemployment benefit that qualified members receive is about P11,000.
Maximum cash benefit is P20,000 per member.
The DOF statement quoted Edgar Cruz, SSS chief actuary and senior VP, as saying “with the current cash position of the SSS, it can well afford to pay unemployment benefits.”
In a lockdown or limited operations, Cruz said the SSS “can continue to provide pension and salary benefits as it has at least a four-month buffer.”
“Even if everything goes down, we will be able to maintain pension benefits and salaries for a little over a month and, after that, we will have to start liquidating more liquid assets,” according to Cruz.
The ADB, in the meantime, said it would help medical companies ramp up production of medicines and protective equipment needed to fight COVID-19.
It said manufacturers and distributors of products needed in the fight against the disease “are increasingly strained as production and distribution ramp up.”
Support from the ADB and commercial banks “will provide such companies” with more capital for expansion and other requirements.
It said the $200 million in financing could translate to more than $400 million of financing for at least a year “given that a single pool of supply chain finance is typically used for delivery over a period of 120-180 days.”
With the participation of commercial banks, ADB said the financing facility could reach $800 million.
ADB said it was closely monitoring COVID-19 impact and “is in regular contact with client banks to assess whether additional support is required.”
“The support will target companies in the supply chain that are critical to fighting the virus,” ADB said.