SSS relief set for workers who lost jobs amid virus scare
Workers who will lose their jobs due to the new coronavirus disease (COVID-19) can get relief of up to P1.2 billion from the Social Security System (SSS) and medical-related companies reeling from the impact of the pandemic can get loans from a $200-million fund from the Asian Development Bank (ADB), according to the Department of Finance (DOF).
In a statement on Thursday, the DOF said SSS President and Chief Executive Aurora Ignacio had assured Finance Secretary Carlos Dominguez III that the state-run pension fund was ready to provide at least P660 million and up to P1.2 billion in unemployment benefits in case 60,000 SSS members became unemployed in the coming months.
Republic Act No. 11199, or the Social Security Act of 2018, put in place unemployment benefits for the SSS premium-paying members “equivalent to a half of their average monthly salary credit for a maximum of two months if they are displaced because of redundancy, installation of labor-saving devices, retrenchment, closure or cessation of operation and disease or illness,” the DOF noted.
Looming layoffs
The state planning agency National Economic and Development Authority estimates that 30,000 to 60,000 jobs in tourism alone would be lost if COVID-19 lingered until June.
Since February, 66 companies mostly in the tourism and manufacturing sectors either temporarily closed down or implemented flexible work arrangements due to fewer tourist arrivals and delayed raw material imports, the Department of Labor and Employment reported on Tuesday.
As a result, more than 300 lost their jobs and another 4,416 had to work shorter hours or fewer days, or were forced to go on leave, all translating into lower pay.
Dominguez, who chairs the SSS, told other officials during a meeting on Wednesday that “there might be some manufacturing jobs that are going to be affected because of the disruptions in the supply chain” even as shipments of imported goods from China were already picking up in early March.
SSS Chief Actuary and Senior Vice President Edgar Cruz was quoted by the DOF as saying that if the 60,000 workers who are SSS members were “dislocated” in a “worst case scenario” and took social security benefits averaging P11,000 each, the total of P660 million would be available.
“If the computation is based on the maximum cash benefit of P20,000 per applicant, the total amount will reach P1.2 billion,” Cruz said. “With the current cash position of the SSS at P21 billion, it can well afford to pay unemployment benefits, given that P660 million is just a fraction of the more than P16 billion that the SSS paid monthly for members’ pensions in 2019.”
4-month buffer
In case of a lockdown or limited operations to contain the spread of the coronavirus, Cruz said the SSS “can continue to provide pension and salary benefits as it has at least a four-month buffer in terms of liquidity made up of cash and near cash investments, like government securities.”
“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,” Cruz said.
Separately, the Manila-based multilateral lender ADB on Thursday said it had a total of $200 million in its supply chain finance program that it would lend to manufacturers and distributors of medicines as well as protective gear for COVID-19 in partnership with with commercial banks.
“Given that a single pool of supply chain finance is typically used for a subsequent delivery over a period of 120–180 days, the $200-million facility could support more than $400 million of financing over the next 12 months. Fifty-fifty risk sharing from partner commercial banks could boost support under the facility to $800 million over the same period,” the ADB said in a statement.
“The funds will be made available through the ADB’s supply chain finance program and provided to selected companies within weeks. The ADB is closely monitoring the impact of COVID-19 on trade finance and is in regular contact with client banks to assess whether additional support is required,” it added.
“The support will target companies in the supply chain that are critical to fighting the virus. We’re looking to support companies that want to ramp up production and therefore need to engage suppliers,” the ADB’s head of trade and supply chain finance Steven Beck said.
For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.
The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.
