Professional Documents
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Part 2 Capstone
Part 2 Capstone
GROUP 5
Applied Economics
12 - AMARE
25 September 2020
Response to COVID 19: Aid for MSME’s in Cebu Province for the year 2020
I. Introduction
The great fall of the Philippine economy manifested when the Coronavirus hit the country.
With strict regulations implemented during the pandemic, it poses certain constraints for
existing corporations and businesses. These include the micro, small and medium enterprises
(MSMEs) who are in dire need of assistance during these trying times. The MSMEs serve as the
backbone of the Philippine economy – without them, economic development will not yield as
they foster growth, employment, and income for the country's local sectors and areas. Though
the provision of policies is present for MSMEs in the previous years, there are no current
programs and aid given to this sector during the epidemic. If not addressed, its present-day
GDP might collapse and pull back the labor force.
This proposal is mainly for MSMEs located in the locality of Cebu province only. The P85
billion regional budget allotted for Cebu province is limited to MSMEs from sectors belonging to
agribusiness, retail, and food and beverage. The 14,459 agricultural farms, 32,554 Wholesale
and Retail Trade businesses, and 10,190 Accommodation and Food Service Businesses sector
are given financial aid during the Covid-19 pandemic. Below is the agenda for each sector
mentioned.
1.) Agricultural farms will be provided fifty-two thousand pesos (P52, 000) as a one-time
allowance to lift businesses stagnation during the pandemic.
2.) Monetary monthly allowance for a period of two months amounting to thirty thousand
pesos (P30, 000) to eligible retail businesses in the MSME sector.
3.) Monetary monthly allowance for a period of three months amounting to twenty
thousand pesos (P20, 000) to eligible Accommodation and Food Service Businesses in
the MSME sector.
P400 Million
P1 Billion
P52.14 Billion
P22 Billion
The largest bulk of business establishments in the Philippines consists of MSMEs. The
country’s enterprises constitutes micro enterprises 88.45% (887,272), followed by small
enterprises at 10.58% (106,175) and medium enterprises at 0.49% (4,895). (Department of
Trade and Industry, 2020). Considering that MSMEs are the most substantial contributor to the
country’s economic growth, the government’s armed mission is to keep the sector afloat and
moving.
With the stressed regulations local governments are imposing in different cities, the
MSME sector, specifically on Region 7, is on the brink of collapse. The best way to address this
is through the government’s collaboration. The P22 Billion budget is sub-divided into three
different sectors: Agriculture, Wholesale and Retail Trade, and Accommodation and Food
Service Businesses. These enterprises need urgent help to prevent further crises such as
unemployment and economic recession.
Proposed amelioration programs will be introduced for the strengthening of the MSME
sector during the Coronavirus pandemic. Financial aid will be given to those who are eligible
and qualified. Below is the requirements and qualifications for MSME program applicants.
“Grow Funds Program” prioritizes the agricultural businesses located in Region 7 under the
MSME sector. The products from agricultural farms should only be plants, fruits, vegetables,
and other crops. The program will not shoulder applicants whose products do not fall under
this category. The businesses that apply for monetary aid due to lack of funding for
maintenance, employee salary, utilities, and other necessities can request an application.
Requirements include:
o Business Size: The desired business must not qualify under the BIR’S Large Taxpayer
Service (LTS) list.
o Farm owners or operators shall present registration and renewal application of
MSMEs, including application for Barangay Micro-Business Enterprise (BMBE).
o Business of Internal Revenue (BIR), Department of Trade and Industry (DTI), and
business permits particularly barangay permits and/or mayor’s permits, shall be
presented with photocopy. Applicant can process permits through automated
systems such as the Philippines Business Registry (PBR).
o Contract Lease or Land Title (Tax Declaration)
o Any valid and government accepted ID and Tax Identification Number (TIN).
“Pondo Panghanapbuhay Program” prioritizes the wholesale and retail trade businesses
located in Region 7 under the MSME sector. The businesses that applies for monetary aid due
to lack of funding for employee salary, inventory, maintenance, and utilities for the store
branch can request an application. Requirements include:
o Business of Internal Revenue (BIR), Department of Trade and Industry (DTI), and
business permits particularly barangay permits and/or mayor’s permits, shall be
presented with photocopy. Applicant can process permits through automated
systems such as the Philippines Business Registry (PBR).
o Tax Identification Number (TIN)
o Photocopy of Current Company I.D.
o Photocopy of any government I.D. (SSS, Passport, Driver’s License, PRC License,
BIR/TIN, Police Clearance (with picture), Voter’s, PWD, PhilHealth, Postal, and
Barangay ID)
“Revival Funds Program” prioritizes the accommodation and food service businesses
located in Region 7 under the MSME sector. The businesses that applies for monetary aid due
to lack of funding for employee salary, supply and inventory, product capital, maintenance and
utilities for the store branch request an application. Requirements include:
o Business of Internal Revenue (BIR), Department of Trade and Industry (DTI), and
business permits particularly barangay permits and/or mayor’s permits, shall be
presented with photocopy. Applicant can process permits through automated
systems such as the Philippines Business Registry (PBR).
o Tax Identification Number (TIN)
o Photocopy of Current Company I.D.
o Photocopy of any government I.D. (SSS, Passport, Driver’s License, PRC License,
BIR/TIN, Police Clearance (with picture), Voter’s, PWD, PhilHealth, Postal, and
Barangay ID)
III. Cost Breakdown
Applicants will be provided fifty-two thousand pesos (P52, 000) as a one-time allowance
after application approval. Below shows the cost breakdown for fund allotment.
1.) Farm equipment and tools help farmers improve work and reduce labor. The ten
thousand and 400 pesos (P10, 400) can be allotted to buy new replacements and/or
repair existing equipment and tools these include shovel, hand fork, harrows, and the
like.
2.) A budget of twenty-six thousand pesos (P26, 000) will be allotted for seeds and
fertilizers. The farmer will have to allocate it for the seedlings and fertilizer of his choice.
The National Statistics Office shows that Coconut, Banana, Mango, Ipil-Ipil, and
Malunggay is the top 5 permanent crops in Cebu province.
3.) For farms with irrigation systems, fifteen thousand and six hundred pesos (P15, 600) will
be allotted for that. An irrigation system consists of a (main) intake structure or (main)
pumping station, a conveyance system, a distribution system, a field application system,
and a drainage system for farms. The cost depends on the volume of soil that is cut and
filled throughout a field during the leveling procedure.
For two consecutive months, thirty thousand pesos (P30, 000) will be given as a monthly
monetary allowance to eligible wholesale and retail businesses in the MSME sector. Governor
Gwendolyn Garcia said the provincial government is set to roll out the assistance program for
MSMEs that experienced business reverses due to the pandemic. "We will assist those who lost
their jobs due to business closures,” the governor was quoted as saying in Cebuano in a
statement released by Sugbo News, the capitol’s official news outlet (Lorenciana, 2020). The
“Pondo Pangkabuhayan Program” will help aid financial issues for the wholesale and retail
trade businesses with the government’s assistance.
For three consecutive months, twenty thousand pesos (P20, 000) will serve as a monthly
monetary allowance to eligible accommodation and food service businesses in the MSME
sector. Even with restrictions and containment measures lifted, this sector is still the most
affected. Accommodation services are still not allowed to operate with the allowable limit of
50%. Food services are highly encouraged to stay closed and rely on deliveries and take-out. It
is preferable to offer aid for three months to succor the struggling sector.
1.) The budget of eight thousand pesos (P8, 000) in inventory will be allotted for the stocks
and supply of retail stores since production has slowed down.
2.) The budget allotted for rental payments amounting to seven thousand pesos (P7, 000)
will serve as an added monetary aid. It is to subsidize the remaining rental balance the
business owner has to pay.
3.) The maintenance and utilities will consist of electricity, water, and the wear and tear of
the operations within the business branch.
IV. Inclusion for Government and Other Sectors for Proposed Programs
1.) Beneficiaries
As said from the paragraphs above-mentioned, the main beneficiaries are those who:
1.1 Eligible MSME applicant under the agricultural sector in Region 7.
2.) Branch of Government In-charge
2.1 Department of Trade and Industry (DTI) – The Department of Trade and
Industry (DTI) has been very supportive with the MSME sector. Since they know that
this sector drives the Philippine economy, they will forefront the entirety of this
program. DTI will facilitate with:
DTI will mainly spearhead the program by managing registrations and fund
allocation to the different Negosyo Centers in Cebu Province.
2.2 Negosyo Centers – The Department of Trade and Industry (DTI) has existing
programs for MSMEs, and the Go Negosyo Act shall support this proposed program
under the Republic Act No. 10644. The local government units (LGUs) and Negosyo
Centers shall go hand-in-hand for this program. Both shall communicate in
processing the duly accomplished forms provided by the applicants. Those who vie
for the "Grow Funds" program's eligibility shall apply only in Negosyo Centers in
Cebu Province.
Funds can only be collected in Negosyo Centers and will be disbursed through:
4.) Regulations
IV.1 THIS SECTION ARE FOR THOSE WHO ILLICITLY MISUSE THE FUNDS
GIVEN FOR GROW FUNDS PROGRAM ONLY. Penalty. — Any person who shall
willfully violate any provision of this Act or who shall in any manner commit any
act to defeat any provision of this Act shall, upon conviction, be punished by a
fine of not less than Twenty-five Thousand Pesos (P25,000.00) but not more than
Fifty Thousand Pesos (P50,000.00) and suffer imprisonment of not less than six
(6) months but not more than two (2) years.
IV.2 In case of non-compliance with the provisions of Sec. 9 of this Act, the
BSP shall impose administrative sanctions and other penalties on the concerned
government financial institutions, including a fine of not less than Five Hundred
Thousand Pesos (P500,000.00).
1.) Beneficiaries
As said from the paragraphs above-mentioned, the main beneficiaries are those who:
1.1 Eligible MSME applicant under the wholesale and retail trade sector in Region 7.
Funds can only be collected in Negosyo Centers and will be disbursed through:
2.3 The funding for the implementation of the program shall be sourced from the
applicable budgets of concerned agencies and such other source to be identified by
the Department of Budget and Management. The implementation of program under
may also be applied for funding under the MSMED Council.
4.) Regulations
4.1 THIS SECTION ARE FOR THOSE WHO COUNTERFEIT CERTIFICATIONS AND
OTHER FALSIFIED DOCUMENTS ONLY. The Department of Finance (DOF) has
issued a public statement involving instances Involving the issuance of
counterfeit certifications and other falsified documents. These documents
bear unverified information masked in forged signatures of DOF officials and
counterfeit seal of Philippine Departmental agencies.
Forgery. A person signs in another’s name with the intent to defraud; Art.
170. Falsification of legislative documents. — The penalty of prision
correctional in its maximum period and a fine not exceeding P6,000 pesos
shall be imposed upon any person who, without proper authority therefor
alters any bill, resolution, or ordinance enacted or approved or pending
approval by either House of the Legislature or any provincial board or
municipal council.
Penalties. Any person who commits any of the acts shall be punished with
imprisonment of not less than six (6) years and one (1) day but not more
than twelve (12) years, and a fine not less than Fifty Thousand pesos (P
50,000.00) but not more than Five Hundred Thousand pesos (P
500,000.00).
1.) Beneficiaries
As said from the paragraphs above-mentioned, the main beneficiaries are those who:
1.2 Eligible MSME applicant under the accommodation and food Service businesses
trade sector in Region 7.
2.2 Negosyo Centers – Applicants should apply in Negosyo Centers located in Cebu
province. All requirements and forms shall only be transacted and submitted to
Negosyo Centers and/or the DTI Official Website.
Funds can only be collected in Negosyo Centers and will be disbursed through:
2.3 The funding for the implementation of the program shall be sourced from the
applicable budgets of concerned agencies and such other source to be identified by
the Department of Budget and Management. The implementation of program under
may also be applied for funding under the MSMED Council.
3.2 For businesses who are prepared to open during GCQ measures, these
guidelines must be followed:
4.) Regulations
4.1 THIS SECTION ARE FOR THOSE WHO COUNTERFEIT CERTIFICATIONS AND
OTHER FALSIFIED DOCUMENTS ONLY. The Department of Finance (DOF) has
issued a public statement involving instances Involving the issuance of
counterfeit certifications and other falsified documents. These documents
bear unverified information masked in forged signatures of DOF officials and
counterfeit seal of Philippine Departmental agencies.
Forgery. A person signs in another’s name with the intent to defraud; Art.
170. Falsification of legislative documents. — The penalty of prision
correctional in its maximum period and a fine not exceeding P6,000 pesos
shall be imposed upon any person who, without proper authority therefor
alters any bill, resolution, or ordinance enacted or approved or pending
approval by either House of the Legislature or any provincial board or
municipal council.
Penalties. Any person who commits any of the acts shall be punished with
imprisonment of not less than six (6) years and one (1) day but not more
than twelve (12) years, and a fine not less than Fifty Thousand pesos (P
50,000.00) but not more than Five Hundred Thousand pesos (P
500,000.00).
Sources:
Website
Charm Villalon. “What Filipino Entrepreneurs Should Know about the Go Negosyo Act (Republic
2020.
Lorenciana, Carlo. “Cebu Capitol Processes MSMEs Aid Online.” @pnagovph, Philippine News
www.philstar.com/the-freeman/cebu-business/2019/06/04/1923530/central-visayas-
“REGION VII (Central Visayas) | National Wages Productivity Commission.” Dole.Gov.Ph, 2020,
“Small Business Wage Subsidy (SBWS) Program.” Grant Thornton Philippines, 2020,
www.grantthornton.com.ph/newsroom/technical-alerts/outsourcing-alerts/2020/Small-
“The Role of the Department of Trade and Industry (DTI) in SME Development - Jqnomics.”
UP ISSI - Diliman. “Uplifting Micro, Small, and Medium Enterprises (MSMEs) in the Philippines
Thru DTI’s 7Ms: Suggested Policies for Implementation | Institute for Small-Scale
beta.entrepreneurship.org.ph/2020/02/21/uplifting-micro-small-and-medium-
enterprises-msmes-in-the-philippines-thru-dtis-7ms-suggested-policies-for-
fertilizer-1019555985/?t-id=o-2XL2nFhL_1600972894066&t-
Savings of Sprinkler Systems.” California Agriculture, vol. 50, no. 1, 2013, pp. 11–18,
Sept. 2020.
Neil Arwin Mercado. (2020, May). DTI to recommend ‘gradual’ reopening of dine-in restaurants
gradual-reopening-of-dine-in-restaurants-during-gcq