Albay Rep. Joey Sarte Salceda, chair of the House Ways and Means Committee, filed a bill that would provide a range of broad support to online firms which he refers to as “saviors of the COVID-19 economy.”
The support comes in the form of loans and grants, training and registration assistance.
House Bill No. 7698, or the Online Small Enterprise Support Services Act of 2020, proposes that online businesses with less than P1 million in annual sales get cheap loans from government banks, free credit reports, grants and training from the Technical Education and Skills Development Authority and other benefits and assistance.
“Small online businesses are the saviors of the COVID-19 economy. We would see far more unemployment and far more poverty if Filipino households did not turn to small online businesses,” he said.
The lawmaker said that “online businesses have sprung up over the past few months because of COVID-19. Regrettably, many of them are still unregistered. Instead of punishing them for simply trying to make a living, my approach is to make registration worth it.”
“If you’re a small online business, you serve the economy, whether registered or not, but we will offer generous benefits if you register and pay taxes. It’s a fair and humane deal,” he said.
Salceda is also the author of the Digital Economy Taxation Act, which targets large digital corporations to help fund COVID-19 efforts and improve the digital economy.
“The digital economy is the future. That is why we are already laying the building blocks for a strong digital economy. If we delay these reforms, we will face painful consequences as this segment of economy continues to grow,” he said.
Salceda’s HB 7698 aims to provide adequate capital and credit access for individuals seeking to operate small online enterprises by mandating government banks to offer small business loans at competitive rates and by providing small online businesses with free credit reports and credit scores.
It also aims to facilitate the registration and operation of such enterprises and streamline government support services relevant to their needs by creating a small online business one-stop portal for all support services. The bill also sets up an Online Negosyo Center.
The bill will also assist small online enterprises adapt to new trends and developments in the digital space by mandating TESDA to provide training programs on marketing, supply chain management, packaging, maintenance of online selling spaces, consumer relations, laws and regulations on online selling, and other aspects of online entrepreneurship. Grants will also be given to displaced workers and other sectors in need, upon completing the TESDA training programs.
The measure mandates the Department of Information and Communication Technology and the Department of Trade and Industry to help existing businesses migrate to the online space.
It also proposes the creation of online enterprises among rural communities by mandating the Agricultural Credit Policy Council to create and develop a credit facility for farmers seeking to become small online entrepreneurs specializing in agricultural products.
The bill also asks the Department of Agriculture to help farmers and fisherfolk find direct market access online, and, if they should want to, become online entrepreneurs themselves.
“It’s a comprehensive range of services designed to help Filipinos who have found employment in the digital economy. It’s a gift that we can find a sector where we can create jobs in the middle of an economic crisis,” he said.
Citing the April 2020 Labor Force Survey, Salceda said the class of workers the survey calls “self-employed without any paid employee,” are saving the economy. “In fact, as a share of the labor force, 28.7 percent of all workers in April 2020 were from this class of worker, up from 27.3 percent in April 2019,” he said.
“In practical terms, the ‘self-employed without any paid employee’ are primarily the online entrepreneurs, who have initiated new online businesses, via social media and other platforms. In fact, during the quarantines, many micro-firms proved resilient. According to the ADB Philippine Enterprise Survey on COVID-19 Impact, about 44 percent of businesses fully open were micro-enterprises, while only 25.5 percent were small businesses, 17 percent were medium, and 13 percent were large,” Salceda said.