Finance Secretary Carlos Dominguez III has recommended the adoption of three imperatives centered on digitalization and patterned after the successful Small Wage Subsidy Program (SBWS) implemented earlier by the Department of Finance (DOF) and Social Security System (SSS) to ensure the efficient and corruption-free distribution of future emergency subsidies among the targeted beneficiaries.

These three imperatives are: 1) digitalization of the entire process from application to distribution of the subsidy 2) direct distribution of the aid through banks or electronic payment channels; and 3) adoption of close administrative oversight of the program, which includes tapping the expertise of the private sector to iron out possible implementation hitches as quickly as possible, Dominguez said.

Dominguez recommended these three imperatives, which, he said, had made the SBWS “largely efficient and effective,” during the meeting of President Duterte with selected members of the Cabinet in Davao City on Monday night. Portions of the meeting were televised and streamed online this morning.

“That’s why we took the lessons here (from the SBWS program) at pinasok ho namin sa Bayanihan 2 law na as much as possible lahat ng tulong sa tao, give it through the banks, to MLhuillier (remittance center) so no cash is handled, as little as cash as possible. So walang mangungupit, walang nawawala,” Dominguez said, referring to the proposed Bayanihan To Recover As One Act that was already ratified by both chambers of the Congress and is now up for the President’s signature.

President Duterte endorsed Dominguez’s recommendations and said these “will lessen corruption” in the distribution of financial aid to beneficiaries in the future.

“Ang maganda kasi dito wala ng transaction na may tao-tao. Puro makina na lang at diretso na sa …. ang pinaka-importante dito ay yong paglagay sa ….paghulog sa bangko ng gobyerno diretso ito sa empleyado. There is no intermediary and there is no intervention of any kind lalo na tao, diretso sa inyo,” the President said during the meeting.

In his report to the President, Dominguez said that by automating and digitalizing the SBWS–and with manual processing kept to a minimum–the government was able to efficiently and quickly distribute a total of P46 billion to 3.1 million employees of small businesses affected by the work stoppages resulting from the Luzon-wide enhanced community quarantine (ECQ) and other similar containment measures to prevent the further spread of COVID-19.

The SBWS was implemented with the applicant-beneficiaries having zero face-to-face contact with government employees handling this subsidy for displaced workers of COVID-affected small businesses.

This system not only reduced corruption, but it also minimized health risks that come with physically applying for the subsidies and distributing them to the beneficiaries amid the COVID-19 outbreak, Dominguez said.

“We think all subsidy programs in the future should be digitized. In other words, go through digitalization of all transactions. And number two, the direct distribution of aid should be through banks or e-wallet accounts of the intended beneficiaries,” Dominguez said during the meeting.

“And one of the most important factors that made this a relatively successful program, is close administration oversight of the critical steps of the program,” he added.

Dominguez said that as a result of digitalization, employees started receiving their subsidies on April 30, a day before the announced schedule of the payouts.

The Bureau of Internal Revenue (BIR) worked in tandem with the SSS, which had a computerized system in place, to verify the submissions of employers for their workers’ applications for wage subsidies, Dominguez, who chairs the Social Security Commission (SSC), said.

After verification of the qualified applicants, the subsidies were directly credited to the accounts of the beneficiaries, either through their bank accounts, Paymaya accounts or sent through the government’s private sector partner, MLhuillier, for cash pickup.

Within two weeks of the application deadline, almost all of the first tranche of the wage subsidy had already been credited to the accounts of the beneficiaries or sent through MLhuillier. The SSS informed beneficiaries via text message when their subsidy was ready for pickup.

As a result of this direct distribution method, every SBWS beneficiary was ensured that he or she received the full amount of the subsidy.

Those who had not yet received the subsidy within the deadline were beneficiaries with incorrect bank account or cellphone numbers (for PayMaya or cash remittance) or other invalid data. Employers and employees were given detailed instructions on how to submit corrections.

On June 9, around a month after the application deadline, payouts for both tranches of of the two-month wage subsidy were at 96.5 percent completion, with the remainder consisting of special cases, such as beneficiaries whose employers had yet to provide updated account numbers.

Another key feature of the SBWS that Dominguez recommended for adoption in future subsidy programs is the “close and regular administrative oversight” of the program to quickly anticipate potential problems or causes of implementation delay.

Dominguez said that officials of the DOF, BIR, SSS and the Development Bank of the Philippines (DBP), which was tasked to transfer the subsidies to the accounts of the beneficiaries, met two or three times a day for updates on implementation progress, to anticipate potential snags and quickly identify solutions to these problems or other emerging concerns.

Tapping the expertise of the private sector or adding manpower and other resources when needed, complemented this close monitoring of the program’s milestones to ensure that problems were resolved as quick as possible, Dominguez said.

In this case, Dominguez said the government brought in experts from Microsoft to iron out kinks in the online application process and sought the assistance of Union Bank of the Philippines (UBP) and MLhullier to speed up the distribution of the cash aid to employees.

“So you have a problem, bring in the private sector to help you. And you can solve it very quickly. But importante ho yong management, that every day you are on top of the situation. Do not let any problem grow big. Kasi pag malaki na, mahirap ng i-correct,” Dominguez said.

Jointly implemented by the DOF, BIR and SSS, the P46-billion SBWS program provided wage subsidies for two months to small-business employees in amounts ranging from P5,000 to P8,000, depending on the prevailing minimum wage rates in their place of work.

The SBWS program was launched on April 16, 2020.

The application period ran from April 16 to May 8. A total of 113,449 employers were able to successfully apply for the program and more than 3.1 million employees had received the subsidy.

Taking advantage of available technologies and the electronic databases of SSS and BIR, the implementing agencies were able to accurately target intended beneficiaries and quickly distribute the subsidy to millions of beneficiaries who had zero face-to-face contact with government employees handling the SBWS.

Each step of the application process was digitally enabled, taking advantage of the technological tools government agencies and beneficiaries were already using.

Employers who applied for the subsidy on behalf of their employees verified whether their businesses were pre-qualified using a secure page on the BIR website.

From this BIR page, pre-qualified employers then retrieved a passcode, which was used to proceed with the application through one of three online methods. Redundancy in application processes was an integral feature of the implementation strategy.

The computerized system of the SSS then verified the submissions against SSS records and the program criteria.

Once this verification process was completed, the names and details of eligible employees were sent electronically via Secure File Transfer Protocol (SFTP) to the DBP for payout through PESONet partner banks, PayMaya, and MLhuillier.

Deduplication efforts for overlaps with the Department of Labor and Employment (DOLE)’s COVID-19 Adjustment Measures Program (CAMP) in the receipt of subsidies were also done electronically and with the help of data cleaning and matching experts.

The bulk of the matching between DOLE CAMP’s list of around 680,000 beneficiaries and the SBWS list of 3.1 million beneficiaries was completed in only 5 days because of the automated procedures designed by data scientists.

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