Commission on Audit (Philippines), Performance Audit Report PAO-2023-03, "Small Business Wage Subsidy (SBWS) Program" (Internet Archive copy of Aug. 8, 2024)
Summary
Performance Audit Report PAO-2023-03 of the Commission on Audit of the Philippines, dated September 2023, on the Small Business Wage Subsidy (SBWS) Program. The report states that the Department of Finance initiated the program on April 16, 2020 through the Bureau of Internal Revenue and the Social Security System, funded under Republic Act No. 11469 with a total allocation of ₱51 billion. It finds that wage subsidies amounting to ₱45.1 billion, or 89 percent of the budget, were released, and that 3.1 million of the 3.4 million target employees received subsidies from April 29, 2020, to June 25, 2020. Its headline finding is that a substantial number of target beneficiaries under the non-essential category were not served due to implementation issues.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Archived web capture. Preserved source — captured from www.coa.gov.ph; archived 2026-09-30.
Cite this document
“Commission on Audit (Philippines), Performance Audit Report PAO-2023-03, ‘Small Business Wage Subsidy (SBWS) Program’ (Internet Archive copy of Aug. 8, 2024).”
Original at www.coa.gov.ph. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/commission-on-audit-philippines-performance-audit-report-pao-2023-03-s-e6a4fb8d0a/
, SHA-256 2f73b3ecbaa44da11a11ad17a3ada129bfa012f4b9f8c2f4f4c1484faa1e5b94.Full text
Performance Audit Report
PAO-2023-03
SMALL BUSINESS WAGE
SUBSIDY (SBWS) PROGRAM
The SBWS Program Accorded
Immediate Relief to 3.1 million
Employees during Lockdowns but a
Substantial Number of Target
Beneficiaries under Non-essential
Category were not Served due to
Implementation Issues that Impacted
on the Attainment of Program’s
Objective
Audit September 2023
Highlights Small Business Wage-Subsidy Program
The SBWS Program Accorded Immediate Relief to 3.1 million
Why COA Did This Study Employees during Lockdowns but a Substantial Number of Target
Beneficiaries under Non-essential Category were not Served due to
The global economy was significantly impacted by the outbreak of Implementation Issues that Impacted on the Attainment of
the COVID-19 pandemic in early 2020. In response, the Philippine Program’s Objective
government declared a nationwide state of calamity and enforced
the Enhanced Community Quarantine (ECQ). Similarly, the What COA Found
Department of Finance (DOF) recognized that the community
quarantines affected 5.8 million employees from the formal economy The SBWS Program aims to provide immediate relief to employees in the
sector. formal economy sector affected by the imposition of the enhanced
community quarantine to address the COVID-19 public health
emergency. The use of digital platform facilitated the processing of
On April 16, 2020, the DOF initiated the Small Business Wage applications and timely release of wage subsidies amounting to ₱45.1
Subsidy (SBWS) Program through the Bureau of Internal Revenue billion or 89 percent of the allocated budget of ₱51 billion. Out of the 3.4
(BIR) and the Social Security System (SSS). This program aimed to million target number of employees, a total of 3.1 million or 91 percent
support formal economy sector businesses and their employees received wage subsidies from April 29, 2020, to June 25, 2020.
affected by the COVID-19 pandemic. The SBWS Program, funded Nevertheless, critical challenges in the program implementation affected
by Republic Act No. 11469, commonly called the “Bayanihan to Heal the efficiency and effectiveness of the program.
as One Act,” received a total allocation of ₱51 billion, intended to
provide wage subsidies to approximately 3.4 million impacted Budget Utilization of the Program
employees.
This audit seeks to evaluate the economy, efficiency, and
effectiveness of the Program by examining the following: (1) the
extent to which program implementers met the goals and objectives
of the SBWS Programs for the formal economy sector; (2) the
challenges, if any, impacting the efficient and timely implementation
of the programs; and (3) the extent to which the implementing
agencies ensured proper administration of the financial assistance/
wage subsidy program.
COA reviewed relevant laws, regulations, rules, and memoranda to
ascertain the program's purpose, objectives, and goals. COA
interviewed officials from the DOF, BIR, and SSS Program
managers. To validate reports on program awareness, eligibility, and
subsidy distribution, COA also interviewed employers of
establishments that applied for the program and surveyed SBWS
Program beneficiaries from specified business establishments. Source: SSS SBWS Program Liquidation Report as of April 30, 2022
Finally, COA conducted interviews and online application process
walkthroughs for the program. The program’s target to reach out and help affected employees in the
small businesses, whose businesses did not full operate during
What COA Recommends lockdowns, fell short by 41 percent or about 717,442 employees. On the
other hand, the program had fully served the target number of employees
Although the SSS implemented swiftly the SBWS Program for in the quasi-essential businesses with skeletal force and even exceeded
impacted formal economy sector employees during the pandemic, a by 25 percent or 412,077 employees. Moreover, the program did not
similar situation may occur in the future, and similar measures will cover the employees belonging to the essential categories affected by the
be undertaken. Therefore, COA recommends that SSS in imposition of community quarantine. The SSS confirmed that one of the
coordination with DOF and BIR: (1) conduct risk assessment to factors affecting the attainment of the target was information
identify potential problems and develop appropriate strategies and dissemination.
mitigating measures to address them; (2) revisit and improve the
identification process of target beneficiaries to ensure that all The online application system facilitated the program implementation.
affected employees receive equal opportunity to apply to the However, there were gaps and limitations noted in the data entry and
program; (3) enhance the system used in SBWS Program to verification and payout processes causing delay in the payment of wage
consider incorporating among other, features on preventive subsidy. At the onset, no official or employee checks the initial data inputs
validation controls on data entry of applications, processing, of encoders such as the employees’ name, TIN, bank account and mobile
approval and payout of wage subsidies; use of national ID system number. Subsequently, SSS instituted procedures for validation and
and the SSS UMID ATM cards for efficient verification and payouts; correction, but time constraints in the program implementation pre-
data sharing of compatible databases from different programs and empted the full validation and correction of data. The incomplete and
mechanism readily accessible to beneficiaries on the verification of invalid information of employees resulted in the payment of ₱1.92 billion
status of applications and payouts (4) formulate and implement to 132,506 beneficiaries with duplicate/invalid TIN, and unclaimed
robust information campaign for effective dissemination of program payouts for 77,167 and 17,205 beneficiaries in remittance centers and
materials and announcements; and (5) enhance the process on bank accounts, respectively. The absence of reliable databases of
voluntary return of wage subsidies from ineligible beneficiaries. program beneficiaries for verification and matching purposes caused
incorrect tagging in the processing of applications. Also, delayed release
On the other hand, to ensure that program funds have been and unsuccessful payouts defeats the objective of providing immediate
relief to the intended employee beneficiaries.
appropriately utilized and only eligible beneficiaries received the
wage subsidies, COA recommends that SSS in coordination with
Further, the implementation challenges and short timeframe to implement
DOF and BIR should identify the ineligible beneficiaries through the program; the ₱6.7 billion unsuccessful/rejected payouts and the return
post-implementation verification of TINs and take necessary steps of ₱5.7 billion to the Bureau of the Treasury impacted on the effectiveness
for the immediate recovery of the wage subsidies provided to and efficiency of the SBWS Program.
ineligible beneficiaries.
Small Business Wage Subsidy Program
Contents
Contents
Background ................................................................................................... 3
What is SBWS Program? .............................................................................. 3
Budget Formulation ....................................................................................... 4
Challenges faced in achieving 91 percent of the 3.4 million targeted
beneficiaries .................................................................................................. 7
Automated payouts aided the distribution of ₱45 billion in subsidies to 3.1
million beneficiaries ....................................................................................... 8
Under the non-essential small businesses, 41 percent of the targeted
employees' beneficiaries were not served ................................................... 12
Inaccurate information resulted in the distribution of ₱1.92 billion in wage
subsidies to beneficiaries with duplicate/invalid TIN. ................................... 15
Complicated payout processes delayed the release of ₱109 million wage
subsidies ..................................................................................................... 17
Immediate program implementation resulted in inaccurate and
unsuccessful wage subsidy distribution and a lack of corrective
processes .................................................................................................... 22
Challenges in cross-matching of SBWS Program applicants and CAMP
beneficiaries caused incorrect tagging ........................................................ 22
Online application system did not have effective control to prevent input of
partial and invalid data entry ....................................................................... 26
Return of wage subsidies were not properly accounted for and reported .... 31
Procedures for involuntary return of wage subsidy were not performed ...... 33
After implementation, program implementers reported ₱6.7 billion of
unsuccessful payout and returned ₱5.7 billion to BTr ............................. 37
₱5.7 billion funds for the program were returned to BTr .............................. 37
₱6.7 Billion wage subsidy payouts not successfully received by intended
beneficiaries ................................................................................................ 39
Conclusions ................................................................................................. 44
Recommendations ...................................................................................... 46
Agency Comments ...................................................................................... 48
Appendix I: Objectives, Scope and Methodology ..................................... 49
Appendix II: Application System Developed for the Program .................. 51
Appendix III: SBWS Program Key Implementers ...................................... 52
Appendix IV: SBWS Program Process Flow.............................................. 53
Appendix V: Result of Survey on Employer of Program Beneficiaries ... 54
Appendix VI: COA Contact and Staff Acknowledgments ......................... 55
Page i PAO-2023-03
Small Business Wage Subsidy Program
Contents
List of Tables
Table 1: Fiscal cost of SBWS Program for two months (Amount in Billion
Pesos) ............................................................................................................ 4
Table 2: Amelioration Programs Comparison ............................................. 5
Table 3: Wage Subsidy Amount per Region ................................................ 6
Table 4: PSIC Codes of Eligible Employers ............................................... 10
Table 5: Target vs. Actual Number of Beneficiaries.................................. 12
Table 6: Affected Employers and Employees per Category ..................... 13
Table 7: SBWS Program Communication Materials.................................. 14
Table 8: Disqualified Employees as at June 25, 2020 ............................... 16
Table 9: Duplicate TIN/Invalid TIN as at November 15, 2021 .................... 17
Table 10: Wage Subsidy Payouts After the Deadline................................ 19
Table 11: Eligible Employees Allowed to Receive Payout Beyond June
25, 2020 ........................................................................................................ 19
Table 12: Beneficiary Classification/Status of Payout .............................. 30
Table 13: Breakdown of Voluntary Returns to BTr ................................... 32
Table 14: Amount Rejected/Unsuccessful as at April 30, 2022 ................ 38
Table 15: Estimated Number of employees that can benefit from the
returned amount ......................................................................................... 39
Table 16: Unsuccessful Payout based on SBWS Program Database ...... 40
Page ii PAO-2023-03
Small Business Wage Subsidy Program
Contents
List of Figures
Figure 1: Payout Distribution of Subsidy ................................................... 9
Figure 2: Businesses Allowed to Operate During First ECQ (March 15 to
April 14, 2020) .............................................................................................. 11
Figure 3: CAMP 1 vis-à-vis SBWS Program Timeframe ............................ 24
Figure 4: Beneficiaries with contact number issues as at June 20, 2022 28
Figure 5: Unclaimed Wage Subsidies Due to Invalid Contact Information
and Incorrect Bank Accounts .................................................................... 28
Figure 6: Manner of notification on Application Status to Beneficiaries . 29
Figure 7: Who is required to return the subsidy ....................................... 31
Figure 8: Rejected or Unsuccessful Credits of wage subsidies to
beneficiaries’ accounts ............................................................................... 35
Figure 9: Program Budget Utilization......................................................... 38
Figure 10: SBWS Progarm Queries ............................................................ 42
Page iii PAO-2023-03
Small Business Wage Subsidy Program
Acronyms
4Ps Pantawid Pamilyang Pilipino Program
ATM Automatic Teller Machine
BARMM Bangsamoro Autonomous Region in Muslim Mindanao
BIR Bureau of Internal Revenue
BPO Business Processing Outsourcing
BTr Bureau of Treasury
BSP Bangko Sentral ng Pilipinas
CAMP COVID-19- Adjustment Measures Program
CHED Commission on Higher Education
COA Commission on Audit
COBIT Control Objectives for Information Technologies
COVID-19 Coronavirus Disease 2019
CY Calendar Year
DBM Department of Budget and Management
DepEd Department of Education
DOF Department of Finance
DOLE Department of Labor and Employment
DOT Department of Tourism
DSA Data Sharing Agreement
DSWD Department of Social Welfare and Development
ECQ Enhanced Community Quarantine
E.O. Executive Order
ESP Emergency Subsidy Program
FAQS Frequently Asked Questions
IATF Inter-Agency Task Force
ICSPPS Internal Control Standards for the Philippine Public
Sector
ISSAI International Standards of Supreme Audit Institutions
IT Information Technology
ITMG Information Technology Management Group
JMC Joint Memorandum Circular
LBP Land Bank of the Philippines
LGU Local Government Unit
MECQ Modified Enhanced Community Quarantine
NCR National Capital Region
PAO Performance Audit Office
PD Presidential Decree
PSA Philippine Statistics Authority
PSIC Philippine Standard Industrial Classification
RA Republic Act
SAP Social Amelioration Program
SBWS Small Business Wage Subsidy
SFTP Secure File Transfer Protocol
SMS Short Messaging Service
SPTF SBWS Program Task Force
SSS Social Security System
TESDA Technical Education and Skills Development Authority
Page iv PAO-2023-03
Small Business Wage Subsidy Program
Acronyms
TIN Tax Identification Number
UMID Unified Multi-Purpose ID
URL Uniform Resource Locator
Page v PAO-2023-03
Small Business Wage Subsidy Program
REPUBLIC OF THE PHILIPPINES
Commonwealth Avenue, Quezon City
September 25, 2023
Mr. ROLANDO L. MACASAET
President and Chief Executive Officer
Social Security System (SSS)
East Avenue, Diliman, Quezon City
Dear President and CEO Macasaet:
The Commission on Audit (COA) conducts performance audits to assist
government agencies in better performing their mandates and achieving
program goals and objectives more economically, efficiently, and effectively, in
line with its vision of becoming an enabling partner of the government in ensuring
a better life for every Filipino. In this regard, the Commission has identified the
Small Business Wage Subsidy (SBWS) Program as one of the priorities to be
audited.
With the COVID-19 pandemic in the Philippines in 2020, the government
imposed a community quarantine to contain the spread of the virus, forcing some
businesses to close temporarily or permanently. Consequently, the Philippine
Statistics Authority (PSA) announced a record-high unemployment rate of 17.70
percent in April 2020, accounting for 7.30 million1 Filipinos, up from 5.30 percent
in January 20202.
Following Republic Act No. 11469 and in partnership with the Department of
Finance (DOF) and the Bureau of Internal Revenue (BIR), the SSS implemented
the SBWS Program in response to the negative impact of the pandemic on
formal sector employees. The program provides a wage subsidy of ₱5,000 to
₱8,000 per month for two months to complement the social amelioration
programs under the Bayanihan to Heal as One Act by providing targeted support
to formal sector employees and employers.3
The audit focused on three aspects of the Program: (1) the extent has the
program implementers met the goals and objectives of the SBWS Program for
_______________________________________________________________
1
Philippine Statistic Authority (PSA), Employment Situation in April 2020, available at
https://psa.gov.ph/content/employment-situation-april-2020 (last accessed: July 28, 2022)
2
PSA, Employment Situation in January 2020 available at https://psa.gov.ph/content/employment-situation-
january-2020
0#:~:text=SUMMARY%20STATISTICS&text=b)%20Employment%20rate%20in%20January,42.5%20million
%20total%20employed%20persons (last accessed: July 28, 2022)
3 Bayanihan to Heal As One Act, Republic Act No. 11469, par. 2 p.1
Page 1
PAO-2023-03
Small Business Wage Subsidy Program
the formal economy sector; (2) the challenges, if any, impacting the efficient and
timely implementation of the programs; and (3) the extent has the implementing
agencies ensure proper administration of the financial assistance/ wage subsidy
program.
This audit was carried out from June 2021 to July 2022. We reviewed significant
program policies, joint memoranda circulars, resolutions, accomplishment
reports, and the program’s database during this period. We also conducted
surveys and interviews with selected employer and employee beneficiaries, as
well as interviews and online process walkthroughs with key officials and
stakeholders of the program to assess the extent of coordination and the roles
of partner agencies.
The audit was conducted according to the International Standards of Supreme
Audit Institutions (ISSAI) 3000 - Standard for Performance Auditing. We believe
that the processes we executed during the audit provided sufficient and
appropriate evidence that served as a reasonable basis for our audit findings
and conclusion based on audit objectives.
Page 2
PAO-2023-03
Small Business Wage Subsidy Program
Background 1. In response to the sudden increase in COVID-19 cases nationwide,
former President Duterte imposed the Extended Community Quarantine (ECQ)
across the entire island of Luzon for specific high-risk locations from March 17
to April 13, 2020, with an extension to May 31, 2020.4 Following the
implementation of ECQ, the number of unemployed Filipinos in the labor force
increased from 5.3 percent or 2.4 million in January 2020 to 17.7 percent or 7.3
million in April 2020.5
2. Republic Act (R.A.) No. 11469, also known as the “Bayanihan to Heal as
One Act of 2020” (Bayanihan Act 1), was signed into law on March 24, 2020.
With the passage of the law, the Department of Social Welfare and Development
(DSWD) ensured the provision of safety nets and the implementation of Social
Amelioration Programs (SAPs) and services that subsidized the provision of
necessities and served as a tool for the recovery and rehabilitation of the most
affected families and individuals.6 Beneficiaries of DSWD’s SAP are low-income
households, individuals in the subsistence economy, and employees in the
informal economy.7 For one of the essential SAPs, the Emergency Subsidy
Program (ESP), beneficiaries receive a subsidy ranging from ₱5,000 to ₱8,000
based on the proportion of minimum wage rates in each region.8
3. On April 14, 2020, the President of the Philippines approved the SBWS
Program to complement the SAP and provide wage subsidies to formal sector
employees. SSS, DOF, and BIR issued Joint Memorandum Circular No. 001-
2020 on April 28, 2020, to outline implementation guidelines for the SBWS
Program.
What is SBWS 4. The SBWS Program is a joint undertaking of the SSS, DOF, and BIR to
Program? provide financial assistance of ₱5,000 to ₱8,000 for up to two months to
employees in the formal economy sector who were unable to work due to the
temporary closure of businesses affected by the ECQ and other forms thereof
imposed in Luzon and other parts of the country in response to the COVID 19
public health emergency.9
_______________________________________________________________
4 IATF Resolution No. 37 Series of 2020. (2020, May 15).
5 PSA. (2020, June 5). Employment Situation in April 2020. Retrieved from
https://psa.gov.ph/content/employment-situation-april-2020. (last accessed June 15, 2022)
6 DSWD. (2020, March 30). MC-2020-04 Special Guidelines on the Provision of Social
Amelioration Measures by the Department of Social Welfare and Development to the Most
Affected Residents of the Areas under Community Quarantine and Continuation of the
Implementation of the Social Pension for Indigent Senior Citizens and the Supplementary Feeding
Programs. Pp. 1-2.
7 Ibid. p. 8.
8 Ibid. p. 5.
9 DOF-SSS-BIR Joint Memorandum Circular No. 001-2020, April 28, 2020, §1, pp. 1-3
Page 3
PAO-2023-03
Small Business Wage Subsidy Program
Budget Formulation 5. As indicated in Table 1, on April 20, 2020, the Office of the President
approved the funding for the SBWS Program for ₱51 billion, including
administrative expenditures of ₱200 million. The ₱51 billion budget was based on
the determined 3.4 million beneficiaries. The Bureau of Treasury (BTr) should
have deposited the fund into the SSS depository account at the Land Bank of the
Philippines (LBP),10 however, the BTr and SSS subsequently opted to change the
SSS depository account to the Development Bank of the Philippines (DBP).11
Table 1: Fiscal cost of SBWS Program for two months (Amount in Billion
Pesos)
Category A Category B
Category C
(Non- (Quasi- Total
(Essentials)
essentials) essentials)
Examples Markets, Food
Mall, Other BPO, other
manufacturing,
retail manufacturing
and delivery
IATF Order Can operate
Forced to Can fully
with a skeletal
Closed operate
workforce
Fiscal cost for
employees in
19.9 18.4 Not Included 38.3
the alpha list
(primary)
Fiscal cost for
employees not
in the alpha list 6.5 6 Not Included 12.5
(secondary)
Total fiscal cost
26.4 24.4 Not Included 50.8
for two months
Total
administrative - - - 0.2
cost
Total SBWS
51.0
Program Cost
Source: Memorandum to the President DOF SBWS Program Proposal submitted to the
President
6. Through the SSS, the DOF rolled out the SBWS Program on April 16,
2020, following the DSWD’s SAP and DOLE’s COVID-19 Adjustment Measures
Program (CAMP). A comparison of these programs is shown in Table 2.
_______________________________________________________________
10 Memorandum of Agreement Bureau of Treasury and Social Security System. (2020, April 20)
11 Amendment to MOA BTr and SSS. (2020, April 28).
Page 4
PAO-2023-03
Small Business Wage Subsidy Program
Table 2: Amelioration Programs Comparison
PARTICULARS SAP-ESP CAMP 1 SBWS CAMP 2
Agency/ies DSWD, LGU DOLE DOF, BIR, SSS DOLE-DOT-DepEd-
CHED-TESDA
Target Low-income Employees in the Small business Same Targeting from
Beneficiaries households Formal Economy employees CAMP-1 with the
belonging to the Sector affected by affected by the inclusion of the
informal sector Flexible Work ECQ Education and
Arrangements or Tourism Sectors as
temporary beneficiaries
closures during the
pandemic
Target Numbers 18 million low- 657,201 affected 3.4 million small 851,000-Regular
income households formal employees business 600,000- Tourism
employees 59,000 -Education
Budget ₱200 billion ₱3.286 billion ₱51 billion ₱7.5 billion
Amount of ₱5,000 - ₱8,000 ₱5,000 ₱5,000 - ₱8,000 ₱5,000
Subsidy
Number of 2 1 2 1
Tranches
Source: COA Analysis
7. Small Business Employers. The SBWS Program intends to assist the
employees of small businesses impacted by the ECQ, which the DOF classified
into three categories: Category A (Non-essentials), Category B (Quasi-
essentials), and Category C (Essentials).12 Only Category A and Category B
small businesses may apply for wage subsidies for employees who could not
work and were not paid. Category C businesses are considered unaffected by
the ECQ because they can remain open during the quarantine period. In contrast
to Category A and B businesses, the IATF Guidelines and government orders
do not restrict the commercial activities of Category C businesses.
8. Wage Subsidies. The SBWS Program followed the provisions of the
Bayanihan Act 1 in providing financial assistance in two tranches ranging from
₱5,000 to ₱8,000. The Program considered the time businesses were closed
due to community quarantines. At the time of planning, establishments were
expected to remain shuttered until May 2020. The subsidy shall be calculated
based on the regional minimum wage rate. (see Table 3)
_______________________________________________________________
12 Category A (non-essentials) are small businesses that are forced to close down. Category B
(quasi-essentials) are those allowed to operate a skeleton force. Category C (essentials) are
those allowed to operate during ECQ
Page 5
PAO-2023-03
Small Business Wage Subsidy Program
Table 3: Wage Subsidy Amount per Region
Monthly wage Monthly wage
Region subsidy per worker Region subsidy per worker
(pesos) (pesos)
NCR 8,000 VII 6,000
CAR 5,500 VIII 5,000
I 5,500 IX 5,000
II 5,500 X 6,000
III 8,000 XI 6,000
IV-A 8,000 XII 5,000
IV-B 5,000 CARAGA 5,000
V 5,000 BARMM 5,000
VI 6,000
Source: DOF-SSS-BIR Joint Memorandum Circular 2020-01
9. The subsidy amount provided in each tranche was based on the SAP per
region, with adjustments made for Regions III and IV-A due to the prevalent
daytime migration of residents in these areas to NCR for employment. However,
the ₱5,000 received by an employee beneficiary under CAMP 1 will be deducted
from the pay subsidy in the second tranche. Hence, employees from regions IV-
B, V, VIII, IX, XII, CARAGA, and BARMM with a minimum wage subsidy rate of
₱5,000 who have previously received financial support from CAMP 1 will not be
eligible for tranche 2 of the SBWS Program.
10. Following the Bayanihan Act 1 prohibiting undue claims for financial
assistance, only beneficiaries of the DOLE CAMP were considered for the
SBWS Program, as CAMP 1 and the SBWS Program covered the same formal
sector participants. However, some programs such as SAP-ESP, had a distinct
set of requirements that targeted low-income households in the informal sector.
11. DOF uses data from various government agencies and surveys, from the
PSA. DOF estimated that there were 5.9 million employees in the formal
economy sector, of which 1.77 million were classified as non-essentials or
Category A, 3.28 million employees belonged to Category B or quasi-essential
businesses, which can operate with a reduced workforce, and Category C were
essentials businesses that could operate at full capacity during the pandemic.
During the planning phase, the DOF estimated that 100 percent of employees in
the non-essential category would be affected by the business closure due to the
pandemic, while 50 percent of employees in the quasi-essential category,
totaling 1.64 million, would be affected. Employees in the essential category are
excluded, as they can continue to work during the pandemic. There were a total
of 3.4 million affected employees in the formal sector.
Page 6
PAO-2023-03
Small Business Wage Subsidy Program
Challenges faced
in achieving 91
percent of the 3.4
million targeted
beneficiaries
12. The SBWS Program was launched in response to a state national
emergency declaration due to the severe interruption of economic
operations caused by the COVID-19 pandemic. Using online application
processes, the program distributed ₱45.1 billion out of ₱51 billion to serve
3.1 million or 91 percent of its 3.4 million targeted beneficiaries in the
formal economy sector. Despite this, implementers encountered some
challenges, including the (a) non-coverage of industries under the
essential category affected by the implementation of ECQ; (b) failure to
reach 41 percent of the targeted non-essential small businesses; (c)
release of ₱1.92 billion to ineligible employees due to inaccurate
information; and (d) delayed release of ₱109 million wage subsidy.
13. The SBWS Program utilized the BIR and SSS databases to target
affected small businesses and their employees better. The program incentivized
small businesses that comply with tax regulations and mandated contributions
by utilizing the SSS and BIR systems.13 Accordingly, through online application
processes, the program was able to distribute ₱45.1 billion to 3.1 million
employee beneficiaries.
14. In selecting the prioritized target beneficiaries, the BIR pre-qualified the
small business employers based on the eligibility requirements outlined in the
program’s guidelines.14 Using the BIR Database, the BIR generated a list of pre-
qualified employers and sent it to the SSS for further pre-validation. With the
SSS automated system, the SSS validated the eligibility of the BIR-provided pre-
qualified employers.15 After validating the pre-qualified employers, the SSS pre-
validated the eligibility of the employees under the eligible employers.16
_______________________________________________________________
13 DOF Program Proposal - Memorandum for the President (2020, April 13). p. 5.
14 JMC 001-2020 requires, as far as BIR is concern, that the employers must be from industry
classified as Non-essential or Quasi-essential in view of the ECQ and other forms thereof, imposed
in Luzon and other parts of the country. The employers must be registered in the BIR and have
complied with tax obligation in the past three years, up to January 2020.
15 JMC 001-2020 requires the eligible employers to be registered in the SSS and must have paid
SSS contributions in the past three years, up to January 2020.
16 JMC 001-2020 requires that the employee must have no pending or settled SSS Unemployment
benefit and must have no unsettled or in-process SSS final claims (Funeral, Retirement, Death,
and Total Disability).
Page 7
PAO-2023-03
Small Business Wage Subsidy Program
15. To apply for the program, employers must check their pre-qualification
status on the SBWS Program Query Homepage on the BIR’s website.17 Next,
pre-qualified employers acquire a passcode that will be used on the SSS website
to apply for the program and apply their eligible employees via the My.SSS
portal.18 The employer must next submit the completed application e-form using
a secure portal emailed directly to the employer by the SSS or upload the
completed Microsoft Excel application form to sbws.gov.ph.
16. As at June 29, 2020, the SSS has received 173,564 employer
applications and approved 3.1 million employees, representing 91 percent of the
program’s target.19 Notwithstanding constraints on movement and face-to-face
interactions, the program was able to accommodate program applicants through
the use of the BIR and SSS databases and the digitization of the application
process. In addition, the digitization of the online process helped the program
reached 91 percent of its targeted beneficiaries. It reduced the health concerns
associated with its manual application as the conventional method of providing
financial assistance.
Automated payouts 17. As the Bayanihan Law requires, the program employed available
aided the technology to distribute wage subsidies directly to the preferred payout option
distribution of ₱45 of qualified beneficiaries, thereby eliminating interaction with other persons and
reducing the risk of contracting or transmitting COVID-19. In addition, employing
billion in subsidies
these technologies may help prevent potential irregularities in distributing
to 3.1 million financial assistance, as the intended beneficiaries will receive assistance
beneficiaries directly from program implementers.
18. The SBWS Program Task Force (SPTF) sought assistance from the DBP
to expedite the distribution of wage subsidies to eligible beneficiaries. As a result,
its payment facilities enabled the distribution of wage subsidies through
PESONet-accredited banks, remittance centers, and e-wallets.20
19. After processing the applications of small business employers, the SSS
must generate and transmit payment files to the DBP to process the wage
subsidy payments for approved beneficiaries. The wage subsidies will be
claimed following the employers’ chosen mode of payment21 during the
application.
20. As at April 30, 2022, the SBWS Program liquidation report indicates that
₱45.1 billion of the program’s budget was distributed to beneficiaries. As
_______________________________________________________________
17 The SBWS Program Homepage requires the employer’s TIN to be entered in its search box. A
green prompt will pop-up if the employer is qualified showing the business registered name and
an alphanumeric passcode. A red prompt will pop-up for unqualified or if wrong TIN is entered.
18 SSS, Member Login, available at: https://member.sss.gov.ph/, (last accessed June 15, 2022)
19 SBWS Program Task Force Report No. 71 (2020, June 29). p. 2.
20 Supplemental Agreement, SSS and DBP (2020, April 28).
21 Modes of payment (in partnership with DBP): 1. Withdrawal via employee’s SSS UMID; 2.
Withdrawal from employee’s bank account for PESONet participating banks; 3. Employee’s Union
Bank Quick Card (partnership with SSS); 4. Employee’s e-wallet (PayMaya); and 5. Cash pick-up
arrangement through M-Lhullier.
Page 8
PAO-2023-03
Small Business Wage Subsidy Program
illustrated in Figure 1, 63 percent, or ₱28.22 billion, were released to the
registered bank accounts of the beneficiaries. The remaining 34 percent and
three percent were distributed through remittance centers and e-wallets,
respectively.
Figure 1: Payout Distribution of Subsidy
Source: COA Analysis
21. Survey results indicated that 55 percent, or 304 out of 550 beneficiary
responses, indicated that the wage subsidy was used to purchase food during
the ECQ. 28 percent, or 158 responses, answered that it was used to pay utility
bills, while 13 percent, or 70 responses, stated that it was used to pay rent.
SBWS Program 22. The SBWS Program targeted small businesses affected by ECQ
did not cover restrictions; however, the categorization of small businesses excluded affected
employees from small businesses’ employees under Category C: Essentials.
industries under
23. During the ECQ, only businesses that provided the necessities were
essentials permitted to operate. These businesses were compelled to implement a stringent
category affected skeletal workforce to support operations, in addition to the strict minimum health
by ECQ protocols.22 As enterprises not exempted from ECQ restrictions were made to
cease operations temporarily, their employees were left without a source of
income.
24. The SBWS Program guidelines grouped the qualified employees of these
small businesses affected by the ECQ into Category A – Non-essential; and
Category B – Quasi-essential. In addition, the program specified using the
_______________________________________________________________
22 IATF Resolution No.14, series of 2020, pp. 3-5
Page 9
PAO-2023-03
Small Business Wage Subsidy Program
Philippine Standard Industrial Classification (PSIC) of 1994 to classify small
businesses correctly.23
25. Employers were pre-qualified for the program by the BIR using their
registered PSIC code. This eliminates the need to determine physically whether
or not a small business is subject to the ECQ’s restrictions. (see Table 4)
Table 4: PSIC Codes of Eligible Employers
Philippine Standard Industrial
Sector common name
Classification (PSIC) code
Category A: Non-essentials
Non-food raw materials/Non- 5, 10, 11, 20, 21, 22, 24 to 29, 34,
essential manufacturing 35, 36, 39
Tobacco 16
Construction 45
Airlines 62
Non-essential services 91, 93, 95
Hotels and restaurants 55
Rental and leasing of personal 71
goods
Entertainment 92
Category B: Quasi-essentials
Textiles, wearables, and leather for 17, 18, 19
export
Electronics manufacturing 30, 31, 32
Retail trade 50 to 52
Public transportation/trucking and 60, 61, 63, 64
cargo handling (food and non-food)
Business process outsourcing 68, 70, 72, 73, 74
Banks 65, 66
Personal service and domestic 96
activities (salons, laundry, funerals,
domestic help, others)
Source: DOF-SSS-BIR JMC 001-2020
26. With this category, the program does not cover establishments previously
classified as Essentials but functioning with a skeletal workforce or had
temporarily ceased operations due to adopting ECQ. Employees not included in
the skeletal operation of Category C businesses, such as food
manufacturing, are likewise ineligible for financial assistance under this program.
_______________________________________________________________
23 Supra note 9, § II (3-4), pp. 2-3
Page 10
PAO-2023-03
Small Business Wage Subsidy Program
In the Education Sector, administrative personnel were also denied the
opportunity to apply for the program because neither Category A nor B included
them. IATF-issued permits to operate with a skeletal workforce are detailed in
Figure 2.
Figure 2: Businesses Allowed to Operate During First ECQ (March 15 to
April 14, 2020)
Can Operate at Full Capacity
None
Can Operate with Skeletal Force
• Manufacturing and Processing • Power Energy, IT,
Plants of Basic Food Products, Telecommunications Supplies and
Essential Products, Medicine, and Facilities, Water Disposal Services
Medical Supplies • Export and Business Process
• Agricultural activities Outsourcing
• Retail establishments • Airline and Aircraft maintenance
• Logistics Service Providers employees, including pilot and crew,
• Hospitals and Medical clinics and ship captain and crew
• Food Preparations and Water • Media establishments
Refilling Stations only for take • Hotels
away and delivery • Energy Companies and their third-
• Delivery services party contractors
• Banks and capital markets • Telecommunications
Cannot Operate
• All other businesses
Source: IATF Resolution Nos. 13, 14, and 15, dated March 17, 20, and 25, 2020,
respectively
27. During the program’s planning phase, the DOF projected that 436,300
businesses listed in Table 6 would be forced to close, while 1,042,688 were
operating with a skeletal workforce. In addition, the DOF assessed that 74,051
businesses fall under Category C: Essentials and can continue to operate during
the ECQ. They shall not be included in the program as target beneficiaries except
when the ECQ will impair their capacity to conduct business. The IATF only
permitted businesses to operate if they utilized alternative work arrangements,
including establishments under Category C: Essentials. Besides, it was explicitly
provided in the program guidelines that eligible employers are small business
employers belonging to non-essential and quasi-essential only. Thus,
businesses under Category C: Essentials, even if subject to ECQ restrictions,
were still not eligible for the program; hence, afflicted employees under this
category cannot apply.
28. The SSS and DOF confirmed that for a business to be qualified for the
program, aside from being classified as a small business pre-qualified by the BIR
using their database, it must be affected by the imposition of ECQ. In addition, if
the small business had the option to remain open during the period of quarantine,
Page 11
PAO-2023-03
Small Business Wage Subsidy Program
as in the case of those in Category C, their ability to do commerce is not impinged
on by the IATF guidelines/government order, unlike in the case of Categories A
and B. However, as presented in Figure 2 above, based on the cited IATF
Resolutions, no businesses, regardless of their category, were allowed to
operate in full capacity from March 15 to April 14, 2020.
29. The DOF further explained that if the establishment was not included in
the pre-qualified list, and still, the employer believes they are eligible for the
program; it is noteworthy that the SPTF provided a platform to cater to similar
concerns by sending their queries to SBWS_BIRquery@bir.gov.ph.
Under the non- 30. Overall, 91 percent of the program’s targeted small business employees
essential small were achieved. Nonetheless, a comparison of total accomplishment to target per
category revealed that the program distributed more financial assistance than
businesses, 41
intended in the quasi-essential category. In contrast, the most affected
percent of the establishments in the non-essential category that cannot operate, whether in part
targeted employees' or in full, during the ECQ were not served.
beneficiaries were
not served 31. The SPTF oversees communication and dissemination strategies using
the official websites of the three agencies (BIR, DOF, and SSS), a Google site
dedicated to the SBWS Program, and social media accounts. These agencies
were responsible for answering questions regarding their respective roles and
obligations outlined in the program guidelines. In addition, they respond to
inquiries through their social media and email accounts.24
32. The SPTF held several meetings about the program’s implementation.
Since the primary channel of information dissemination was the social media
account of the partner agencies, this social media account was used to issue
announcements and respond to various questions by providing canned
responses or Frequently Asked Questions (FAQs)25 regarding the program. The
disadvantage of these communication tools is that those who do not have social
media accounts cannot directly access this information.
33. A review of the program’s 91 percent accomplishment disclosed that
Category B exceeded its target by 25 percent but reached only 59 percent in
Category A, failing to serve 717,442 Non-Essential Small Business employees,
as shown in Table 5 below.
Table 5: Target vs. Actual Number of Beneficiaries
Category Target Actual Difference % Accomplished
Category A
1,768,413 1,050,971 (717,442) 59%
(Non-essential)
_______________________________________________________________
24 Supra note 9, § IX (A-D), pp. 7-9
25 FAQ for SBWS Program, available at https://sites.google.com/dof.gov.ph/small-business-
wage-subsidy/frequently-asked-questions (last accessed June 22, 2023)
Page 12
PAO-2023-03
Small Business Wage Subsidy Program
Category Target Actual Difference % Accomplished
Category B
(Quasi-essential) 1,638,637 2,050,714 412,077 125%
Total 3,407,050 3,101,685 (305,365) 91%
Source: COA Analysis
34. Affected Employees. Of the 3.4 million target beneficiaries identified by
the DOF, 2.6 million were compliant with tax requirements based on the
Alphabetical List of Employees/Payees (alphalist) in the BIR database. The
remaining 838,472 employees were not in the BIR’s database due to the
employer’s non-submission of alphalists or non-compliance with withholding tax
requirements but were also compelled to close or operate with a skeletal staff.
The target beneficiaries were further categorized to non-essential and quasi-
essential. (see Table 6)
Table 6: Affected Employers and Employees per Category
Category A Category B
Category C
(Non- (Quasi- Total
(Essentials)
essentials) essentials)
Number of Small
Businesses (non- 436,300 1,042,688 74,051 1,596,654
LTS Taxpayers)
Formal Sector
Employees 1,768,413 3,277,273 597,240 5,858,142
Affected
Not
Employees 1,768,413 1,638,637 3,407,050
Included
Source: DOF SBWS Program Proposal submitted to the President
35. The tri-agency’s communication platforms for communicating the
program to stakeholders were on their websites and Facebook pages. Facebook
notifications, Frequently Asked Questions (FAQs), Step-by-Step guidance via
PowerPoint presentations or PDF files, and emails to pre-qualified employers
were used to communicate with the beneficiaries. In addition to Facebook live
sessions and media interviews, the key implementers of the program provided
prospective applicants with guidance. The numerous communication activities
launched by the SPTF are detailed in Table 7.
Page 13
PAO-2023-03
Small Business Wage Subsidy Program
Table 7: SBWS Program Communication Materials
Communication materials Count Remarks
Advisories 41
FAQS 6
Step-by-Step Guide 7
Testimonial Cards 16
Facebook Live Sessions 3
Website Landing Pages 9
45 Drafts
Emails to Employers
16 Finalized
Source: SSS
36. It is noteworthy to emphasize the communication efforts of the SPTF to
inform the targeted beneficiaries about the wage subsidy program. The
communication strategies work as long as the small business or its
representative is active on social media or frequently visits the tri-agencies
official website. In addition, the BIR is tasked to notify pre-qualified business
employers to avail of the program through the latter’s official website. As an
alternative, BIR may also inform taxpayers through email when such email
addresses of taxpayers are available from their records.
37. We confirmed how establishments were informed by interviewing small
business beneficiaries’ HR/representatives. Interview results revealed that six
percent or two out of 33 with approved SBWS Program applications reported
receiving program information by email from SSS/BIR/DOF, and the majority of
HR Practitioners learned about the program from the web platform (Facebook
announcement, Twitter, online news, and tri-media).
38. Considering that the program is a first come, first serve application, a
review of the program’s guidelines on achieving the target per category indicated
that the program lacked a mechanism to ensure that the target number of
beneficiaries in each small business category would be achieved. As a result,
the implemented guidelines and procedures did not account for accomplishing
the objectives on a per-category basis.
39. Although the program nearly achieved its target for the number of
affected beneficiaries, looking at the program’s target by category, 41 percent,
or 717,442 target employees from non-essential businesses that cannot operate
at all during the lockdown, which required financial assistance the most to
withstand the negative impact of the pandemic, were underserved in comparison
with the businesses that can partially operate.
Page 14
PAO-2023-03
Small Business Wage Subsidy Program
40. SSS confirmed that one of the factors affecting the achievement of the
target was information dissemination. The BIR should have informed the
targeted beneficiaries through email instead of posting the information on the
BIR website, but could not fully utilize the communication method.
41. DOF commented that all eligible non-essential and quasi-essential
businesses were given ample time to avail of the wage subsidy program, and
aside from the efforts listed in Table 7, the Officials of DOF, BIR, and SSS also
made television appearances to promote the program. However, despite these
efforts, the applications received were mainly from quasi-essential businesses.
DOF further explained that small businesses targeted by the program (whether
nonessential or quasi-essential) must still apply to the program and will not
receive the payouts automatically. This is to ensure that the eligibility criteria are
met.
Inaccurate 42. Given the program’s limited application period and key implementers’
information resulted limited capacity to respond to inquiries, information dissemination strategies are
in the distribution of essential for the program’s efficient implementation. So, the implementer of the
₱1.92 billion in program must ensure the accuracy of the information disseminated to the
intended user so that they may make informed decisions. The program
wage subsidies to
disqualified 19,963 employees due to disinformation provided by the SSS about
beneficiaries with the input of 000-000-0000 or random digits TIN. In contrast, SSS granted wage
duplicate/invalid subsidies totaling ₱1.92 billion to 132,506 beneficiaries with duplicate/invalid
TIN. TIN.
43. Program guidelines stipulated that the SSS must provide the BIR with a
list of small business employers who utilized the program, along with the names
of employee beneficiaries and their Taxpayer Identification Numbers (TIN), to
monitor the number of employers availing versus those pre-qualified.26
44. Disqualified Employees. To incorporate the program guidelines on TIN
into the online application system, employers must supply the employee’s name
and TIN. However, a discussion with HR representatives indicated that early in
the program’s implementation, the SSS instructed them through email to submit
TIN 000-000-0000 or a random TIN to complete the application process. We
have validated this information based on comments made by HR representatives
on various social media platforms and based on the minutes of the meeting citing
the advice made by SSS. Accordingly, the SSS issued advisories that confused
employers and employee beneficiaries regarding TIN information. In addition,
SSS instructed the entry of TIN 000-000-0000 or a random TIN in some webinar
sessions for the program briefing.
45. Following SSS’s instruction and advice, the company’s employer/human
resources department entered 000-000-000 or a random TIN for those
employees who either forgot their TIN or were still applying for one. SSS
_______________________________________________________________
26 Supra note 9, § IX (C.7), p. 7
Page 15
PAO-2023-03
Small Business Wage Subsidy Program
explained that the instruction to use a TIN of 000-000-0000 or a random TIN was
because the program did not utilize the TIN as a basis for including the employee
as a program beneficiary. However, SSS later realized the advice was incorrect
and published an advisory on May 5, 2020, three days before the application
deadline, stating that using 000-000-000 or random digits as the TIN of
employees will result in exclusion from the SBWS Program. In addition, the
advisory noted that the method for the return of the wage subsidy would be
announced for employers that input 000-000-000 or random digits for the TIN of
their employees.
46. As indicated in Table 8, an analysis of disaggregated data on disqualified
employees disclosed that 19,963 employees were disqualified due to an invalid
TIN.
Table 8: Disqualified Employees as at June 25, 2020
# of Employees
Reason For Disqualification
Disqualified
Invalid TIN 19,963
Invalid Bank Details 7,795
With Maternity Claim 136
With Final Claim 21
With Unemployment Claim 67
Total Disqualified 27,982
Source: COA Analysis
47. Qualified Employees with Invalid TIN. In the meantime, there have
been instances where applications were approved even though employers
entered duplicate or invalid TINs. As part of the control procedures of the online
application system, the applicant could not modify the information provided in
the system after applying. Following the program’s guidelines and the advice
published on TIN, duplicate and invalid TINs may also result in the employee’s
exclusion from the program and eventual refund of wage subsidies.
48. In light of the potential for invalid TINs and other inaccurate information
to be accepted by the application system, the SPTF launched a correction
module. However, despite the SPTF’s implementing a correction module, an
analysis of application system data revealed that 132,506 beneficiaries had
duplicate and/or invalid TINs. The invalid TINs identified were limited to 000-000-
000-000, duplicate alphanumeric characters, and outdated or obsolete. As
shown in Table 9, the total wage subsidy granted to beneficiaries with duplicate
and/or invalid TINs amounted to ₱1.92 billion.
Page 16
PAO-2023-03
Small Business Wage Subsidy Program
Table 9: Duplicate TIN/Invalid TIN as at November 15, 2021
Particulars With Duplicate TIN/Invalid TIN
No. Of Beneficiaries 132,506
Wage Subsidy Granted ₱1,933,449,000
Tranche 1 988,023,500
Tranche 2 945,425,500
Amount Recovered 8,368,381
Wage subsidy granted to
Beneficiaries with ₱1,925,080,619
duplicate/invalid TIN
Source: COA Analysis
49. Thus, the instructions regarding the input of 000-000-000 TINs and
random digits led to the exclusion of 19,963 employees from the program and
the granting of wage subsidies to 132,506 employees with duplicate and invalid
TINs. Had the policy governing the input of TIN been executed in accordance
with the program guidelines, the number of 19,963 disqualified employees due
to invalid TIN should have been reduced. In addition, with the issuance of an
advisory on disqualification from the program due to the use of duplicate and
invalid TINs, which the program implementer advised at the outset of program
implementation, 132,506 beneficiaries with duplicate and invalid TINs should
have been subjected by the BIR for TIN verification and subsequent wage
subsidy return procedures by the SSS should they found to be ineligible
beneficiaries.
Complicated payout 50. The program could not distribute all wage subsidies within the allotted time
processes delayed frame. The delayed release of financial assistance to 10,544 beneficiaries of
the release of ₱109 Tranche 1 and 3,759 beneficiaries of Tranche 2 who were severely impacted by
million wage the adverse economic effects of the pandemic defeats the objective of providing
subsidies immediate relief to beneficiaries.
51. Consistent with the declared policy in Section 3 of RA No. 101469 to
urgently respond to the socioeconomic impact of COVID-19 that has greatly
affected the Philippines that has caused and continues to cause the loss of lives
and significant disruption of the economy, the State recognizes the urgent need
to undertake programs for recovery and rehabilitation.27
52. Following the enactment of Bayanihan Act 1 on March 20, 2020, then
President of the Philippines approved the SBWS Program on April 14, 2020. By
issuing DOF, SSS, and BIR Joint Memorandum Circular No. 001-2020, dated
April 28, 2020, as the guidelines of the program, the SBWS Program application
_______________________________________________________________
27 Supra note 9, par. 1, p.1
Page 17
PAO-2023-03
Small Business Wage Subsidy Program
period began on April 16 and ended on April 30, 2020. In contrast, the payout
period was set from April 29 to May 15, 2020, for Tranche 1 and May 16 to 31,
2020, for Tranche 2. 28
53. However, the application period has been extended from April 30 to May
8, 2020, due to application issues encountered by employers regarding the
details of necessary personal information of the employees, such as TIN (see
discussion in inaccurate information resulted to distribution of ₱1.92 billion in
wage subsidies to ineligible beneficiaries, page 15). In addition, the payout
periods have been extended to May 31, 2020 and June 15, 2020, for Tranche 1
and Tranche 2, respectively. The extension was made to give companies extra
time to address deficient information on their applications.29
54. In evaluating applications, SSS detected invalid account numbers while
processing the payouts of the beneficiaries. Therefore, the SSS had to notify the
employers of the corrections. In addition, the SSS needed to receive the return
files30 from the DBP to identify the concerned employers and individual employee
files. However, despite the requests from the SPTF and intervention of the
Bangko Sentral ng Pilipinas (BSP), the payout banks have not complied with the
agreed deadlines to submit the return files to the DBP. This resulted in the delay
in identifying and notifying the affected employers and in the distribution of wage
subsidies. Thus, the payout periods were extended to June 19, 2020, for both
tranches and up to June 25, 2020, for payouts resulting from SBWS-CAMP
grievances and SBWS Program appeals.31 As at June 24, 2020, 21,466 CAMP
appeals from employee beneficiaries were recorded, and 13 percent or 2,705,
were granted or resolved.32
55. According to SBWS Program data, Tranche 1 wage subsidy payouts
totaled 3,101,685 and amounted to ₱23.34 billion, while Tranche 2 wage subsidy
payouts totaled 3,084,583, amounting to ₱22.37 billion. Nonetheless, despite the
reported payout being extended until June 25, 2020, a review of the reported
accomplishment of the program indicated that 10,544 beneficiaries for Tranche
1 and 3,759 beneficiaries for Tranche 2 received wage subsidy beyond the
deadline, totaling ₱109.98 million. (see Table 10)
_______________________________________________________________
28 Supra note 9, § VI (7). (2020, April 28). p. 5
29 SPTF Resolution No. 1 (2020, May 15).
30 Return file refers to the report provided by DBP to SSS containing details as that of Payment
File with information on successful and unsuccessful transactions with specified reasons.
31 SPTF Resolution No. 3 (2020, May 28).
32 SPTF Updates Meeting (2020, June 25.) p. 259.
Page 18
PAO-2023-03
Small Business Wage Subsidy Program
Table 10: Wage Subsidy Payouts After the Deadline
Tranche 1 Tranche 2
Particulars Number of Amount of Wage Number of Amount of Wage
Beneficiaries Subsidies (₱) Beneficiaries Subsidies (₱)
Payouts ON or
BEFORE June
3,091,141 23,252,147,000 3,080,824 22,345,923,000
25, 2020,
Deadline
Payouts AFTER
June 25, 2020, 10,544 83,199,000 3,759 26,782,000
Deadline
TOTAL 3,101,685 23,335,346,000 3,084,583 22,372,705,000
Source: COA Analysis
56. The SSS Management confirmed that there were instances wherein
wage subsidy was released beyond June 25, 2020. However, these transactions
were fully supported by SPTF Resolution No. 8, dated August 14, 2020, which
recommends to the Secretary of DOF the further payout of the SBWS Program.
In a positive response, the DOF issued an opinion on the legality of the SBWS
Program payout after June 25, 2020.
57. In the issued legal opinion of the DOF, the vested right of the employees
was emphasized, wherein the SBWS Program was granted because of the loss
of income of employees due to strict quarantine measures imposed from March
to May (2020). That, despite the lapse of RA No. 11469 or The Bayanihan to
Heal as One Act, the reason for the grant of the SBWS Program and its effect
on the employees has occurred.
58. SPTF Resolution No. 8 was issued to address the concerns of eligible
employees who have complied with and satisfied all the program’s guidelines
and qualifications but failed to receive their wage subsidy due to causes beyond
the employer's control of the payee-employee. In particular, the extended payout
beyond June 25, 2020, was only applicable to the eligible employees
enumerated in Table 11:
Table 11: Eligible Employees Allowed to Received Payout Beyond June 25,
2020
Category Details
1. Employees who did not Tranche 1 was not credited due to using old
receive their SBWS or cash/prepaid card account numbers.
With the overlap in the schedule of Tranche
Page 19
PAO-2023-03
Small Business Wage Subsidy Program
Category Details
Program Tranche 1 but 2 payouts and the late submission by banks
received their Tranche 2 of return files for Tranche 1, the discovery
of non-payment was made after reconciling
all the return files beyond the payout
periods.
2. Employees who received a. Employees with incorrect account
their SBWS Program details, which banks accommodated for
Tranche 1 but did not Tranche 1 payout but no longer
receive their Tranche 2 accommodated in Tranche 2, were not
informed to correct their account details.
b. Employees with incorrect account
details who were able to amend their
credentials but whose Tranche 2 was
not released.
3. Employees who did not a. Employees whose disbursement status,
receive both SBWS as reported to SSS by the banks, were
Program Tranche 1 and changed from “Credited” to “Not
Tranche 2 Credited.”
b. Employees with incorrect account
details who were not notified could not
correct the same.
4. Employees who received a a. Employees whose DOLE CAMP
subsidy from the DOLE’s appeals were not processed until the
CAMP but did not receive determination of payout for Tranche 1
SBWS Program Tranche 2 have been settled based on the
representing the net of any submission by the banks of the return
amount received under the files.
DOLE’s CAMP
b. Employees whose DOLE CAMP
appeals were not processed before the
payout deadline.
Source: SSS, SPTF Resolution No. 8, dated August 14, 2020
59. It is noteworthy to mention that the cited reasons for the delay of the
payout beyond the control of the beneficiaries and the SPTF considered the
impact of the program on the beneficiaries even beyond the payout deadline.
However, we maintain that these identified beneficiaries were among the formal
sector employees severely impacted by the significant economic disruption
caused by the COVID-19 pandemic. Delaying wage subsidy distribution beyond
June 25, 2020, defies the purpose of the SBWS Program, which is to provide
Page 20
PAO-2023-03
Small Business Wage Subsidy Program
beneficiaries with immediate relief. This is corroborated by the explanation of the
DOF that the program was not extended or reopened as it was conceptualized
to provide immediate relief to small business employers and their employees.
(see a detailed discussion on ₱5.7 billion funds under the program that were
returned to BTr, page 37)
Page 21
PAO-2023-03
Small Business Wage Subsidy Program
Immediate
program
implementation
resulted in
inaccurate and
unsuccessful wage
subsidy
distribution and a
lack of corrective
processes
60. Due to a lack of time to prepare the program and an immediate
requirement of implementation, program planning, application processes,
and remedial procedures were challenging during the implementation of
the SBWS Program. As a result, (a) the program implementers incorrectly
tagged beneficiaries; (b) no effective control was established to prevent
the acceptance of incorrect and invalid information to the online
application system; (c) acceptance of invalid and/or incorrect information
about beneficiaries that caused the unsuccessful payout of ₱557 million
wage subsidies from money remittance centers; (d) voluntarily returned by
an employer was not fully reflected in the report provided; and (e) SPTF
issued resolution transferring its fiscal accountability to COA by relying
on the former’s post-audit procedures in identifying ineligible
beneficiaries.
Challenges in cross- 61. The DOF cross-matched CAMP and SBWS Program beneficiaries to
matching of SBWS prevent double-dipping or unauthorized receipt of multiple subsidies. However,
Program applicants beneficiaries were mistakenly tagged due to a lack of a unique identifier for the
and CAMP beneficiaries' information, the different format of the names used across the two
programs, and the timing of the financial assistance. As a result, overpayments
beneficiaries
of ₱51.88 million were made to 10,375 CAMP and SBWS Program participants,
caused incorrect while ₱4.43 million were wrongly deducted from the 886 SBWS Program
tagging beneficiaries.
62. The CAMP is a cash-assistance program administered by the DOLE that
provides financial support to affected employees in private businesses that have
adopted flexible working arrangements or temporary shutdowns during the
COVID-19 pandemic.33 While the SBWS Program is the successor to CAMP, the
latter’s beneficiaries can also benefit from the SBWS program so long as the
₱5,000 received from CAMP is deducted from their second tranche.
63. Upon review of the SBWS Program guidelines, it was determined that
the DOF is responsible for matching CAMP beneficiaries with qualified SBWS
_______________________________________________________________
33 DOLE Department Order No. 209, Series of 2020
Page 22
PAO-2023-03
Small Business Wage Subsidy Program
Program beneficiaries. Therefore, under the Data Sharing Agreement (DSA)
signed by the DOF, DOLE, and SSS on May 4, 2020, the DOLE shall share its
list of beneficiaries with the SSS and DOF via an in-house developed SSS Web
Service with a dedicated URL and secure file transfer protocol (SFTP). The DOF
will utilize the data to cross-match beneficiaries of the CAMP and SBWS
Program. The DOF provided the cross-matched data to SSS over SSS’s SFTP
as a reference for processing the applications.
64. The DOF performs the pre-processing of CAMP beneficiaries and the
cross-matching with SBWS Program beneficiaries through the data scientist.
The data scientist employed numerous data analytics tools for a proper data
cleaning technique for deduplication and name matching, considering the
different information formats required by the two systems. The DOF noted that
cross-matching proved challenging because the data sets from the respective
systems lacked a unique identity and had different naming conventions. For
example, the SBWS Program database uses the format First Name, Middle
Name, Last Name, whereas the DOLE-CAMP database uses the format Last
Name, First Name, Middle Name. In addition, DOLE-database CAMP is
susceptible to human error, such as the employer’s improper entry of applicant
names (with Jr., same name, incorrect spelling, etc.).
65. Due to the highlighted difficulties in cross-matching beneficiaries
between the two programs, 886 SBWS Program beneficiaries were incorrectly
tagged as CAMP beneficiaries. As a result, their second tranche wage subsidies
were improperly reduced by ₱5,000, totaling ₱4.43 million.
66. The cross-matching result of the CAMP data and the SBWS Program
indicates that 29 percent or 196,000 out of the 680,000 CAMP beneficiaries also
benefited from the SBWS Program.34
_______________________________________________________________
34 SBWS Program report no. 71 p. 2
Page 23
PAO-2023-03
Small Business Wage Subsidy Program
Figure 3: CAMP 1 vis-à-vis SBWS Program Timeframe
Source: Program Guidelines of DOLE-CAMP and SBWS Program
67. The timing of the release of financial assistance to CAMP 1 beneficiaries
posed an additional difficulty in the cross-matching process. As shown in Figure
3, the payout period for CAMP 1 was from March 24 to September 2020, but the
payout period for SBWS Program was from April 29 to June 25, 2020. Due to
the longer payout term of CAMP 1 compared to SBWS Program, employer
applicants for SBWS Program were not permitted to list their employees
applying under CAMP 1 beneficiaries until they received financial support from
CAMP 1. Neither employers nor employees knew when they would receive
financial support from CAMP 1. Applicants to the SBWS Program indicated in
good faith that they were not CAMP beneficiaries during the application process.
This resulted in obtaining the entire subsidy amount under both programs. Even
with the CAMP cross-matching procedures performed by the DOF to determine
whether qualified SBWS Program beneficiaries were also CAMP beneficiaries
before the distribution of SBWS Program subsidies, there was no assurance that
multiple requests for financial assistance would be identified.
68. The cross-matching concern of the SBWS Program and CAMP
beneficiaries compelled the SPTF to develop a grievance mechanism. As a
result, SPTF Resolution No. 4 was passed, allowing beneficiaries who were
improperly tagged and entitled to the SBWS Program to file an appeal.35 The
SPTF will decide the request based on the appellant’s information. The SPTF
will communicate its final decision to the appellant. If the appeal is upheld, the
SPTF shall recommend the decision to the SSS administration for immediate
processing of the difference between the SBWS Program and CAMP amounts
received by the appellant.
_______________________________________________________________
35 SPTF Resolution No. 4, p. 3
Page 24
PAO-2023-03
Small Business Wage Subsidy Program
69. A partial analysis and comparison of the two databases (CAMP and
SBWS Program) found that the DOF’s cross-matching process missed
approximately 10,375 employees who were both CAMP and SBWS Program
beneficiaries. Hence, they received the full wage subsidy. In contrast, we
noted that around 886 employees were incorrectly identified as CAMP
beneficiaries, and the amount of ₱5,000 was deducted from their second tranche
of wage subsidies. This resulted in an overpayment of ₱51.88 million to CAMP
and SBWS Program beneficiaries and an underpayment of ₱4.43 million to
SBWS Program beneficiaries who were incorrectly tagged.
70. Throughout the application process walkthrough, we noted that the
Program’s Online Application System permits invalid/incorrect TINs for
employees (see a detailed discussion on inaccurate information caused the
release of ₱1.92 billion wage subsidies to ineligible employees, page 15). Due
to the lack of a shared database between key stakeholders, the three program
application systems used for the SBWS Program were unable to validate the TIN
provided by the employer. However, a separate analysis identified invalid and
duplicate contact information for 936,976 employee beneficiaries without contact
information and 54,454 employers with invalid contact information.
71. The program implementation constraints prohibited the implementer from
establishing sound design internal control at the onset of program
implementation. To expedite implementation and address the immediate
demand for relief in the formal economy sector, an online application system was
established for employer applicants to give information, resulting in invalid and
incomplete data entry in the system. To minimize the data entry problem, SSS
Management offered and relied on a commitment signed by employers upon
program application submission that the information provided is true and correct.
72. DOF commented that in addition to the factors identified that pertain to
cross-matching, the following also contributed such as: (a) the DOLE CAMP
Application was manually done, (b) the SBWS Program Team received the
DOLE database in a per region file, (c) the middle name of the recipients are
included in the first name column. Other files did have middle names in a
separate column, but only middle initials, (d) birthdays were not included, and
(e) only employers, barangay, city, and municipality were given. DOF further
explained that as the DOLE CAMP data is “incomplete” and/or incorrectly
formatted,” conducting a perfect cross-matching was difficult.
Page 25
PAO-2023-03
Small Business Wage Subsidy Program
Online application 73. In terms of data entry, an examination of the application system's internal
system did not have control revealed no effective control to prevent invalid and incomplete data from
effective control to being entered into the program's online application system.
prevent input of
74. The Control Objectives for Information and Associated Technologies
partial and invalid
(COBIT) 5 framework created by the Information Systems Audit and Control
data entry Association provides information technology best practices that conform to
international standards. Under the COBIT 5 Enabling Processes, control
activities under the Deliver, Service, and Support domain state that input
transactions should promptly validate that they are accurate, complete, and valid;
validate input data; and edit or, if necessary, send back for correction as close
as possible to the point of origination.
75. The SPTF ensured that the SBWS Program be fully digitized to distribute
the wage subsidy within the allotted timeframe to promptly mitigate the adverse
economic effects of the COVID-19 pandemic on the formal economy sector.
Hence, an IT system was established to support the program’s implementation.
With this developed IT system, SSS created three online application methods.
76. The login mechanism and procedure for encoding the applicant’s
information vary in between the three different application methods. These three
methods depend on the information the employer applicant provides and the
information already stored in the SSS database.
77. A review of the application system’s disaggregated data indicated invalid
or insufficient data. SSS Management explained that the information could not
be altered or changed once an employer submits an application.36 In this
instance, the information that employers encoded in the application system are
considered final and cannot be modified without SSS permission. This was also
confirmed in the email issued in response to SBWS Program inquiries, which
said that if an employer encoded wrong employee information such as account
number, mobile number, TIN, etc., the information would be considered final.
This resulted in the database application containing inaccurate or incomplete
data.
78. Since the DOF, SSS, and BIR do not have a common database, there
was this concern regarding data submission. Therefore, there is a high possibility
that the information details for employers and employees from the BIR pre-
qualification will not match the information in the SSS database, even though the
beneficiaries belong to the same formal economy sector.
79. SSS Management commented that no procedures or systems were
created to validate employee beneficiaries’ TIN, bank account, and mobile
number.
_______________________________________________________________
36 SBWS-Step by Step Guide (Method 1), p. 12
Page 26
PAO-2023-03
Small Business Wage Subsidy Program
The acceptance of 80. The distribution of wage subsidies through money remittance centers
blank, duplicate, or depends on employees’ contact information. As such, a review and analysis of
invalid contact disaggregated data from the online application database as at April 30, 2022,
numbers by online show that there are 936,976 employee beneficiaries without contact information,
invalid or duplicate contact details, 17,205 incorrect bank accounts, and 54,454
application systems, employers with invalid contact information. The deficiency resulted in unclaimed
as well as payouts of 59,167 beneficiaries in money remittance centers and 17,205
inaccurate bank beneficiaries in banks, which amounted to ₱557 million in wage subsidies.
accounts, are
81. According to the program guidelines, the SSS is responsible for informing
among the issues the employers and employees of small businesses about the status of their
contributing to payouts.37 After the DBP has processed the payment files corresponding to the
failure payouts in payment methods, it must notify the SSS that they have been uploaded. The
remittance centers. SSS will then prepare the text blasts table of employees with mobile numbers to
send notifications regarding the status of the SBWS Program payout and send
it to the Text Blast Service Provider. Text messages (SMS) were used to notify
qualified employee beneficiaries of the DBP’s release of their wage subsidy. The
SMS notice contains information regarding the status of the wage subsidy,
including whether it has been credited to the beneficiary’s bank or e-wallet
account or is available for pick-up at an authorized remittance center. The
message also provides the Transaction Reference Number and instructions on
how to claim the wage subsidy for beneficiaries who decide to pick up the
subsidy at an accredited remittance center.38
82. A review of the disaggregated SBWS Program data revealed the
following: (a) beneficiaries without contact information/number; (b) beneficiaries
with reported mobile phone numbers containing invalid letters and special
characters. There were also invalid phone numbers lacking 11 digits and
containing prefixes of nonexistent networks included39; and (c) beneficiaries
shared identical contact information with other beneficiaries (see Figure 4).
_______________________________________________________________
37 Supra note 9, § IX (C.5.) p. 8
38 SSS Office Order 2020-049. p. 3.
39 Mobile Network Prefix is the first four digits of an 11-digit mobile number, e.g., 0912, 0913, etc.
Page 27
PAO-2023-03
Small Business Wage Subsidy Program
Figure 4: Beneficiaries with contact number issues as at June 20, 2022
Source: COA Analysis
83. Analysis of the disaggregated data from SSS for the unclaimed wage
subsidies revealed that 59,167 counts of unclaimed wage subsidies due to
contact informations issues resulted in an unclaimed amount of ₱430 million.
Meanwhile, 17,205 counts of wage subsidies with incorrect bank accounts
resulted in ₱127 million unclaimed wage subsidies, as shown in Figure 5.
Figure 5: Unclaimed Wage Subsidies Due to Invalid Contact Information
and Incorrect Bank Accounts
23%
INVALID
CONTACT
₱557 Million INFORMATIONS
INCORRECT
77% BANK
ACCOUNTS
Source: COA Analysis
84. Given the frequency of missing, invalid, and duplicate phone numbers,
text message notifications to employee beneficiaries would be challenging.
Page 28
PAO-2023-03
Small Business Wage Subsidy Program
Nevertheless, notification of a beneficiary’s application status is essential,
particularly for those elected to receive the wage subsidy through money
remittance centers.
85. According to interviews with 11 out of 27 HR representatives of
participating small businesses, there were cases where neither emails nor text
messages were delivered to employers to inform them whether wage subsidies
were successfully credited, remitted, or claimed by employee beneficiaries.
86. The beneficiary survey revealed that 47 percent, or 157 out of 335
respondents, did not get any information from the SSS regarding the status of
their wage subsidy. The respondents noted that some employee applicants (see
Figure 6) depended on their employer, co-employees, and frequent bank
account checks to determine the status of their application.
Figure 6: Manner of notification on Application Status to Beneficiaries
Source: COA Analysis
87. Conversely, 54,454 employers did not have valid phone numbers, and
52 did not provide email addresses. As a result, these establishments can not
determine the status of the wage subsidy for their employees without contact
information, and many employers, particularly the HR representatives, became
dependent on the reports of their employees or co-employees from other
companies to monitor the wage subsidies.
88. Upon evaluation by the SSS, the applications were classified into three
categories: qualified for the successful application, lacking credentials for
applications requiring additional information, and disqualified, as detailed in
Table 12 below.
Page 29
PAO-2023-03
Small Business Wage Subsidy Program
Table 12: Beneficiary Classification/Status of Payout
Qualified Lacking Credentials Disqualified
Credit subsidy to No Bank Details/invalid Part of the Skeletal
bank account, PESONET account workforce or work from
Paymaya, or M. home, with a salary of more
Lhuillier than 15 days
Records with Shared On any leave during the
Bank Account pandemic (maternity, sick
details/Mobile number leave, vacation, etc.)
Invalid Format of Resigned during the period
mobile numbers for when ECQ was being
Paymaya/ML payment implemented
000 TIN or With Maternity Benefits,
invalid/incomplete TIN Unemployment Benefits
Claims, or SSS Final Claims
Source: COA Analysis
89. Without the contact information, employers and employee beneficiaries
could not be apprised of the status of their applications. Without SSS notice,
concerned beneficiaries could not effect corrections or complete their
applications which were classified as “Lacking Credentials”.
90. No concerns are associated to qualified employees who choose a bank
account as their payout option. In contrast, it is unclear whether employees with
qualified status who choose M Lhuillier as payout options can claim their salary
subsidy without notification of their reference number. Thus, as at April 30, 2020,
SSS reported ₱557 million in rejected/unsuccessful salary subsidies from banks
and M Lhuillier.
91. SSS explained that invalid or incomplete data were transactions from
Excel files submitted through the SharePoint and Azure online application
methods. These are not real-time online filing; thus, data validation was done
after receipt of Excel files. To correct the erroneous data, employers were
notified and allowed to change their contact information using the post-
payout correction module. Upon receipt of the notice, the employer shall enroll a
valid bank account or mobile number of their employee recipient. If the
beneficiary selected MLhullier as the payout option, information for the mobile
number is needed. However, SSS had no database where to determine the
validity of the mobile number enrolled.
92. Apparently, even if the concerned employers were notified of the
erroneous data and utilized the post-payout correction module to enroll a new
mobile number in the case of a money remittance center payout, SSS could not
verify the validity of the new mobile number provided by the employer.
Page 30
PAO-2023-03
Small Business Wage Subsidy Program
Return of wage 93. Part of the program implementer’s initiative to recover wage subsidy
subsidies were not granted to ineligible beneficiaries was through voluntary return. However, a
properly accounted review of the voluntary returns revealed that there were unidentified deposits,
which amounted to ₱49.20 million.
for and reported
94. Under the SPTF Resolution # 2, 5, and 9 on Voluntary Return of wage
subsidy procedures, employers and employees must return the subsidy granted
if they violate any of the eligibility requirements found in the program guidelines.
Therefore, the return of wage subsidy will either be the responsibility of
employers or employees, depending on the violation, as shown in Figure 7.
Figure 7: Who is required to return the subsidy
• Employers who fail to maintain
employment status of the
beneficiaries within SBWS period
• Employers of employees who are
DOLE-CAMP beneficiaries who
received full amount of SBWS 2nd Employer
tranche
SBWS • Misinterpretation in their application
the fact of payment of wages or any
LBP material fact relevant to the eligibility
Return requirement of their employees
Account
• Employees-beneficiaries who
resigned when ECQ or MECQ is
imposed in the LGU or place of
business where his employer is Employees
found
• Employees who received DSWD-
SAP-ESP
Source: SPTF Resolution #2
95. As specified in the Employer’s Undertaking, the employer has certified
that all provided information is accurate and complete. Misinterpreting the
application will result in the employee’s disqualification, requiring the employer
to refund the subsidy. Employers or employees must voluntarily deposit the
amount subject to refund into BTr’s Land Bank of the Philippines (LBP) account,
which was established expressly for the SBWS Program wage subsidy return.
The employer or employee who submitted the return amount must email SSS
the deposit slip with a list of employees’ information and the reason for the return.
After receipt, SSS will reconcile and encode the amount to the SBWS Program
return module.
Page 31
PAO-2023-03
Small Business Wage Subsidy Program
96. A review of wage subsidy return documents revealed that, as of July 5,
2021, the entire amount of voluntary return deposited to the BTr through the
designated LBP account was ₱504.20 million, including an unidentified deposit
of ₱49.20 million. The unidentifiable amount refunded resulted from deposits to
the account that lacked adequate disclosure of transactional information (see
Table 13).
Table 13: Breakdown of Voluntary Returns to BTr
Number of
Reason for Return Amount
Employees
Misinterpretation 27,453 392,959,205
Resignation 383 5,806,757
CAMP Beneficiary 9,926 51,475,606
SAP Beneficiary 433 3,886,500
4Ps Beneficiary 70 884,400
Unidentified Deposit - 49,200,000
Total amount deposited to
38,265 504,200,000
BTr
Source: SSS
97. Thirty-eight thousand two hundred sixty-five (38,265) identified employee
beneficiaries deposited 90 percent or ₱455 million of the entire amount returned;
86 percent or ₱393 million out of ₱455 million was due to misrepresentation. Due
to the closing of DSWD, DOLE-CAMP, and LGUs’ subsidies, management
confirmed that there were voluntary returns for SAP, 4Ps, and other subsidies
issued by DSWD and LGUs that were deposited to the account of SBWS
Program. So, the reason for the ₱49.20 million deposit could not be ascertained,
nor could its nature be related to the SBWS Program funds.
98. In addition, in one of the field validations, a comparison of the deposit
made by a company against the number of employees reported in the database,
disclosed that the deposit was not matched. We noticed that the return for
deposit slip of ₱1,104,00040 was recorded in the database as ₱1,040,000 with a
difference of ₱64,000, equivalent to four employees.41
99. Proper monitoring and reporting of the program’s implementation are
essential to agencies’ accountability and transparency on whether the
appropriated funds were spent correctly for their intended purpose. In accounting
_______________________________________________________________
40 2nd SBWS Program walkthrough meeting
41 Establishment located in the NCR, wage subsidy amounted to ₱16,000 per employee for
tranche 1 and tranche 2
Page 32
PAO-2023-03
Small Business Wage Subsidy Program
for money and property received by public officials, P.D. No. 1445 stated that
except as may otherwise be expressly provided by law or competent authority,
all money and property officially received by a public officer in any capacity or
upon any occasion must be accounted for as government funds and government
property. Government property shall be taken up in the agency’s books at
acquisition cost or an appraised value.42 However, with the noted observations
on the unaccounted ₱64,000 deposit from the voluntary return, it is doubtful that
₱455 million accounted for voluntary return was correctly recorded. And also, at
a certain point when post-implementation verification of beneficiaries will be
rolled-out, unaccounted voluntary returns will significantly impact its efficiency.
100. SSS confirmed the process of voluntary return and enumerated the
identified constraints during the reconciliation of deposits that caused the
unidentified ₱49.2 million. Accordingly, some employers or employees did not
submit deposit slips and details of the payments. Based on the bank statement,
there is no means by which SSS will know who is the employer or employee
responsible for the transaction. During the reconciliation process, there were
instances where no SSS numbers were indicated or the documentation was
incomplete. No reply to the request was made until the program's closing, the
amount deposited did not reconcile with the listing submitted, and no
explanation/reply was received from the employer or employee.
Procedures for 101. Examination of accomplishment reports, program guidelines, and issued
involuntary return of policies disclosed that the program implementers had not initiated procedures
wage subsidy were for involuntary return of wage subsidies.
not performed
102. The head of any agency is immediately and primarily responsible for the
funds and property that pertain to their agency.43 Therefore, the primary objective
of the program’s post-implementation mechanisms is to systematically track
implementation and outputs and evaluate the program’s effectiveness.
103. Further, it is worth highlighting that an SPTF Resolution was issued
authorizing the SSS to institute appropriate civil actions upon receipt of the
endorsement prepared by the SPTF containing its findings and recommendation
that there is a prima facie case or sufficient ground to proceed with the filing of
an action against a concerned employer or employee.44
104. The resolution for the involuntary return mechanism enumerates
instances when wage subsidies shall be refunded to the government following
the program guidelines. As such, the employer must return upon failure to
maintain the employment status of all employee beneficiaries before the ECQ
and other forms thereof and when the employer misrepresented their application.
In contrast, the employee, on the other hand, shall return the wage subsidy when
_______________________________________________________________
42 Presidential Decree No. 1445, § 63, p.19
43 Ibid, §102.1, p.27
44 SPTF Resolution No. 11, p3
Page 33
PAO-2023-03
Small Business Wage Subsidy Program
they resign during the ECQ period and other forms imposed in Luzon and other
parts of the country.45
105. However, a review of SBWS Program guidelines and SPTF resolutions
to determine the extent to which the agency monitors the program revealed that
program implementers did not appropriately implement post-
implementation mechanisms planned to identify ineligible beneficiaries. Further,
analysis of wage subsidy returns showed that wage subsidy refunds were
entirely voluntary. (see detailed discussion in return of wage subsidies were not
properly accounted for and reported, page 31). This demonstrates that SSS has
not yet instituted appropriate action, at least to the noted invalid TIN with a total
of 132,506 counts which resulted in ₱1.92 billion wage subsidy (see detailed
discussion in Inaccurate information caused the release of ₱1.92 billion wage
subsidies to ineligible employees, page 15). TINs identified were limited to 000-
000-000-000, duplicate, alphanumeric characters, and outdated or obsolete.
106. Moreover, a review of the budget allocated for the program’s
implementation showed that no funding was allocated for the program’s post-
implementation activities. About 99.6 percent, or ₱50.8 billion, of the entire
program budget of ₱51 billion was allocated only for the fiscal cost of the wage
subsidy. While the remaining ₱200 million was provided for administrative costs
associated with implementing the program.
107. In addition, the review of the latest SPTF resolution for the involuntary
return of wage subsidy disclosed that program implementers explicitly
transferred their fiscal responsibility by relying on the COA’s post-audit
procedures to identify ineligible beneficiaries without consulting the COA upon
the discovery that the employer or employee is deemed liable to return to the
government the amount of wage subsidy granted, or upon the discovery of fraud
by the DOF, SSS, or BIR. The SPTF will issue a demand letter for the return of
the said subsidy within 15 calendar days from receipt thereof with a warning that
failure to return will result in the filing of the appropriate criminal and/or civil
action.46 Hence, the post-implementation mechanism for the program or the
fiscal obligation of the program implementers has been shifted, with the COA’s
determination of disqualified beneficiaries serving as the basis for the decision
to return subsidies for the program.
108. SPTF established new measures to verify the beneficiaries’ eligibility
during the program’s implementation. The employer confirms through an
“Employer’s Undertaking” that each employee who has applied for the program
has met all eligibility requirements. Employers who mislead information pertinent
to the eligibility of their employees shall be held accountable and refunded the
amount of wage subsidies received.47
_______________________________________________________________
45 Supra Note 44, p.2
46 SPTF Resolution # 12, § V. Procedures for involuntary return, p. 5
47 Supra note 9, Item VI. General Guidelines, no. 4, p. 4.
Page 34
PAO-2023-03
Small Business Wage Subsidy Program
109. We observed that the management’s decision to depend on employer
undertakings without confirming other papers sped up the application process
but increased the potential of improper applicant payments.
110. On the other hand, we highlighted that the SSS’s automated application
system verifies whether or not employees are actively paying SSS members,
have no pending or settled SSS unemployment benefits, and have no pending
or in-process SSS final claims. In addition, the SSS’s automated system verifies
the correctness of all qualified employees’ credentials, such as bank accounts
and mobile phone numbers.48 This led SSS to reject the applications of 48,295
employees with invalid TINs, bank details, and unemployment claims with SSS
during the application phase (see Figure 8).
Figure 8: Rejected or Unsuccessful Credits of Wage Subsidies to
Beneficiaries’ Accounts
Source: COA Analysis
111. A post-implementation mechanism is crucial to confirm that the desired
program result was achieved and could help identify ineligible employees who
should have returned the wage subsidy. This may have been determined during
program planning by examining the program’s susceptibility to inappropriate
payments. However, due to the short time available for program design, the DOF
admitted in response to our inquiry that they could not undertake a complete risk
assessment.
_______________________________________________________________
48 SSS Office Order No. 2020-026b, Annex B.1 Validation of Pre-Qualified Employers and
Employees. p. 11
Page 35
PAO-2023-03
Small Business Wage Subsidy Program
112. BIR Management commented that through the issuance of SPTF
Resolution No. 11, dated September 2, 2021, it was resolved that SSS is the
authorized agency to initiate the involuntary return of wage subsidy. It was
specified in the said resolution that SSS had already represented the Republic
of the Philippines concerning the beneficiaries of the SBWS Program, coupled
with the fact that SSS is privy to the information on the compliance by the
beneficiary employers and employees with the continuing qualifications outlined
in JMC No. 02-2020. Hence, the SSS is the proper and practical party to institute
a civil action to recover the subsidy.
113. Furthermore, the Legal Opinion issued by the Office of the Solicitor
General (OSG) dated November 11, 2020, states that, since the functions of the
SSS include the acceptance and processing of applications, determination of
eligibility for the wage subsidy, coordination with and disbursement of funds to
qualified employers and employees, the SSS represents the Republic as far as
the beneficiary employers and employees of the SBWS Program are concerned.
The OSG added that the SSS, as the representative of the Republic, is the
proper party to institute the appropriate action against the employer or employee
in case of failure to return the wage subsidy.
114. Lastly, the BIR, in its response/comment dated May 23, 2023, stated that
upon receipt of data submitted by the SSS on June 17, 2021, it has already fully
validated the TIN of both the employers and employees and will transmit the
results of the verification to the SPTF and SSS for appropriate action. As a result
of the post-implementation verification made to the TIN of the employees granted
the wage subsidy, the BIR has counted 384,726 TINs not found in the BIR
database.
115. It could be noted that this is an indication that wage subsidies were
granted to employees whose TINs were incorrectly encoded in the applications
and their correct information need to be validated to determine their eligibility to
the program. Further validation of the beneficiaries’ TIN with the BIR could not
be undertaken by the audit team due to the restrictions specified in the National
Internal Revenue Code on the confidentiality of taxpayers’ information.49
_______________________________________________________________
49 National Internal Revenue Code, Unlawful Divulgence of Trade Secrets, § 270
Page 36
PAO-2023-03
Small Business Wage Subsidy Program
After
implementation,
program
implementers
reported ₱6.7
billion of
unsuccessful
payout and
returned ₱5.7
billion to BTr
116. Implementing the SBWS Program as an early response to the
pandemic's adverse economic impact on the formal economy sector
necessitates meticulous planning. Because of the speed with which it was
implemented, there was insufficient data entry and acceptance of
erroneous and/or incorrect beneficiary information, which resulted in the
inability to distribute ₱6.7 billion in wage subsidies and the subsequent
return of ₱5.7 billion to the BTr.
117. The economic consequence of the pandemic in the formal economy
sector was unimaginable. Therefore, it was notable that the government
formulated a program to specifically intervene in the adverse economic impact
on the affected worker in the formal economy sector. With the aid of technology,
in just two and a half months, program implementers had served 91 percent of
the targeted beneficiaries. In addition to facilitating applicants’ access to the
program, it safeguards them from the possibility of COVID-19 infection.
However, the program’s implementation in a limited timeframe caused the
underutilization of the funds released for the program.
₱5.7 billion funds 118. As at February 15, 2022, SSS had returned to the BTr unutilized SBWS
for the program Program funds totaling ₱5.7 billion, including interest earnings totaling ₱2.8
were returned to million (Figure 9). Accordingly, as the Bayanihan Act 1 requires, the government
allocated ₱51 billion to the SBWS Program to provide wage subsidies to the 3.4
BTr
million affected employees in the formal sector until June 25, 2020.
Page 37
PAO-2023-03
Small Business Wage Subsidy Program
Figure 9: Program Budget Utilization
Source: SBWS Program Liquidation Report (2022, April 30)
119. Instead of distributing the unused fund for the SBWS Program, the SPTF
returned the fund to BTr. The DOF explained that the program was not extended
nor reopened, and the ₱5.7 billion in unused funds were returned to the BTr
because the program was intended to provide immediate relief to affected small
business employers and their employees when ECQ and modified ECQ (MECQ)
were imposed from March 17 to May 31, 2020.
120. Examination of the program’s utilization report disclosed rejected or
unsuccessful payouts of ₱6.7 billion, as shown in Table 14.
Table 14: Amount Rejected/Unsuccessful as at April 30, 2022
Payout Option Amount
PESOnet ₱6,159,019,500
M Lhuillier 440,023,500
PayMaya 92,191,000
TOTAL ₱6,691,234,000
Source: SSS
121. The ₱5.7 billion returned fund may have been used to give subsidies to
additional employee beneficiaries if other issues impacting the program’s
operation, such as time and physical resources, were considered in the
implementation. In a conservative estimate, assuming that the unutilized fund
will be distributed to non-CAMP beneficiaries who reside in regions with the
highest wage subsidy of ₱8,000 per tranche, the fund could have covered an
Page 38
PAO-2023-03
Small Business Wage Subsidy Program
additional 354,757 employees from affected small businesses, which would have
been sufficient to cover the program’s overall target beneficiaries. (see Table 15)
Table 15: Estimated Number of employees that can benefit from the
returned amount
SBWS Program Fund returned to BTr ₱5,676,124,170.22
Divide: Maximum Grant for two tranches 16,000
Additional employees that could benefit from 354,757
SBWS Program
Source: COA Analysis
122. As part of the BIR’s responsibilities, the program guidelines offered a
system to ensure that all affected employers are considered during pre-
qualification. In response to a separate inquiry to the BIR regarding employers
who requested to be placed on the list of pre-qualified employers, it was revealed
that the BIR received 23,561 requests from these employers. Still, only 805 were
approved due to budgetary constraints. The BIR indicated that the SPTF did not
want to overcommit to these employees; hence, it was reasonable to decline
their applications.
123. SSS explained that the rejected/unsuccessful payouts were not
reprocessed due to the unavailability of data from DBP before the due date of
liquidation.
₱6.7 Billion wage 124. One of the factors contributing to the underutilization of the wage
subsidy payouts subsidies fund was the rejection or failure of ₱6.7 billion in payouts. Instead of
not successfully utilizing the fund through the SBWS Program, the SPTF returned ₱5.7 billion to
the BTr, which could have provided wage subsidies to an extra 354,757 affected
received by
employees.
intended
beneficiaries 125. During pre-payout, SSS will email qualified employees with invalid or
duplicate bank accounts and mobile phone numbers. The employer must access
the application system on the program website to amend the details of affected
employees and resubmit the application along with the Employer’s Undertaking
upon receiving notification from the SSS. The SSS shall then reprocess the
application as it would with new applicants.50
126. During the distribution of wage subsidies, there have been instances of
unsuccessful crediting due to invalid bank accounts and mobile phone numbers
that were not identified during application processing. Thus, the affected
employees will not receive the wage subsidy. In this instance, the SSS will notify
the employer through email of the noted issue. The employer must then use the
_______________________________________________________________
50 Supra note 44, Annex A.3 Detailed Procedures on the Handling of Exception Cases for SBWS
Program. p. 3
Page 39
PAO-2023-03
Small Business Wage Subsidy Program
My.SSS website to access the Post-Payment Data Correction Module. With
the updated undertaking, the employer must supply the concerned worker’s
corrected bank information or mobile phone number. Finally, SSS will conduct
the corrections, produce the summary disbursement report on the post-payment
correction module, and send the report to the SPTF.51
127. In cases of non-receipt of the Reference Number, the SSS shall review
the complaints and conduct identity verification upon receipt of the appeal from
the involved employers. The affected employer will receive an email to correct
or update the worker’s details if validated. After correcting the information, SSS
will resend the required reference number to claim the wage subsidy.52
128. Regarding the missed opportunity, we analyzed the factors influencing
the unsuccessful payouts worth ₱6.7 billion (see the detailed discussion ₱5.7
billion funds for the program were returned to BTr, page 37). Unfortunately, the
SPTF Board returned the remaining funds rather than extend the program’s
implementation. However, if they had been accommodated into the program by
extending the payout period instead of returning the program fund to the BTr,
more beneficiaries would have benefited from the program.
129. We reviewed approximately four percent of the SBWS Program database
for unsuccessful distributions. As a result, we observed that, despite the
corrective procedures established, there were 78,221 beneficiaries with
unsuccessful wage subsidy payout totaling ₱571 million due to the various
reasons detailed in Table 16.
Table 16: Unsuccessful Payout based on SBWS Program Database
Reason for The total amount not
No. of Beneficiaries
Unsuccessful Credit credited
Incorrect Bank 17,205 ₱ 127,835,000
Account
Unclaimed ML Payout 59,167 429,417,000
Closed Account 1,213 9,478,500
With Restrictions 50 372,000
Canceled Transaction 127 952,500
by SSS
Credited To Not 440 3,041,500
Credited
Account Differs from 11 88,000
Payee Name
Dollar Account 4 32,000
_______________________________________________________________
51 Supra note 29, Payouts
52 Supra note 49, Annex A.3. p. 16.
Page 40
PAO-2023-03
Small Business Wage Subsidy Program
Reason for The total amount not
No. of Beneficiaries
Unsuccessful Credit credited
No Existing Account 4 32,000
TOTAL 78,221 ₱571,248,500
Source: COA Analysis
130. A review of the program guidelines and issued resolutions indicated that
most of SSS’s procedures were predicated on the assumption that SSS and
employers would communicate effectively. For example, SSS will notify
employers of any problems identified with the credentials of beneficiaries, and
employers will notify SSS if wage subsidies are being claimed incorrectly.
However, SSS also had difficulty contacting employers and responding to
questions and concerns, which impeded updating bank accounts and mobile
phone numbers. One of the factors that hampered the anticipated correction
procedures during the pre-payout phase was the allotted time for employers to
make corrections. Particularly for beneficiaries who elected to receive the wage
subsidy through a money transfer facility, employers are given three days upon
receipt of instruction from SSS to rectify the information.53
131. A review of the SBWS Program database also showed that
20 worker beneficiaries did not receive the second tranche. According to the
program’s guidelines, it is possible that some beneficiaries will not get the second
tranche. This is the case when the beneficiary resides in a region with a wage
subsidy rate over ₱5,000, and the worker is also a DOLE-CAMP 1 beneficiary.
Nevertheless, the needed field in the SBWS Program database is empty, so
whether these beneficiaries are also CAMP beneficiaries is unknown. One of the
20 beneficiaries was marked with an invalid bank account, and another was
marked as an Unclaimed ML Payout. SSS explained that six of the
20 beneficiaries were discovered to have two separate SSS Reference Numbers
but were the same person. SSS further noted that the beneficiaries were
ineligible for the second tranche to prevent duplication of subsidies. While the
remaining 14 beneficiaries were discovered to have received unemployment
benefits and final claims, they were deemed ineligible. Even though these 14
beneficiaries were disqualified, the SSS did not send a demand letter for the
return of the wage subsidy; instead, they were only excluded from receiving their
second tranche of subsidy.
132. Based on the generated disbursement report from the SBWS Program
reporting website (sbws.sss.gov.ph) accessed from the SSS account of the
employers, we found that more than 300 employees did not receive their second
tranche. The following were cited as reasons for these unclaimed and unpaid
subsidies based on interviews and surveys with employers and employee
beneficiaries:
_______________________________________________________________
53Supra note 32
Page 41
PAO-2023-03
Small Business Wage Subsidy Program
1. Lockdown restriction, thus, cannot claim in Money Remittance Center (M.
Lhuillier claim).
2. CAMP-subsidy recipient and choose not to claim.
3. Employers’ queries were unanswered (for resending of reference
number).
133. It is not clear whether the reports posted online were updated. Therefore,
a separate audit query was issued to determine the purpose of the online reports
accessible to employers and whether or not the data accessible to program
beneficiaries was integrated into the SBWS Program database. Nevertheless,
there was no response from SSS Management.
Figure 10: SBWS Program Queries
Source: SPTF Updates Meetings
134. Out of 724,081 queries, 63 percent or 453,548 were answered by
program implementers, while 270,533 remained unanswered and to mitigate this
issue, canned responses and frequently asked questions were issued and
published on the program’s primary media outlet (SBWS Program google drive,
Facebook pages) as shown in Figure 10 above.
135. SSS Management commented that the recording of
rejected/unsuccessful payouts was based only on the SOA data due to the
unavailability of complete reports (Inward Files from the DBP). As of April 26,
2023, SSS still awaits the necessary Inward Files from the DBP to complete the
analysis and reconciliation process. However, based on the email provided by
DBP, a review of the email exchanges between SSS and DBP provided, it was
observed that DBP claimed that the inward files requested by SSS were already
sent to SSS SFTP on October 29, 2021.
136. If SSS completes the analysis and reconciliation process using the
inward files from DBP on October 29, 2021, still grant of a wage subsidy to the
beneficiaries for the ₱6.7 billion rejected/unsuccessful would be possible. Given
Page 42
PAO-2023-03
Small Business Wage Subsidy Program
the fact that, firstly, the SPTF Resolution No. 8 dated August 14, 2020, which
covers the extension of the payout period after June 25, 2020, was applicable
only for beneficiaries who did not receive Tranche 2 wage subsidy and secondly,
the remaining fund of the program was fully returned to the BTr on February 15,
2022.
137. Moving forward, the risk of reoccurrence of pandemic and other national
health emergencies is generally accepted that may result to adoption or
implementation of similar financial relief programs. Taking into account the
lessons learned from the implementation of SBWS Program that heavily relied
to the inputs from the applicants, additional measures such as utilization of
government’s national database could be a source for a reliable and accurate
information to specifically target beneficiaries. As for payout options, to at least
prevent the unsuccessful claims of subsidy due to incorrect bank accounts and
invalid contact information, program implementers may capitalize the use of SSS
UMID ATM card and also the database resulting from the implementation of
Subscribers Identity Manual (SIM) Registration Law.
Page 43
PAO-2023-03
Small Business Wage Subsidy Program
Conclusions 138. The SBWS Program aims to provide wage subsidy for two months to
employees in the formal economy sector who were unable to work due to the
temporary closure of businesses affected by the ECQ or other forms of
quarantine in response to the COVID-19 public health emergency. Considering
the risk of COVID-19 infection and the program’s overarching purpose of
providing immediate assistance to impacted employees, the program
implementer’s decision to employ technology was prudent.
139. The online application system has facilitated the grant of wage subsidies
to the target employees from the small business in the formal economy sector.
Given the time constraints associated in its implementation, the program was
able to distribute wage subsidies aggregating to ₱45.1 billion within three months
out of the ₱51 billion budget. The program has served 3.1 million out of the target
3.4 million employees.
140. In spite of the program accomplishment, its implementation encountered
challenges impacting on program’s effectiveness and efficiency. The program
was not able to achieve its target number of employees from the small
businesses in the formal economy sector. Out of the 1,768,413 target
beneficiary from the non-essential business (Category A), only 1,050,971
benefited from the program leaving 717,442 employees or 41 percent of the
target employees not served. On the other hand, target of 1,638,637 employees
under quasi-essential businesses (Category B) exceeded by 412,077
beneficiaries. It was also notable that employees affected by the pandemic
classified as Category C: Essentials were not covered by the program. SSS
confirmed that one of the factors affecting the attainment of the target in the
non-essential category was information dissemination.
141. There were gaps and limitations noted in the online application system
particularly in data entry, verification process and payout process causing delay
in the processing and payment of wage subsidy. The employees’ name, TIN,
bank account and mobile number encoded by the employers were considered
final and there were no procedures to validate them. As a result, the system was
able to capture incorrect and incomplete information. Later, correction
procedures were instituted but could not accommodate all corrections due to
limited time. The absence of reliable databases of program beneficiaries also
caused incorrect tagging in the processing of applications. These gaps and
limitations caused the distribution of ₱1.92 billion to 132,506 beneficiaries with
duplicate or invalid TINs. The incomplete and invalid information also resulted in
unclaimed payouts for 77,167 and 17,205 beneficiaries in remittance centers and
bank accounts, respectively. Moreover, delayed and unsuccessful release of
payouts defeats the objective of providing immediate relief to intended employee
beneficiaries.
142. The lack of effective monitoring and reporting mechanisms compromises
accountability and transparency in properly using government funds. There were
improper payments that the program implementers should have rectified.
Page 44
PAO-2023-03
Small Business Wage Subsidy Program
Management relied on Employers’ Undertaking and self-attestation to check
employees’ eligibility for the program and recover any potential erroneous
payments. Additionally, implementers relied on COA’s post-audit to identify
ineligible beneficiaries. And due to the inadequate post-implementation
mechanism, recovery of wage subsidy payments to ineligible beneficiaries would
be difficult.
143. In addition, the program’s bank account for voluntary returns from ineligible
SBWS program beneficiaries includes deposits from other programs such as
SAP, 4Ps, and CAMP rendering unreliable accounting of voluntary returns for
the program.
144. Lastly, the implementation challenges and the limited timeframe to
implement the program coupled with the rejection and failure of ₱6.7 payouts,
which were not reprocessed, caused the SPTF Board to return the unutilized
fund of ₱5.7 billion to the Bureau of Treasury. The unutilized fund could have
covered at least 350,757 employees from the affected small business under the
formal economy sector.
Page 45
PAO-2023-03
Small Business Wage Subsidy Program
Recommendations 145. While the program’s implementation has ceased, the same wage subsidy
program for the workers in the formal economy sector may be adopted in future
health emergencies and pandemic with the same responsible agencies.
Considering the lessons learned from the implementation of the SBWS Program
during the COVID-19 pandemic, an enhanced program can be formulated. In line
with the principles of efficiency, economy, and effectiveness, we recommend
measures that can be considered by the SSS in coordination with DOF and BIR:
a) During the planning phase of the program, there is a need to conduct risk
assessment to identify risks and problems and thereafter develop
appropriate strategies and mitigating measures through a work plan to
ensure that implementation is carried out in accordance with the timeline
and objectives of the program. To maximize utilization of fund allocation
and ensure that all affected employees receive equal opportunities to avail
of the wage subsidy program, the identification process and criteria used
in the SBWS Program need to be revisited and improved;
b) The system used in the SBWS Program be enhanced by considering,
among others, additional features relating to preventive validation controls
on data entry required for the application, processing and payout of wage
subsidies. The specific controls should include efficient capture and
validation of TIN and completeness of required information. The use of the
national ID system and SIM may facilitate the verification of program
beneficiaries while the use of SSS UMID ATM cards may prevent payments
to ineligible beneficiaries and/or invalid accounts. In addition, data sharing
from compatible program databases may need to be considered for
efficient and effective validation of applicants in accordance with program
guidelines;
c) There should also be a reliable and accessible mechanism for beneficiaries
to verify the status of their applications and payouts so that any deficiency
can be readily addressed;
d) There is also a need to formulate and implement a robust information
campaign for effective dissemination of program materials and
announcements to avoid misunderstanding and misappreciation of
information and instructions to employers and employees. This information
campaign along with improved process on return of wage subsidy will
ensure efficient, appropriate and correct accounting of return of subsidies
inadvertently provided to the beneficiaries; and
146. In the meantime, to ensure that program funds have been utilized in
accordance with the program guidelines and objectives, the SSS in coordination
with BIR and DOF should:
a) Identify the ineligible beneficiaries from those with duplicate/invalid
TINs or whose TINs were not found in the BIR Database; and
Page 46
PAO-2023-03
Small Business Wage Subsidy Program
b) Take appropriate steps to recover wage subsidies granted to
ineligible beneficiaries.
Page 47
PAO-2023-03
Small Business Wage Subsidy Program
Agency The Management of SSS, DOF, and BIR submitted their comments on the
Report. Their comments were considered, as appropriate, in this Report.
Comments
Contact points for our Performance Audit Office may be found on the last page
of this Report. In addition, significant contributors to this report are listed in
Appendix VI.
In addition, the Report will be available at the COA website, which can be
found at https://www.coa.gov.ph.
MICHAEL L. RACELIS
Director IV
Performance Audit Office
Special Services Sector
Page 48
PAO-2023-03
Small Business Wage Subsidy Program
Appendix I: Objectives,
Scope and Methodology
COA conducted performance audits to help government agencies better perform
their mandate and achieve program goals and objectives more economically,
efficiently, and effectively. It identified the SBWS Program to be audited
considering its materiality and significance being one of the social amelioration
programs to mitigate the socio-economic impact of the COVID-19 health crisis.
The audit aimed to determine: (1) the goals and objectives of the financial
assistance/wage subsidy program implemented by SBWS for the formal
economy sector; (2) the challenges encountered impacting the efficient and
timely implementation of the program; and (3) the extent the implementing
agencies ensure proper administration of the financial assistance/wage subsidy
program.
To determine the goals and objectives of the financial assistance/wage subsidy
program implemented by the tri-agency BIR, DOF, and SSS for the formal
economy sector, desk reviews were conducted on relevant laws, policies, rules,
and regulations related to the SBWS program. These include documentation of
the target number of beneficiaries, budget allocation, budget utilization and
distribution, and SBWS program accomplishments regarding the number of
beneficiaries who benefitted from the program. In addition, the alignment of
SPTF-issued guidelines with the implementation of the SBWS program to
relevant laws, policies, rules, and regulations was also reviewed to determine
whether the objective of the program as economic relief to mitigate the adverse
socio-economic impact of the COVID-19 pandemic was observed and target
beneficiaries were prioritized.
To determine the challenges encountered impacting the efficient and timely
implementation of the program and the extent, the implementing agencies
ensure proper administration of the financial assistance program, the team
performed walkthrough procedures to review the existing controls/mechanisms
in place in processing the applications, which involves the receipt, initial
evaluation, final evaluation/review, and release of financial assistance to payout
centers/money remittance service providers. The team also conducted
interviews and administered questions to BIR, DOF, and SSS Management to
determine their planning, coordinating the monitoring, and reporting processes
related to the implementation of the SBWS program. The team also conducted
meetings and briefings with the tri-agency regarding program implementations,
program walkthrough process, and review of program guidelines to determine
each agency’s respective roles and responsibilities. In addition, the team
analyzed data regarding SBWS program beneficiaries provided by SSS and a
pre-qualified list from BIR. Finally, the team analyzed financial assistance
evaluation completion data and payout distribution.
Further, the team reviewed data-sharing agreements, joint memorandum
circulars, joint resolutions, and advisories relevant to implementing the SBWS
program. The team also analyzed and compared the data from DOLE-CAMP 1
Page 49 PAO-2023-03
Small Business Wage Subsidy Program
Appendix I: Objectives, Scope and Methodology
beneficiaries to determine duplication and incorrect tagging of program
beneficiaries. Moreover, the team administered survey questions to selected
private establishments/applicants and employees/beneficiaries to assess the
level of their awareness of the program, and the challenges they had
encountered in the course of application, communication with the implementers,
tracking the status of the application, and receiving the financial assistance.
The audit was conducted from June 2021 to June 2022. Given the limitations on
travels posed by the localized community quarantine impositions and health
protocols in 2021, in-person interviews, audit fieldwork, and validations were
restricted. As an alternative, most of the audit activities were done using
electronic means. The supposed deadline of the audit execution in January 2022
was extended for three months or until April 2022 excluding the report writing
process. In view of the relaxed protocols in 2022, the team was allowed to use
the audit period extension to conduct audit fieldwork and validation on four
selected Regions, namely NCR, Regions III, VII, and XI. The selected provinces
were Bulacan, Pampanga, Cebu City, Davao City, and Davao del Norte. The
audit fieldwork and validation are comprised of interviews with HR/employers on
the process of applications to the program and administration of survey
questions to private establishments and their employees, who they had applied
for, and become beneficiaries of SBWS.
We visited beneficiaries from the country’s three island groups: Luzon, Visayas,
and Mindanao. Region III for Luzon, Region VII for Visayas and Region XI for
Mindanao. NCR was also included, considering it is the center of the COVID-19
pandemic and the most affected region economically. In addition, samples
selected from Quezon City processed employers/applicants and
employees/beneficiaries were the subjects of the pilot survey. The team also
conducted CAMP-DOLE beneficiary matching based on the data available for
both programs.
The audit followed the Standard for Performance Auditing embodied in the ISSAI
3000. The standard requires that we plan and perform the audit to obtain
sufficient and appropriate evidence to provide a reasonable basis for our findings
and conclusions based on our audit objectives. We believe the evidence
obtained provides a reasonable basis for our findings and conclusions based on
our audit objectives.
Page 50
PAO-2023-03
Small Business Wage Subsidy Program
Appendix II: Application System
Developed for the Program
Method 1 My.SSS Portal54
The first method of application is thru My.SSS portal. The technical experts make
this from application systems development from the ITMG team. The first step is
for the employer to log in to the SBWS portal through the SSS website
(www.sss.gov.ph) using the login account of the employer’s SSS account and the
passcode sent by BIR to the pre-qualified employers. The employer is the one
responsible for encoding the details of employees thru the application system of
SSS (My.SSS Portal). They must input the TIN, mobile number, bank account
number, and other details for the application to proceed. If an employee is not
listed in the SSS list, it may be because (1) the Employee is not yet registered in
My.SSS facility, (2) is disqualified, and (3) lacks information in My.SSS account.
The employer can only confirm the name of the employees listed in the SSS
application system to be included as program beneficiaries.
Method 2 E-form Submission via Secure link55
The 2nd application method is E-form submission through a secure site
(SharePoint). Again, eligible employers were sent a secure email link. Through
this method, the employer receives the email link SSS sent to all pre-qualified
employers on the SSS file. Thru this link, the employer will sign in using their
Microsoft account to log in to the system; if they don’t have a Microsoft account,
they should create one before accessing the link. The next step is for the
employer to encode all the details of its employees applying for the program.
Finally, the employer must sign the electronic undertaking before applying. This
application does not require any BIR-issued passcode given for the employer to
access. You only need the link for the employers to access. Also, you can only
use this method once; subsequent submission is not allowed per employer
account. Once the employer applies, SSS shall process the application and will
update via email on its status.
Method 3: Microsoft Excel file upload to SBWS Portal56
In this method, the employer can download the Excel template and then encode
the list of employees’ data offline before finally uploading the file online. It was
also noted that on this method, you could only submit it once, and no amendments
or edits are allowed using this method. Any request for amendments shall be
made through the My.SSS facility. The file template should not exceed 10 Mb file
size per upload.
_______________________________________________________________
54 Small Business Wage Subsidy (SBWS) Program, Procedure for My.SSS Portal
55 Alternative application guidelines and procedures for small business wage subsidy (SBWS Program) method 2
56 Application guidelines and procedures for Small Business Wage Subsidy (SBWS) Program: File upload
through secure site (Microsoft Excel file upload to https://sbws.sss.gov.ph)
Page 51
PAO-2023-03
Small Business Wage Subsidy Program
Appendix III: SBWS Program Key
Implementers
Department of Finance Bureau of Internal Revenue Social Security System
•Provides Policy and technical •Generate List of Pre-qualified •Process program application
guidance to the program Small Business Employers and •Create secure online platform
•Match the DOLE-CAMP notify them thru email or for the application of SBWS
beneficiaries with SBWS posting in BIR website •Handle subsidy payout and
Program-beneficiaries •Provide list of Pre-qualified notification to
•Monitor, study the impact and Business to SSS employer/employees
report the progress of the •Answer queries and requests •Submit daily report to the
program to the President of the from employers for pre- SBWS Program task force on
Philippines qualification the figures and status of
•Monitor and report the progress applications of employees to
to the SBWS Program task the program
force
The SPTF mainly handled the SBWS Program, consisting of various DOF, BIR, and SSS officers. They
address issues relating to policy, the application process, payout distribution, other related queries, and
concerns about the program.
Page 52
PAO-2023-03
Small Business Wage Subsidy Program
Appendix IV: SBWS Program Process Flow
•BIR create list of pre-qualified small business employer and send them notification thru
email or publish the list of qualified employers in BIR website
•BIR send the list of pre-qualified small business employer to SSS
BIR •Process SBWS program appeals
•
• Qualified small business employers apply online through using any of the 3 methods provided by SSS
(My.SSS, Sharepoint, Azure)
• Confirm the names of qualified employees and provide their details online (TIN, bank account, mobile
Small number)
Business • Once completed employers need to sign the undertaking online and submit the application to SSS
Employer
•Cross matching of DOLE-CAMP beneficiaries to avoid deduplication of subsidy and
send results to SSS
•Approve Payout of Validated SBWS Program applications and send endorsement to
DOF SSS-SBWS taskforce thru email
• Process the application of qualified business employer and remits the subsidy to approved employees to
their respective disbursement account (PESONET banks,Paymaya or M. Lhuillier)
• Send electronic notification to employees when subsidy is credited to their respectives accounts
SSS (PESONET Banks, Paymaya, M Lhuilier).
Page 53
PAO-2023-03
Small Business Wage Subsidy Program
Appendix V: Result of Survey on
Employer of Program Beneficiaries
Page 54
PAO-2023-03
Small Business Wage Subsidy Program
Appendix VI: COA Contact
and Staff Acknowledgments
COA Contact Michael L. Racelis (Director IV),
(02) 8952-5700 local 2022 or mlracelis@coa.gov.ph; pao@coa.gov.ph
Dondon P. Marcos (OIC Director III),
(02) 8952-5700 local 2033 or dondonmarcos.coa@gmail.com
Staff Directors Michael L. Racelis and Roberto D. Mabagos, Jr. provided technical
assistance from planning the audit to developing the report. OIC Director III
Acknowledgments Dondon P. Marcos provided support in developing and reviewing the report. In
addition, State Auditors Ruby L. Caballes (Team Supervisor), Policarpo L. Silva Jr.
(Team Leader), Charmaine L. Chua (Team Member), Mark Anthony G. Cabuco
(Team Member), Gerverlyn Mila (Team Member), Lester M. Camaso (Team
Member), conducted the audit and made key contributions to this report. And,
Mariann U. Ceripulo (Independent Referencer) performed referencing on the audit
report.
Assistant Commissioner Alexander B. Juliano provided invaluable inputs in
finalizing the Report.
Page 55 PAO-2023-03
File and source
- File
- small-business-wage-subsidy-sbws-program-pao-2023-03-pdf_6b1e1cb85f37fb33_wayback.pdf
- Size
- 1,698,852 bytes
- SHA-256
- 2f73b3ecbaa44da11a11ad17a3ada129bfa012f4b9f8c2f4f4c1484faa1e5b94
- Original
- www.coa.gov.ph