•  As at 20 July, RM11.14bn BPN cash aid has been disbursed to 10.416mn recipients (10.4mn recipients or RM11.06bn disbursed in previous week).
•  In BNM's SME Soft Loans Funds, banks have approved loans worth RM9.23bn for over 20,815 SMEs, an increase of RM0.13bn from previous week.
• Under the Wage Subsidy Programme, the applications approved increased to 2.55mn workers as at 20 July (2.53mn workers previously), where RM7.82bn had been approved (RM7.79bn in the previous week)

Implementation of Prihatin Stimulus Packages Currently at 91%

Prime Minister (PM) guided recently that the RM295bn Economic Stimulus Packages (ESPs) have helped to retain more than 2.75 million jobs and 800,000 businesses which include micro and small and medium-sized enterprises (SMEs). At the same time, both stimulus packages are estimated to contribute more than 3% to GDP this year. Recently, PM cautioned that if MCO is needed to be re-introduced and reenforced, the recovery in real GDP growth projection for 2021 may not be realised and the unemployment rate could increase significantly above the current rate of 5.3% in May. If the country were to go into another lockdown, this could result in economic losses of around RM2bn per day.

As for the fourteenth update of the PRIHATIN and PENJANA stimulus packages this week, Ministry of Finance (MOF) guided update on BNM's SME Soft Loans Funds, where banks have approved loans worth RM9.23bn for over 20,815 SMEs, an increase of RM0.13bn from 20,545 SMEs in previous week. For Prihatin Special Grant, to date, the amount disbursed has increased to RM1.64bn benefitting 545,000 SMEs with 90% achievement rate thus far. To assist SME cash flows, SME-Go scheme, a new initiative was launched this month, a financing facility provided by SME Bank to contractors awarded small government projects under the Economic Stimulus Package 2020 (PRE 2020) and PRIHATIN stimulus package. The scheme is expected to benefit 16,000 G2 and G3 class contractors. Under the Wage Subsidy Programme (WSP), applications approved have increased to 2.55mn workers as at 20 July (2.53mn workers previously), where RM7.82bn had been approved (RM7.79bn in the previous week). This was equivalent to about 56.7% of the total RM13.8bn allocation. Finance Minister (FM) noted that economic opening and job retention measures will have a positive impact on the rate of return to work. The Department of Statistics expects the rate of unemployment to be between 3.5% - 5.5% in 2020 where tourism, self-employed including business and small entrepreneurs, manufacturing and services are the expected to be most affected.

As for measures to protect the people, a total of RM11.14bn BPN cash aid has been disbursed to 10.416 million recipients as at 20 July 2020, compared with 10.4 million recipients or RM11.06bn disbursement in the previous week. Another 146k appellants have received their payout with additional disbursement of RM125mn (141k appellants of RM121mn in previous week). It was reported yesterday that the third phase of the Bantuan Sara Hidup (BSH) disbursement will start on July 24 and will benefit 4.28 million recipients with a total allocation of RM3bn. As at July 17, the implementation of Prihatin Stimulus is at 91% with 80 initiatives introduced under Prihatin, Prihatin Plus for SMEs and Penjana.

Minister in the Prime Minister’s Department Datuk Seri Mustapa Mohamed highlighted that infrastructure spending will be vital for economy to remain competitive. There are a number of high-impact projects in the works, such as: - i. Klang Valley Mass Rapid Transit Line 2 (MRT2), ii. Light Rail Transit Line 3 iii. East Coast Rail Link (ECRL) iv. Pan Borneo Highway (PBH), v. Kota Bharu Highway, vi. Central Spine Highway from Kuala Krai to Simpang Pelangai, vii. The Rapid Transit System (RTS) linking Johor Bahru and Singapore.

Source: Affin Hwang Research - 23 Jul 2020