DAP: Unemployment data shows blanket loan moratorium should be extended

DAP said the number of unemployed individuals and labour force participation in June showed that the blanket loan repayment moratorium was still necessary.

Although the unemployment rate was now down to 4.9 percent from a record high of 5.3 percent in the preceding month, DAP secretary-general Lim Guan Eng, in a statement today, said that the devil was in the details.

"According to the Department of Statistics (DOSM), the number of unemployed persons was estimated at 773,200, down from an estimated 826,100 the previous month.

"(Yet,) year-on-year, the number of unemployed persons still rose by 251,800 (compared to June 2019)," said Lim, while pointing to DOSM's other finding that the labour force participation had dropped from a record 68.9 percent in January to 68.1 percent, which is similar to 2017's level.

Should the blanket loan moratorium be allowed to expire as planned on Sept 30, Lim predicted that the unemployment rate would rise again as businesses would collapse.

In view of this, Lim urged Putrajaya to extend the blanket loan repayment moratorium for another six months to March 31 next year.

Lim, reiterating his previous statements, said banks could well afford another six months extension as the industry had posted a profit of RM32 billion in 2019.

On July 27, Finance Minister Zafrul Abdul Aziz told Parliament that banks would suffer losses of RM6.4 billion due to the moratorium, which would end on September 30.

"Even if the banks are unwilling to cough up the cost of RM6.4 billion, the federal government can bear the cost of RM6.4 billion to aid the 7.7 million individual borrowers and 245,000 SMEs (small and medium enterprises).

"With the expected weak second-quarter GDP growth to be announced soon, there is even greater urgency to continue economic measures that can help shield ordinary Malaysians and businesses from the devastating impact of Covid-19," said Lim.

Currently, Putrajaya's policy for banks is to only provide a three-months moratorium extension for borrowers who lost their jobs.

For individuals or firms whose income is affected by the Covid-19 outbreak, they are encouraged to negotiate new loan terms with their banks. - Mkini