THE RM260 billion Prihatin economic stimulus package appears to ease the financial difficulties of people during the movement-control order (MCO) period, a survey has found.

The Covid-19 hardship survey by the Asia School of Business found that 67% of bottom 40 (B40) respondents moved from negative to positive cash flow after the stimulus package was implemented, while another 29% of middle 40 (M40) respondents reported the same.

The survey covered 2,360 respondents.

“It is clear the package is sufficient to resolve these cash-flow issues, at least in the interim. For the B40, it has actually improved short-term cash flow relative to the pre-MCO baseline, although this may come at the cost of poor households accruing more debt in the long run,” the survey said.

The survey also showed that the stimulus reduced the likelihood of bankruptcy in one month or less among cash-flow-negative M40 respondents.

Included in the package is the Bantuan Prihatin Nasional (BPN).

BPN is a RM11 billion cash aid intended to ease financial difficulties among the B40 and M40 groups.

Nurul Hidyawaty, a school cafeteria worker, told The Malaysian Insight her livelihood has been severely affected since the government announced the closure of schools due to Covid-19 on March 18. 

“I was badly affected when the MCO first began, because both my husband and I work at the same place, so there was really no other income,” said the 36-year-old.

Nurul, a mother of two, said it was a struggle for the family in the first few weeks as she has a seven-month-old baby and a special needs child who needs to go for therapy every week.

“When I received the initial RM1,000 aid, I immediately bought an oven and started a roast chicken business,” she said.

With no hint of schools reopening in the near future, Nurul, however, is not too worried as she now has a side income to sustain the family’s needs.

According to the Finance Ministry, as much as RM5.5 billion has been given out to 7.78 million recipients.

The ministry said there are currently around 10.6 million BPN recipients.

Zunaida Mohamed, 50, told The Malaysian Insight that when the MCO was first announced, her husband, who works as a personal driver, was told to take paid leave without allowance.

However, Zunaida said her husband’s basic salary of RM2,100 was not enough as the family counted on his allowance and overtime pay, which could get them between RM3,000 and RM3,500 monthly.

“When my husband was asked to take paid leave without allowance, it really stressed our finances, so we had to be really frugal,” she said.

The mother of three said with the BPN aid, she is able to buy groceries for her family.

“If we have to depend on my husband’s basic pay, then it really would not be enough to survive,” she said, adding that the reason she is unable to work is due to diabetes and high blood pressure, leaving her husband as the sole breadwinner.

The BPN aid is divided between B40 and M40 households and also includes individuals.

The ministry said the first phase of BPN began on April 6 and the second phase on May 4.

“The stimulus package does help a bit, but it is still not enough, as the cost of living is still very high,” said Maslina Salleh, who is now selling Korean chicken to cope with daily expenses.

“I got RM1,000 from the first phase of BPN and with it, I paid utility bills, internet for my children to study, and daily expenses for food that can sometimes come up to RM100,” she said.

The RM1,000 lasted less than a month, said Maslina.

Her husband works as a labourer but with the current situation, he is now jobless. As a result, Maslina foots the bill for the family’s expenses.

As for kuih seller Siti Rahayu, the BPN has helped ease the burden on her family.

“With that money, we get to buy our groceries and pay our house bills,” said homemaker, 39.

According to the survey, the stimulus package is likely to address most of the cash-flow issues brought on by the Covid-19 crisis temporarily.

“While the policies decrease the rate of short-term insolvency in its simulation, there is still a significant number of respondents who may deplete their savings in the next few months, particularly among members of the B40 with no savings,” the survey said. – May 11, 2020.