Ministry of Finance
Malaysia

PRIHATIN RAKYATECONOMIC STIMULUS
PACKAGE

2020

PRIHATIN RAKYATECONOMIC STIMULUS PACKAGE(PRIHATIN)

27 MARCH 2020
PUTRAJAYA

2020
PRIHATIN

PRIME MINISTER OF MALAYSIA
PREFACEThe spread of the COVID-19 pandemic has a significant impact on world economic
development. In Malaysia, the outbreak has now entered the second wave. As such,
the Government implemented the Movement Control Order from 18th March to 14th April
2020 throughout the country. The objective of this measure is to prevent more rakyat
from getting infected and provide an opportunity for the Government to accelerate thecurbing efforts.
However, the measure limits overall economic activities and affects the income ofvarious groups of people. The situation is a concern to all of us, especially among
the low-income and vulnerable groups who are unable to continue their daily activities
amid heightening uncertainty and challenging environment.
Thus, the Government, through the Prihatin Rakyat Economic Stimulus Package(PRIHATIN), has reviewed and enhanced the previous package to protect every
segment of society. These include an additional allocation to the Ministry of Healthfor medical equipment and personnel and providing assistance in terms of cash andin-kind to affected groups. Measures were also introduced to protect jobs as well as
funds to support businesses, especially SMEs.
I urge all parties to cooperate with the Government in the fight against COVID-19 andenable the nation to return to normalcy.

TAN SRI DATO’ HAJI MUHYIDDIN BIN HAJI MOHD YASSINPUTRAJAYA
27 MARCH 2020

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INTRODUCTION
The COVID-19 outbreak that has been declared as a pandemic by the World HealthOrganization (WHO) has disrupted global economic growth including Malaysia. In
response to the outbreak, the Government implemented the Movement Control Order(MCO) to curb the spread of the disease and protect the rakyat. The measure has
constrained the daily activities of the rakyat and businesses, thus affecting their income.
2.

To mitigate the impact of COVID-19 and the MCO, the Government introduced

the Prihatin Rakyat Economic Stimulus Package or PRIHATIN, an enhancement to
the Economic Stimulus Package announced on 27th February 2020. The RM250 billion
Package is expected to ease the burden of the rakyat and the business community.
3.

Of the total amount, almost RM128 billion is channelled to protecting the welfareof the rakyat, RM100 billion for supporting businesses, including Small and Medium
Enterprises (SMEs) and RM2 billion to strengthen the economy, while the remaining
RM20 billion was announced in the previous stimulus package.
4.

The PRIHATIN package will provide immediate assistance to ease the burdenof all segments of the rakyat and ensures that no one is left behind. The stimulus
package outlines three objectives as follows:First: Protecting Rakyat

Second: Supporting Businesses

Third: Strengthening Economy

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FIRST OBJECTIVE: PROTECTING RAKYAT5.

The spread of the COVID-19 outbreak is impacting the lives of the entire populace.

The outbreak has affected the daily activities of the rakyat at various levels, including
households, students, workers, businesses in particular the healthcare personnel. In
this regard, measures designed under this objective focuses on curbing the spread of
the COVID-19 outbreak, providing assistance to the affected households and individuals
as well as protecting workers.

Curbing the Outbreak of COVID-19
6.

To curb the spread of COVID-19 outbreak, the Government announced an

allocation of RM500 million to the Ministry of Health (MOH). This allocation is topurchase medical apparatus such as ventilators and ICU equipment, personal protective
equipment (PPE) for public medical personnel as well as laboratory requirements
for testing COVID-19. The Government is also allocating an additional RM1 billion
to purchase equipment and services, which include obtaining medical expertise fromprivate healthcare service providers to contain the outbreak.
7.

The insurance and takaful industry pledges RM8 million for COVID-19 testingat private hospitals. Policy and takaful medical certificate holders instructed by the
MOH to undergo the test will receive an assistance of up to RM300. Meanwhile, family
takaful and insurance companies will offer a 3-month suspension on premiums.
8.

In the earlier stimulus package, the Government provided a special allowance todoctors, nurses and medical personnel involved directly in curbing and preventing theoutbreak. The Government is aware that in this challenging situation, the healthcare
personnel are working tirelessly under stress and enormous pressure. Nevertheless,they continue to battle against this great challenge. Recognising their sacrifices, theGovernment will increase the special allowance from RM400 to RM600 per montheffective 1 April 2020 until the outbreak ends.

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9.

The Government also agrees to provide a special monthly allowance of RM200

to military, police, customs, immigration, firefighters, Civil Defence Forces and RELA
members directly involved in enforcing the MCO. This allowance will also be paid
beginning 1 April 2020 until the COVID-19 outbreak ends. About 169,000 additional
frontliners are expected to benefit from this initiative.

Bantuan Prihatin Nasional
10.

The Government empathises with the rakyat who are financially affected following

the calamity. To ease their burden, the Government will provide a one-off cash assistance,
Bantuan Prihatin Nasional (BPN) with an allocation of RM10 billion. For the first time,
the aid will also be channelled to the M40 group. Among the beneficiaries include
employees in the private sector, FELDA settlers, farmers, fishermen and small traders
The payments include:No.

Beneficiaries

April 2020

May 2020

Total

1

Households earning

RM1,000

RM600

RM1,600

RM500

RM500

RM1,000

RM500

RM300

RM800

RM250

RM250

RM500

≤RM4,000 per month(4 million households)
2

Households earning
RM4,001 – RM8,000 per month(1.1 million households)

3Single individuals earning≤RM2,000 per month(3 million individuals ≥21 years old)

4Single individuals earning
RM2,001 – RM4,000 per month(400,000 individuals ≥21 years old)

11.

Meanwhile the remaining cash transfers under the Bantuan Sara Hidup (BSH)

programme totalling RM3.2 billion will be paid out in July 2020.

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Assistance to Students
12.

The Government is also mindful of the needs of students at institutions of higher

learning. They will be provided with a one-off cash assistance of RM200 per student,
which will be disbursed in May 2020. The support totalling RM270 million is targeted
for students at various levels of tertiary education, including form six, matriculation,community colleges, polytechnics, as well as public and private institutions of higher
learning.

Assistance to Vulnerable Groups
13.

The Government is also concerned about the vulnerable groups such as seniorcitizens and children in shelters, the disabled, homeless and orang asal. Thus, theGovernment will work together with non-governmental organisations (NGOs) and relevantsocial entrepreneurs to provide food assistance, healthcare and shelters with a total
allocation of RM25 million.

Deferment of Loan Repayment under the Skills Development Fund
Corporation
14.

The Government has previously agreed to defer the Perbadanan Tabung

Pendidikan Tinggi Nasional (PTPTN) loan repayment for all borrowers for six months.
This initiative involves a sum of RM750 million. Similarly, the Government agrees topostpone loan repayment to borrowers of the Skills Development Fund Corporation(PTPK) for the same period beginning 1 April 2020 to 30 September 2020. With anestimated collection of RM149.2 million, this initiative will benefit 174,500 borrowers.

mySalam15.

Currently, under mySalam hospitalisation benefit, B40 patients infected with

COVID-19 are entitled for income replacement claims of RM50 per day for a maximumof 14 days. The Government will extend this benefit to quarantined B40 patients underinvestigation (PUI).

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Private Retirement Scheme
16.

The Private Retirement Scheme (PRS) initiative is an alternative to retirementsavings. In this challenging time, the rakyat would require cash for daily expenses
regardless of the sources of savings. Accordingly, the Government allows pre-retirement
withdrawals from Account B of PRS up to RM1,500 per member without any tax
penalties between April and December 2020.

Exemptions and Postponement on Housing and Business Premise
Rentals17.

The Government is also concerned about the hardships faced by the urban B40

group, especially those who live in the Projek Perumahan Rakyat (PPR) and Public
Housing. In this regard, the Government previously announced a one-month rental
exemption for the PPR which is now extended to six months with a cost of RM3 million
borne by the Government.
18.

The initiative involves 3,636 units of PPR homes for rental or transit under the

Ministry of Housing and Local Government (KPKT). Meanwhile, for the rent-to-own(RTO) units, a six-month moratorium is provided effective April until September 2020,
involving 4,649 RTO units at RM5.7 million.
19.

As for Public Housing, the Kuala Lumpur City Hall will provide similar exemption

which will benefit more than 40,000 tenants. Towards this end, the Government urges
other state governments and local authorities to extend the same benefits to ease theburden of the rakyat.
20.

The Government has also approved a six-month lease exemption on all premises

owned by the Federal Government such as school canteens, nurseries, cafeterias,
convenience stores and others. This includes all premises owned by agencies andstatutory bodies of the Federal Government. Again, the Government urges all thestate governments, local authorities and Government-linked companies (GLCs) to grant
similar exemptions.

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Electricity Bill Discounts
21.

Previously, the Government allocated RM500 million to provide a 15% discounton electricity bill for the tourism sector as well as a 2% discount for commercial,industrial, agricultural and household sectors in Peninsular Malaysia beginning 1 April
2020. The Government with Tenaga Nasional Berhad (TNB) will increase the allocation
to RM530 million with the introduction of a tiered-discount system for households.
The discounts range between 15% and 50% according to the electricity usage with amaximum of 600 kilowatts per month as below:

22.

Electricity Consumption per Month

Discount Rates≤200 kilowatts

50%

201 – 300 kilowatts

25%

301 – 600 kilowatts

15%

The discount will be valid for six months beginning in April 2020. Meanwhile,the 2% discount announced previously is still applicable to all households with monthly
usage more than 600 kilowatts.

Telecommunication Services Incentives
23.

Several special packages are offered in collaboration with telecommunicationcompanies. These include free internet services to all customers during the MCO
period starting 1 April 2020 involving a value of RM600 million.
24.

Furthermore, telecommunication companies will invest an additional sum of

RM400 million in widening the network coverage and capacity as well as maintaining
stable and high-quality telecommunication services.

Assistance to Civil Servants and Pensioners
25.

The welfare of civil servants who remain loyal to the nation in carrying out their

responsibilities is also not neglected. Recognising their contribution, the Government
will provide a one-off cash assistance of RM500 to more than 1.5 million civil servants
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of grade 56 and below, including contract workers. The payment will be made in April
2020. Meanwhile, more than 850,000 Government pensioners will be given a one-off
assistance of RM500 in April 2020.

Food Security
26.

During this critical period, it is vital to ensure sufficient food supply. In this regard,

the Government will allocate RM1 billion for Food Security Fund. Apart from that, theGovernment will continue to channel various assistance to farmers and fishermen,
including agricultural inputs to increase domestic production.
27.

The Government will also provide RM100 million for the development of

infrastructure for food storage and distribution as well as crop integration programme.
The Government also allocates RM100,000 to RM200,000 to viable Pertubuhan Peladang
Kawasan and Pertubuhan Nelayan Kawasan. This is to develop agro-food projects thatare capable of generating income within three to six months. The measure involves
an allocation of RM64.4 million.

Job Retention Programme
28.

The Government will introduce Wage Subsidy Programme to assist employers

in retaining their workers. In this challenging situation, the Government hopes theworkers are not being retrenched and lose their income. Through this programme, theGovernment will provide a salary of RM600 per month to every employee for threemonths. The programme is dedicated to workers earning less than RM4,000 and
employers experiencing more than 50% decrease in their income since 1 January 2020.
Employers must ensure that there are no retrenchments or imposing unpaid leave or
wage cut for the next three months after the programme. This measure is estimatedto benefit 3.3 million workers with an allocation of RM5.9 billion.

Cash Assistance for E-Hailing Drivers
29.

The implementation of the MCO affects the daily income of full-time e-hailingdrivers. To ease their burden, the Government will provide a one-off cash assistance of
RM500 to 120,000 e-hailing drivers with a total allocation of RM60 million. Previously,
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the Government announced that the taxi drivers will receive one-time aid of RM600
which will be paid beginning 1 April 2020.

Payment for Workers under Government Contracts during MCO
30.

To ensure the welfare of workers involved in contracts such as cleaning andsupplying food in schools, public higher learning and training institutions as well asother government agencies, including statutory bodies, the Government has agreed
to pay salaries to the workers of service contractors despite their absence during the
MCO. More than 80,000 employees will benefit from this initiative involving RM110
million.
31.

The Government also agrees to extend the contract period by one month as atrade-off with the MCO period.

SECOND OBJECTIVE: SUPPORTING BUSINESSES
32.

The second objective is to assist the business sector, especially SMEs, byproviding and enhancing funds to support the company’s cashflow through various
measures.

Fund to Assist Small and Medium-Sized Enterprises
33.

To assist SMEs, including micro-entrepreneurs, the Government and Bank Negara

Malaysia (BNM) will provide additional funds of RM4.5 billion. The fund covers thefollowing key initiatives:●

First: Increasing the size of the Special Relief Facility (SRF) fund by RM3billion to RM5 billion for SMEs. The interest rate for the entire fund will be
reduced from 3.75% to 3.5%;●

Second: Increasing the size of the All Economic Sector Facility fund by
RM1 billion to RM6.8 billion to enhance access to financing for SMEs;

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Third: Providing additional funds of RM500 million under the Micro Credit
Scheme to a total of RM700 million for soft loans at 2% interest rate without
collateral. Loan eligibility requirements are also relaxed to a minimum of six
months of operation as compared to one year operation. Furthermore, themaximum financing amount is increased from RM50,000 to RM75,000 for eachentrepreneur. The initiative which will be administered by Bank Simpanan
Nasional (BSN) and TEKUN Nasional is open to all micro-entrepreneurs inall business sectors including child-care centres, taxi and bus operators,
online businesses as well as those who are in the creative industry;●

Fourth: SMEs with business records of less than four years can leverage
the BizMula-i and BizWanita-i schemes for financing up to RM300,000 under
the Credit Guarantee Malaysia Berhad (CGC); and●Fifth: Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will provide RM5billion worth of guarantees with the guaranteed coverage increasing from
70% to 80% for SMEs that face difficulties in obtaining loans.

34.

Through these initiatives, financial institutions will provide the needed support

to viable SMEs, especially in weathering the current economic challenges.

Assist Business Cashflow
35.

The Government is also concerned about owners of companies facing cashflow

constraints. To assist those affected, the Government will implement the following
measures:●First:The Employees Provident Fund (EPF) will introduce the Employer

Advisory Services programme from 15 April 2020. This service includes
options for deferring payments, restructuring and rescheduling of employers’
contributions. The measure is expected to provide cashflow to employers
which is estimated at RM10 billion, benefitting over 480,000 SMEs andaffected companies while securing more than 8 million jobs.

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Second: Exempt payment for Human Resources Development Fund (HRDF)
levy across all sectors for six months beginning April 2020. This measureis expected to assist companies’ cashflow with a total savings of RM440
million; and●Third: Empathising problems faced by some 750,000 SMEs, the Government,
allows the postponement of income tax instalment payments to all SMEs forthree months beginning 1 April 2020. This is in addition to the previously
announced measures where the Government postponed tax instalment
payments to affected businesses in the tourism sector for six months
beginning 1 April 2020. Other affected sectors are also allowed to revise
the amount of income tax imposed in the third, sixth and ninth instalments
during the basic accounting period.

36.

To assist SMEs and individuals, the Government welcomes the willingness ofbanking institutions to offer a 6-month moratorium, converting of credit card balance
to term loans and restructuring of corporate loans. This measure is vital to enablingcompanies to retain employment and immediately resume their business activities.
This initiative is worth at least RM100 billion.
37.

The Government also extends its appreciation to BNM and the banking industry

for providing this flexibility. In return, the Government agrees that the bank’s income
from interest or profit from loans or financing during the moratorium will only be taxable
when the income is received after the moratorium period.
38.

Effective 1 April 2020, the moratorium will be extended to loans from TEKUN

Nasional, Majlis Amanah Rakyat (MARA) as well as other cooperatives and Government
agencies providing financing facilities.

Social Financial Programme39.

In assisting B40 entrepreneurs and loss of employment, a social financing

programme will be introduced in collaboration with Islamic banking institutions, thestate Islamic religious council and key implementing partners. Social donations will
be channelled in the form of initial capital for micro-entrepreneurs using zakat funds
and matched with microfinancing at affordable rates.
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40.

The first phase of the collaboration between Bank Islam Malaysia Berhad andthe Federal Territory Islamic Religious Council will commence in May 2020. Eligible
entrepreneurs will be given training in entrepreneurship and financial management aswell as support to develop their businesses.

Guarantee Facility Scheme for Corporates
41.

The corporate sector is also affected by the current situation. As such, theGovernment welcomes the efforts of banking institutions in restructuring repaymentsof the corporate sector in line with their business performance.
42.

The Government will also provide a RM50 billion guarantee scheme up to 80%of the loan amount for financing working capital requirements. The programme will
be managed and is subject to credit evaluation by Danajamin. The facility is targetedat viable businesses in all sectors facing difficulties following the COVID-19 outbreak.
The minimum guaranteed loan size is RM20 million per company. This facility will beavailable for application from 1 May to 31 December 2020 or until the fund is fully
utilised.

THIRD OBJECTIVE: STRENGTHENING ECONOMY
43.

The measures announced in this Package are aimed at ensuring continuous

economic activities, primarily through the disbursement of various cash assistances,
particularly Bantuan Prihatin Nasional. The Government will also focus on domestic
investment activities with high multiplier effects to preserve jobs.

Focus on Domestic Investment Activity
44.

The Government has identified several small projects such as improving roads,

upgrading dilapidated schools in Sabah and Sarawak, cleaning houses of worship andpolice stations as well as upgrading tourism facilities with an allocation of RM2 billion,
benefiting contractors from G1 to G4 class.

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45.

At the same time, the RM2 billion for small projects announced in the previous

package will be implemented in April 2020. These projects include infrastructure projects
in FELDA and other areas valued at RM600 million as well as upgrading dilapidated
schools in Sabah and Sarawak (RM350 million) and Perumahan Rakyat Termiskin(RM150 million).
46.

The Government will also continue with the implementation of all projects allocatedin the 2020 Budget including East Coast Rail Link (ECRL), Mass Rapid Transit Line
2 (MRT2) and the National Fiberisation and Connectivity Plan (NFCP). This is in linewith the Government’s focus to ensure sustainable economic growth.

Ensure Sustainability of Fiscal and Debt Position
47.

The PRIHATIN Package highlights the Government’s concern over the welfare

and well-being of the rakyat. Towards this end, the Government will provide a directfiscal injection of RM25 billion to ease the burden of rakyat and businesses. The
strategies and measures to be implemented are based on current fiscal capacity andliquidity in the domestic financial market.
48.

The Government will ensure a surplus in the fiscal current account and will notborrow to finance operating expenditure. Almost all of the measures are one-off toease the Federal Government’s financial burden in the medium-term. This is important
to ensure the Government’s fiscal sustainability and debt level. Thus, the Government
will return to fiscal consolidation measures in the medium-term to create fiscal spacein the long-term.
49.

Towards mitigating the plight of the rakyat, the Prime Minister, Ministers and

Deputy Ministers have agreed to a two-month salary deduction which will be channelled
to the COVID-19 Fund.
50.

Furthermore, all Ministries are required to review their budgets to identify savingsto partly finance the measures in the package.

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FINANCIAL INJECTION
51.

The PRIHATIN package involves RM250 billion injection into the economy fromthe following sources:
Fund

RM million

Federal Government
Bantuan Prihatin Nasional

10,000Wage Subsidy

5,900

Small Infrastructure Projects

2,000

Healthcare (COVID-19)

1,500

Food Security Fund

1,000

Micro Credit Scheme

500

Assistance for Tertiary Student

270

Others630

Economic Stimulus Package (PRE1)

3,200
25,000Public and Private Institution
Loan Moratorium

100,000

Danajamin: Financing Guarantee Scheme

50,000

EPF: i-Lestari Scheme

40,000

EPF: Employer Advisory Services

10,000

BNM: Facilitation Fund

4,000

Others4,500

Economic Stimulus Package (PRE1)

16,500225,000

TOTAL

250,000

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CONCLUSION
52.

Overall, the PRIHATIN Package outlines various measures to ease the burden of

the rakyat affected by the COVID-19 outbreak, especially households and businesses.
Through the implementation of this Package, the Government is confident that thedisease will be curbed and the well-being of the rakyat is restored. The measures areintended to provide relief to the rakyat in terms of income assistance. At the sametime, businesses receive aid in terms of capital funds and cashflow to sustain theirbusinesses and retain their workers.
53.

The Ministry of Finance through Unit LAKSANA will ensure that the PRIHATIN

package worth RM250 billion will reach the rakyat swiftly. The Federal Government
will work with all state governments, particularly in Sabah and Sarawak in ensuring
all assistance provided by the Government reaches the targeted group as planned.

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Ministry of Finance
Malaysia

Ministry of Finance Malaysia

No. 5, Persiaran Perdana
Precinct 2, Federal Government Administration Center
62592 Federal Territory of Putrajaya
T. +603 8000 8000
F. +603 8882 3893 / + 603 8882 3894
W. pro [at] treasury [dot] gov [dot] my