Government ready to boost MSMEs after COVID-19
Edited: April 9, 2020 to include the new terms for the rent after the extension of the enchanced community quarantine.
The government, through the Department of Trade and Industry, is preparing a P1 billion 'Enterprise Rehabilitation Financing' under the title 'Pondo sa Pagbabago at Pag-asenso.' It allows businesses to borrow up to P500,000 with a 0.5% monthly interest rate.
The recovery fund is open to companies that are in continous operation one year before March 2020, and suffered 'drastic reduction' in sales during the pandemic. Micro companies with assets not worth than P3 million may borrow P10,000 to P200,000 while small businesses with asset size of up to P10 million can borrow up to P500,000.
In an interview with ABS-CBN, DTI Secretary Ramon Lopez said there will be a grace period of 5-6 months for payments and the loan amount is payable in 2-5 years.
DTI said the requirements and guidelines for the fund will be released soon and applications will be open after the quarantine has been lifted.
As for rentals, the Inter-Agency Task Force has approved the 30-day grace period on rental payments of MSMEs during the Enhanced Community Quarantine.
"Under the approved proposal, no interest, penalties and other charges shall be imposed on the deferred payment due. Our agency made the proposal in order to help MSMEs cope up with the slowdown in economic activities because of the coronavirus disease pandemic,” Department of Trade and Industry (DTI) Regional Director Judith Angeles said.
Edit: With the enhanced community quarantine extended, the grace period for rental payments was also extended to include those with due dates up to April 30. Aside from the grace period, the due for these payments will also be required to be paid over six months after the lifting of the lockdown.
Under the same announcement, other loans were also given a 30-day grace period thanks to the Department of Finance. This includes all loans with principal or interest falling within the ECQ period.
“Borrowers covered under the rules include MSMEs, corporate borrowers, individuals, households and other counterparties. Under the guidelines, loans shall not incur interest, penalties, fees and other charges for the 30-day grace period,” Angeles explained.
All credit granting financial institutions under Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Cooperative Development Authority, GSIS and Pag-Ibig are required to adhere to this loan grace period policy. This includes banks, non-stock savings and loans associations, credit card issuers, pawnshops etc.
With these in place, the government is aiming for a speedy recovery for the businesses in the country.