To help micro, small, and medium enterprises (MSMEs) during the COVID-19 pandemic, the Department of Trade and Industry (DTI) is looking into an additional budget of PHP5 billion to continue its zero-interest loan program for MSMEs.
DTI Secretary Ramon Lopez said Tuesday the amount “would be good enough for now” to augment the fund for Covid-19 Assistance to Restart Enterprises (CARES) program.
The DTI rolled out the CARES program through its financing arm, Small Business (SB) Corp., to provide interest-free loans for existing MSMEs whose businesses were affected amid the coronavirus disease 2019 (COVID-19) pandemic and temporary closure of establishments as part of the community quarantine measures.
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The program only collects a 6 percent service charge with a payment period of up to 24 months plus six months grace period.
To date, Lopez said total loan applications amounted to PHP3.5 billion.
However, the DTI only earmarked PHP1 billion for the CARES program.
SB Corp. has stopped receiving new applications but still processing pending applications.
The government will intensify its efforts to help businesses, especially MSMEs, by providing responsive government assistance and services capitalization and business operation support as we adapt to the next new normal.
“We are now allocating our P3 fund for CARES program,” Lopez said in a radio interview.
P3 program, or the Pondo sa Pagbabago at Pag-asenso, is also a microfinancing program of SB Corp. launched in 2017.
The P3 program aims to provide better access to finances for Filipinos to start their own businesses as well as for them to avoid loan sharks like the ‘5-6’ lending scheme that charges huge interest rates.
“We will source funds from other programs and we will reopen [the application for CARES program] this week,” the DTI chief added.
Lopez said DTI will also be getting funds from the Land Bank of the Philippines and Development Bank of the Philippines to continue the CARES program.
One of the highlights of the State-of-the-Nation Address of President Rodrigo Duterte on Monday was the MSMEs sector.
He also urged lessors to come up with amenable arrangements on rents for commercial spaces while directing the central bank and other banks in the country to provide regulatory relief for MSMEs by allowing payment extensions on amortization and payables without incurring penalties and charges.
“The government will intensify its efforts to help businesses, especially micro, small, and medium enterprises or MSMEs, by providing responsive government assistance and services capitalization and business operation support as we adapt to the next new normal,” he added.
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