THE government should continue to support small businesses and the agriculture sector even after lockdown measures are lifted, according to the National Economic and Development Authority (NEDA).
In a paper titled “We Recover As One,” the agency said micro, small and medium enterprises (MSMEs), as well as farmers and fisherfolk will continue to struggle and require help to sustain and restore their livelihood.
“Grants or soft loans should continue to be extended to farmers, fisherfolk and MSMEs to restore and sustain livelihood activities and businesses. Given that most of the losses are in terms of forgone incomes, a guarantee fund may be more adequate. The fund must be able to guarantee loans amounting to about P800 billion,” the NEDA said.
Affected farmers, fisherfolk and other enterprises involved in agriculture, forestry and fisheries should also be helped through zero interest, no collateral, and longer-term credit programs, it said.
NEDA also recommended additional support programs for businesses such as payment deferment to government and debtors, tax credits and low interest loans.
Samahang Industriya ng Agrikultura Chairman Rosendo O. So said the zero interest loans will bring relief to agriculture industry players.
“The zero interest recommendation would be nice but the implementation on how it could reach the agri sector should be clear. It should be clear when they can secure loans,” Mr. So said in Filipino over a phone call.
Mr. So said farmers and agri-businesses would need the government’s aid to reach their market.
“End-users are having a hard time to buy from us so we don’t know how the government will address this. There is also a problem with the buying power of the government,” Mr. So said.
“More credit guarantees would also increase the access of SMEs (small- and medium-sized enterprises) and the agricultural sector to bank loans, at lower borrowing costs as well due to the guarantees,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
Alvin P. Ang, an economics professor at the Ateneo de Manila University, said more direct forms of support would be a better relief measure for small businesses and agri-enterprises.
“(Proposed guarantee fund) okay but why guarantee fund? Why not direct support? There should be direct assistance to retrofit their businesses,” he said by telephone.
Direct support could come in the form of training that will improve capacity and productivity to help businesses gauge how to do their operations in the new normal, Mr. Ang said.
“Operations for MSMEs such as barbershops and small restaurants for the new normal will have a larger cost to reopen because they will only be allowed to operate 50% facility. The cost of adjustment time will be really large,” he said. — L.W.T.Noble