DTI rules out rent concessions during MGCQ

THE Department of Trade and Industry (DTI) said rent deferrals will no longer apply during a modified general community quarantine (MGCQ).

The DTI once again changed its policy on rent deferral to apply the grace period consistently to businesses that closed down during the lockdown, regardless of the date businesses are permitted to operate.

The DTI will now require at least a 30-day grace period on rent payments counting from the date the quarantine is lifted.

This applies to residential rent as well as commercial rent for all micro, small, and medium-sized enterprises that were not permitted to operate during the lockdown.

The deferral applies to rent payments due during the enhanced community quarantine (ECQ), modified enhanced community quarantine (MECQ), and general community quarantine (GCQ).

Trade Secretary Ramon M. Lopez said in a mobile message Sunday that the deferral will not be extended to the MGCQ.

“Since MGCQ allows all sectors to operate, although category IV at 50% (capacity), there is no compelling reason to extend,” he said.

Areas outside Metro Manila, Central Luzon, Cagayan Valley, Calabarzon, Central Visayas, Pangasinan, Zamboanga City, Davao City, and Cebu City are under MGCQ.

The DTI in its previous memorandum circular 20-29 signed on June 2, granted commercial lessees grace periods counting from the date their businesses were permitted by the government to operate, whether or not they had resumed operations. Rent owed by businesses that are not yet allowed to operate was deferred by 30 days after the lockdown is lifted or after the date they are allowed to resume operations, whichever comes first.

But the DTI had since amended those guidelines to apply rent deferrals consistently regardless of permission to operate, under memorandum circular 20-31 signed June 4.

The businesses will not incur interest, penalties, or fees from deferred rent. The total rent that fell due within the lockdown is to be amortized over six months after the grace period.

The DTI continued to ask lessors to consider waiving or offering discounts for commercial rent or renegotiating lease term agreements for micro, small, and medium-sized enterprises.

“Enjoining lessors to still extend support like concessional rents or discount on months after the lifting of GCQ, since market demand may start weak,” Mr. Lopez said.

Lessors are not obligated to refund rent payments made during the lockdown.