A LAWMAKER has called on the government to provide more funding to help small businesses as they cope with the effects of the pandemic.
“We hope that more funding is given to MSMEs (micro, small and medium enterprises) especially because they do comprise about 99.6% of all the businesses here and they provide 70% of jobs in the Philippine workforce. So it’s very important that we give them all the support that they need,” Las Piñas Rep. Camille A. Villar, who is also a vice-chair of the House committee on MSME development, said in a televised interview on Thursday.
Small Business Corp. (SB Corp.), the financing arm of the Department of Trade and Industry, had announced it was opening a loan program for MSMEs to help them recover.
Its P1.5-million loan allocation is open to micro and small businesses that have been in at least a year of continuous operation by March 2020, and those that “suffered drastic reduction” in business during the pandemic.
Loans can be applied to keeping loan amortizations for vehicles and other fixed assets up to date, inventory replacement for damaged perishable stock, and working capital to restart the business.
Micro enterprises with assets of up to P3 million may borrow between P10,000 to P200,000, while small enterprises with assets not bigger than P10 million may borrow up to P500,000.
Initially, SB Corp. was to impose a 0.5% interest per month, but later scrapped the interest and would only charge 6% service fee. MSMEs that availed of the loan also have a six-month grace period before they start paying the loan for up to 30 months.
However, SB Corp. has reportedly stopped accepting new loan applications last week as the fund was not enough to cover small businesses still reeling from the effects of lockdowns and movement restrictions imposed more than three months ago.
“One of the reasons why it’s very important to discuss the plight of MSMEs is because now you have different sectors really in need of help during this pandemic. Sometimes we overlook MSMEs and the needs of our MSMEs and we focus on the other sectors,” Ms. Villar said, adding that information dissemination is key to address MSMEs’ concerns.
The House of Representatives passed the proposed P1.3-trillion Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (ARISE) bill to boost economic recovery.
Under the measure, P50 billion will be allocated to SB Corp. for existing loans programs for MSMEs for this year and another P25 billion next year while the Philippine Guarantee Corp. will get P20 billion this year and another P20 billion in 2021.
“This (ARISE bill) would have addressed the additional funding for SB Corp. and other government financial institutions like Landbank, Philippine Guarantee Corp. which have programs to help MSMEs. We’re hoping to pass this in August to give help and support to our MSMEs,” Ms. Villar said, but conceding that it may be difficult to implement the measure since the government may not be able to fully finance a total of P1.3 trillion in recovery programs under the measure. — Genshen L. Espedido