SMALL-BUSINESS LOAN applications filed with the Department of Trade and Industry’s (DTI) financing arm are now triple the initial funding allocated, triggering a scramble to increase the size of the facility offered with the support of state banks.
Trade Secretary Ramon M. Lopez said at an online event Monday that loan applications filed with the Small Business Corp. (SB Corp.) have breached P3 billion.
SB Corp. had P1 billion for loans under the COVID-19 Assistance to Restart Enterprises (CARES) initiative, an economic relief program for micro, small, and medium-sized enterprises. The department had reported that applications topped P2 billion at the start of July.
Loan applications are now at P3.38 billion, across 23,477 applications.
SB Corp. has approved P253.5 million worth of loans for 3,711 applicants.
“Hopefully, early August, ma-approve na almost a billion (I hope additional funding of nearly a billion will be approved by early August),” Mr. Lopez said.
He said in a mobile message that the department is still in talks with the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP).
“(The) amount (is) being discussed,” he said.
The department also plans to tap into the P3.5 billion worth of funding from its P3 (Pondo sa Pagbabago at Pag-asenso) portfolio.
“What is important is may pera (there is money) for the sector. Whether that goes to the DTI SB Corp. or LANDBANK or DBP. As long as it is funnelling to the sector, that would be a big help because it is really important that this will keep the companies afloat,” Mr. Lopez said at the online event.
Under the CARES program, micro enterprises with assets not exceeding P3 million may borrow between P10,000 and P200,000 while small enterprises worth up to P15 million may borrow up to P500,000. SB Corp. currently charges no interest but applies a 6% service fee.
The loan proceeds can be used to update loan amortizations for vehicles and other fixed-asset loans; replenish inventory in the case of damaged or perishable stock, and working capital to restart the businesses.
Philippine Chamber of Commerce and Industry President Benedicto V. Yujuico said at the same event that more than half of the chamber’s members he consulted have stopped operations.
Those that have resumed operations are at lower capacity, with employment down to 30% of pre-pandemic levels.
“Their uncertainty is focused primarily on how long the COVID-19 pandemic will last,” he said, noting that most hard-hit businesses are in the tourism and related sectors.
He said the key elements to recovery are successful epidemic control, resumption of economic activity, and rebuilding business and consumer confidence. — Jenina P. Ibañez