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Rediscount facility untapped for eighth month in a row

BANKS DID NOT avail of the central bank’s rediscount facility in May, reflecting ample liquidity in the financial system.

“There are no availments under the Peso Rediscount Facility and the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) covering the period Jan. 1 to May 31,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

May was the eighth straight month that lenders left the rediscount facility untapped.

Through the rediscount window, the central bank lets banks get additional money supply by posting their collectibles from clients as collateral.

For their part, banks may use the cash — denominated in peso, dollar or yen — to disburse more loans for corporate or retail clients and tend to unexpected withdrawals.

In 2020, the rediscount window was only tapped by banks in March, April, August and September. Total loan availments last year dropped 77.7% to P26.9 billion from the 2019 level.

Meanwhile, the EDYRF was left untouched last year.

Banks have no urger need to tap the rediscount window due to the robust liquidity level in the financial system, which came on the back of central bank intervention at the height of the crisis paired with lower demand for loans, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said on Thursday.

Last year, the central bank slashed the reserve requirements of big banks by 200 basis points (bps) to 12% and trimmed those for thrift and rural banks by 100 bps to 3% and 2%, respectively.

BSP Governor Benjamin E. Diokno has said the regulator’s policy actions have infused over P2 trillion in fresh liquidity into the financial system.

But even with banks being awash with cash, lending has remained tepid as both financial institutions and borrowers continue to be risk averse due to lingering uncertainty as the crisis stretches on. Outstanding loans by big banks contracted for the fifth straight month in April, dropping by 5% from the year prior.

Meanwhile, for this month, applicable rates for peso rediscount loans will be at 2.5%, regardless of maturity.

On the other hand, rates for dollar and yen-denominated rediscount borrowings regardless of maturity are set at 2.17638% and 1.91417%, respectively. — L.W.T. Noble

Two more firms join green energy option program

PHOTOANGEL/FREEPIK.COM

THE Department of Energy (DoE) has authorized two more suppliers of renewable energy (RE) to participate in the government’s green energy option program (GEOP), bringing up the number of eligible firms to 12.

In an announcement on Thursday, the DoE said that Shell Energy Philippines, Inc. (SEPH) and Green Core Geothermal, Inc. (GCGI) can now participate in the GEOP. SEPH is a retail electricity supplier of Pilipinas Shell Petroleum Corp., while GCGI is owned by Energy Development Corp.

The two firms join 10 renewable energy suppliers that were previously announced as qualified to join the program, and were awarded GEOP operating permits by the DoE.

Launched in 2018, the GEOP is a voluntary policy mechanism that allows users consuming at least 100 kilowatts of power to source their supply from qualified retail energy suppliers that source electricity from renewables.

Sources at EDC said on Thursday, GCGI will be allocating over 200 megawatts (MW) in capacity for the program. They added that the Luzon-based Bacman Geothermal, Inc., which earlier received clearance to participate in the GEOP, will allot 130 MW.

BusinessWorld reached out to Pilipinas Shell on the planned attributable capacity of SEPH for the GEOP, but the firm has yet to comment as of deadline time.

In April last year, the DoE issued guidelines for suppliers that wanted to participate in the program.

The department circular, “guidelines governing the issuance of operating permits to renewable energy suppliers under the green energy option program” states that RE suppliers covered by the program must:

– Comply with the terms and conditions of the GEOP operating permit;

– Submit annual reports to the DoE’s Renewable Energy Management Board on or before Jan. 30;

– Ensure that the total power from its facilities are greater or equal to the total kilowatt hour sold to its consumers;

– Register in the Wholesale Electricity Spot Market and with the Central Registration Body before supplying power to end users; and

– Register with the RE Registrar.

The GEOP gives more end users the chance to access clean power from qualified RE firms. — Angelica Y. Yang

Stuff to do (06/11/21)

Lapu Lapu rock opera streams this weekend

AS an Independence Day treat, the Earthday Jam team will be streaming the musical Lapu Lapu, the Neo Classic Ethno Rock Opera on YouTube on June 12 for 24 hours, for free. With music by Jose “Toto” Gentica V and libretto by Victor Henry Tejero, the opera follows the 1521 story of how Ferdinand Magellan brings Christianity to the country and ultimately dies in battle with Lapu-Lapu in Mactan. To watch, visit https://www.youtube.com/watch?v=JDO9HwGhY5s.

Arts and crafts market at Eton Centris

PUESTO Manila and Eton Centris present We Art Centris, a pocket arts and crafts market arrives in Quezon City. There will be artworks, stickers, keepsakes, handmade jewelry, journals, shirts, bags and other handcrafts on sale on June 11 to 13, and June 18 to 20 at the Centris Walk, Eton Centris. The art and craft booths will be set apart from each other. Face masks and face shields should be worn at all times. For more information, visit www.facebook.com/puesto.manila/posts/4131227710325916.

Art Fair closes with talk on Arturo Luz

THE ART Fair Philippines 2021 website will close with an event celebrating National Artist Arturo Luz, who passed away recently at the age of 94. RTFAIRPH/TALKArturo Luz: Personal Views will be held on June 15, 6 p.m. A panel composed of Ambeth Ocampo, Andy Locsin, Tina Bonoan, and Malu Gamboa will share reminiscences and personal stories of the artist. It will be moderated by Boots Herrera.

A global mindset

THE recent exploits of Yuka Saso, a teener who won the golf majors will surely get a lot of coverage in the news for it represents a first for the Philippines. But it validates what we all know from our army of overseas Filipino workers. We may be a small nation but in the global stage, we are a people who can compete and perform in the highest level.

In order to do so, we need to support those with the potential. Yuka was lucky to have a private company, ICTSI, that backed her up at the start. There’s a running joke in one of my Viber groups that lauded the private sector’s support and hoped the government wouldn’t step in as it might jinx the winning streak. Levity aside, young athletes like Yuka should get support from all sides if the Philippines is to showcase its talent.

The support need not be totally financial. It can be seen in other forms. Look at the case of Kiefer Ravena, the local basketball phenomenon trying to get into a Japanese league. A column by sportswriter Homer Sayson says it all in its title, “As basketball goes global, PBA sets clock back a hundred years.” Of course, the PBA has legal ground as it has contract stipulations that apparently prevent the move. But as Sayson argues, the PBA needs to be open-minded to provide “a free-flowing bridge that allows our homegrown talents to spread their wings overseas.”

Consider the case of chess wiz Wesley So. A full-blooded Filipino, Wesley was the youngest Filipino International Master at age 12 and his world ranking skyrocketed to number 2 in 2017. Yet sometime in 2014, So joined the United States chess federation after becoming disenchanted with local sports politics. Apparently, he was denied a P1 million incentive from winning the gold medal in the World Universiade Games. Today, he competes for the USA and no longer for our country.

It is sad that the prevailing trend in many economies these days is to be protectionist, a move borne out of a defensive, politically motivated policy meant to shield domestic businesses. In the long run, such acts are ultimately harmful to consumers as protectionism weakens domestic industries. Competition is the ultimate vehicle that fosters creativity, innovation and improvement. And, as in sports, to really do well, we must check the quality and standards at the international scene. That’s what Saso has done, what Kiefer hopes to achieve, and what So has demonstrated. Our thinking should go beyond the limits of our geo-physical boundary.

Dr. Gary Ranker defined a global mindset as the ability to step outside one’s base culture and to understand there is no universally correct way to do things. The definition calls for a willingness to take risks, to explore, to learn and to adapt. This means having an inclusive and learning mindset and going out of your comfort zone to proactively explore opportunities. It presumes learning and understanding common patterns across cultures, countries and markets. Decisions will then be culturally sensitive and will take advantage of opportunities the differences bring. The global mindset is situational and diverse. It makes no presumptive judgment that differences and similarities are neither positive nor negative.

Given the pandemic, it is understandable that countries look inward to save themselves first before opening to the world. Unfortunately, this type of thinking has also led to irrational behavior like the hoarding of the vaccines by developed countries and an exclusion mentality. Yes, there is a need to be open, to step outside one’s base and to remember that ultimately, we are all interconnected.

In many economies, the “buy local” campaign has become a major initiative. In one such blurb, subscribers are exhorted to “keep your money where your heart lives, support an economy of friends and neighbors, and build a community that thrives by thinking local first.” It makes good sense for products and services that are best sourced locally for so many reasons — reducing environmental impacts, creating local jobs, building unilateral resilience. Such initiatives deserve support but only up to what can be sourced locally. To extend it further is irrational. The local economy must specialize on what they do best and surely it is not designed to produce everything its people need and want. Go local but think globally.

Philippine Independence Day is just around the corner. We have to let the nationalistic fervor burn. But we have to realize we cannot be myopic and we should allow opportunities for the country and our people to shine in the international arena when we can. We should defend what we have while we keep an open view on what we can achieve or do elsewhere. The best in the world should be our standard if we want to break out of our laggard position in this part of the globe. We cannot have a parochial mentality. What works at the city level need not work at the country level. What works at the country level must be benchmarked against the best in the world. We need to embrace a global mindset.

 

Benel Dela Paz Lagua was previously Executive Vice-President and Chief Development Officer at the Development Bank of the Philippines.  He is an active FINEX member and an advocate of risk-based lending for SMEs.  The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.

How HR must monitor all employee issues

I’m the operations manager of a medium-sized factory. In recent months, I’ve noticed an increasing number of issues raised by workers against line leaders and supervisors. I’m afraid that those issues could ripen into major ones, if not galvanize the workers to agitate against management. Our human resource (HR) manager appears not to be bothered by this and considers it part of a “healthy proactive communication process” which he initiated six months ago. What do you think? — Yellow Bell.

There’s one game that I love to share with participants attending my management seminars. The participants are grouped into three to five teams with a minimum of three members each. The teams are given plastic drinking straws and masking tape. The challenge is to build the tallest and sturdiest structure representing a condominium building in 15 minutes.

They are free to do whatever is necessary to accomplish the goal. No further rules are imposed except for the time constraint. Some teams just go to work without planning. Others appoint a leader, while other groups allow a volunteer to take the lead in the construction process. Some spend a lot of time choosing their leader, others take so much time to plan that they have little time to do the actual construction work.

The game offers fascinating lessons for everyone. Many efforts fail due to bickering, superiority complexes, a lack of teamwork, personality conflicts. Some relish a project with so few rules. Some of these elements could be present in the rash of complaints you have been experiencing.

MONITORING SYSTEM
If any one thing can generate employee enthusiasm and foster loyalty, I would say it is a healthy, proactive, two-way communication process.

If the workers don’t trust management, they will not bring up these issues. Such a program cannot be rolled out overnight. Even six months or one year might not be enough. It requires a long-term commitment by management, along with a considerable investment of time, effort, and energy.

The HR department must take an active role, not only in encouraging people to voice out their ideas, suggestions, even complaints. For HR to become a key player in this “healthy proactive communication process,” it must create and sustain a formal monitoring system that tracks how employee issues are resolved.

In doing so, HR must establish the following rules:

One, all issues must be tackled first by line leaders. They are the company’s first line of defense. Therefore, all leaders, supervisors, and managers must undergo formal training on how to handle such issues. The training may include how to conduct meaningful and productive dialogue.

Two, line leaders must send a formal report to HR. This means sending an e-mail to the HR manager, with the operations manager copied in. The report should contain a full discussion of the issue, detailing the five Ws (who, what, where, when, and why). The “how” may be included as well. It’s better if HR comes out with a standard form for uniformity and classification of issues.

Three, all issues must be resolved promptly. A quick resolution prevents escalation to the next level. To make it easy for everyone, HR may single out those issues that should be resolved within a certain timeline. For example, minor issues must be resolved within one calendar week, while major ones are to be dealt with within 30 calendar days.

Four, unresolved cases are elevated to the next level. Even though the participation of line leaders is important, disgruntled workers may still seek to appeal to higher-ups. If this happens, the next level must think hard about overturning any decision reached by the supervisors. 

Last, HR must compile best practices. The focus is to determine the key ingredients behind the quick resolution of employee cases. These must serve as live examples in the training program to be given to line leaders and supervisors. The model supervisors with high success rates in resolving issues must also be commended.

MANAGEMENT COMPETENCE
Over a reasonable period, the task should be easy for line leaders, supervisors, and other managers if they start and maintain regular one-on-one discussions with their workers. It is time-consuming but worth the effort to build the needed trust and confidence that only personal contact can bring about.

The key is to show these line executives how to be competent and decisive in doing their jobs. This is very important. When workers feel they’re dealing with nincompoops, they tend to spread the word and silently question their capacity to communicate and operate effectively.

“Supervisor X can’t make an instant decision, even on the easy cases.” This sums up how negative such perceptions can be. Whether true or not, it can weigh heavily on the success or failure of one’s career in management. To further complicate things, it is usually the boss of these “incompetents” who holds the key. At times, they rein in their line leaders so much that they can’t make independent decisions.

The remedy, of course is to empower line leaders to a certain extent. Regard them as management’s strongest ally in good governance.

 

Have a consulting chat with Rey Elbo on Facebook, LinkedIn, or Twitter or you can send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

SEC backs easing of bank secrecy law

REUTERS

THE Securities and Exchange Commission (SEC) is backing the amendment of the Republic Act No. 1405 or the Secrecy of Bank Deposits Law to further strengthen its efforts against dirty money, tax evasion, and other financial crimes.

“Such provisions will lift a long-standing barrier to effective investigation and prosecution of financial crimes,” the corporate watchdog said.

The amendments under House Bill No. 8991 will empower the SEC, the Bangko Sentral ng Pilipinas, the Philippine Deposit Insurance Corp., the Anti-Money Laundering Council, the Department of Justice, and other courts to look into the deposits of supervised institutions or persons should there be reasonable grounds to do so.

The commission said the law has hampered investigations of the SEC.

“The Secrecy of Bank Deposits Law has limited the effectiveness of the SEC, for instance, to establish the owners of bank accounts used in cases of violations of the Republic Act No. 8799 or the Securities Regulation Code, Republic Act No. 11232 or the Revised Corporation Code of the Philippines, and other laws implemented by the commission,” the SEC said.

It has also prevented the commission from validating declared financial positions of companies “where there are ground to believe that there is an effort to conceal misconduct, corporate fraud or noncompliance with certain requirements.”

The SEC added that the amendments would lead to lower costs in cross-border transactions, as well as eased restrictions in investment and foreign currency inflows.

“[It would] keep the Philippines off the FATF (Financial Action Task Force) ‘grey list’ of jurisdictions under increased monitoring for high risks of money laundering and terrorist financing,” the commission said.

PROGRAM AGAINST DIRTY MONEY
Meanwhile, the SEC is requiring newly covered financing companies, lending institutions, and those applying for a certificate of authority to operate as financers and lenders to create a “comprehensive and risk-based Money Laundering and Terrorist Financing Prevention Program” (MTPP).

In a notice published on its website, the commission said details of their programs should be submitted by June 21.

“Those who have not yet submitted their MTPPs, you are given until June 21, 2021 to submit your MTPP to the Anti-Money Laundering Division of the Enforcement and Investor Protection Department (AMLD-EIPD) of the commission,” the SEC said, adding that those who fail to comply will be subjected to penalties.

Covered firms are asked to submit their programs to eipd-amld@sec.gov.ph using their official e-mail addresses, along with a copy of a board resolution or certification by their country/regional/area head or equivalent stating that they have approved of the MTPP.

The SEC’s AMLD-EIPD will send a confirmation once they have received a copy of the program. A physical copy of the MTPP and the required attachment is no longer needed.

Meanwhile, for those still applying for a certificate of authority to operate a financing company or lending company will need to present a sworn certification. It will be part of their documentary requirements for licensing.

Once their application for registration or licensing is greenlit, they will be required to submit a soft copy of their MTPP within 10 days after receiving a registration certification or a secondary license from the commission. — Keren Concepcion G. Valmonte

Profile of Power Plants in the Luzon Grid (As of Dec. 31, 2020)

Profile of Power Plants in the Luzon Grid (As of Dec. 31, 2020)

How PSEi member stocks performed — June 10, 2021

Here’s a quick glance at how PSEi stocks fared on Thursday, June 10, 2021.


Peso weakens vs dollar ahead of US inflation

BW FILE PHOTO

THE PESO weakened versus the greenback for a third straight day on Thursday on safe haven demand as the market awaits the release of US inflation data, which could dictate the pace of the Federal Reserve’s tapering.

The local unit closed at P47.765 per dollar on Thursday, shedding 3.4 centavos from its P47.731 finish the day prior, data from the Bankers Association of the Philippines’ website showed.

The peso opened Thursday’s session at P47.72 versus the dollar. Its weakest showing was at P47.777 while its peak for the session was at P47.68 against the greenback.

Dollars traded inched up to $680.2 million on Thursday from the $675 million seen on Wednesday.

The peso retreated versus the greenback ahead of the release of latest US inflation data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said on Thursday.

Meanwhile, a trader attributed the peso’s weakness to risk-off sentiment due to the risk of taper tantrum as the Fed looks to wind down its asset purchases.

The US Labor department was due to report May inflation data overnight. In April, US inflation stood at 0.8%, which was its quickest pace since June 2009.

Economists said the data will likely show the consumer price index (CPI) increased 0.4% last month after surging 0.8% in April, which was the largest gain since June 2009, Reuters reported.

In the 12 months through May, the CPI is forecast accelerating 4.7%. That would be the biggest year-on-year increase since September 2008 and follow a 4.2% rise in April. The anticipated jump will partly reflect the dropping of last spring’s weak readings from the calculation. These so-called base effects are expected to level off in June.

Inflation could also get a boost from employers raising wages as they compete for scarce workers, despite employment being still 7.6 million jobs below its peak in February 2020. There are a record 9.3 million unfilled jobs.

Federal Reserve Chair Jerome Powell has repeatedly stated that higher inflation will be transitory. The US central bank slashed its benchmark overnight interest rate to near zero last year and is pumping money into the economy through monthly bond purchases.

The Fed has signaled it could tolerate higher inflation for some time to offset years in which inflation was lodged below its 2% target, a flexible average. Its preferred inflation measure, the personal consumption expenditures price index, excluding the volatile food and energy components, increased 3.1% in April, the biggest rise since July 1992.

For Thursday, Mr. Ricafort gave a forecast range of P47.70 to P47.80 per dollar, while the trader expects the local unit to move within the P47.65 to P47.80 band. — with Reuters

PSEi drops on profit taking after market’s rally

PHILIPPINE shares declined on Thursday as the market corrected and as investors pocketed their profits following a two-day rally.

The bellwether Philippine Stock Exchange index (PSEi) went down by 26.83 points or 0.38% to close at 6,875.71 on Thursday, while the broader all shares index shed 5.85 points or 0.14% to finish at 4,154.36.

“Market went on profit taking today after it moved substantially up in the last two days of trading,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Thursday. “This is considered a healthy correction.”

“The market was unable to sustain its position at the 6,900 level, showing this to be a strong resistance so far,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

Meanwhile, AAA Southeast Equities, Inc. Research Head Christopher John Mangun said profit taking was expected as the week is about to end.

“The general sentiment continues to turn more optimistic as new COVID-19 (coronavirus disease 2019) cases begin to decline again after we saw higher cases in the last two weeks,” Mr. Mangun said in an e-mail. “The continuous progress in the rollout of vaccines also added to the optimism.”

The Health department reported 7,485 new infections on Thursday, bringing the country’s case tally to 1,293,687. Active cases stand at 56,921.

The country on Thursday received one million doses of the CoronaVac vaccine, which was made by China-based Sinovac Biotech Ltd. It was also expecting around 2.2 million doses of the Pfizer, Inc. and BioNTech SA vaccine.

Majority of sectoral indices closed in the red except for services, which rose by 6.54 points or 0.42% to 1,540.17; and industrials, which gained 10.02 points or 0.1% to end at 9,251.30.

Meanwhile, mining and oil shaved off 82.62 points or 0.86% to end at 9,471.34; property lost 29.33 points or 0.85% to 3,418.77; financials went down by 9.56 points or 0.65% to close at 1,456.43; and holding firms declined by 27.05 points or 0.38% to 6,917.86.

Value turnover went down to P7.40 billion with 3.06 billion issues traded on Thursday, from the P7.58 billion with 2.02 billion shares that changed hands the previous day.

Decliners outnumbered advancers, 118 versus 97, while 47 names closed unchanged.

Foreigners turned sellers anew on Thursday, logging P2.67 million in net outflows versus the P1.09 billion in net purchases seen on Wednesday.

Diversified Securities’ Mr. Pangan said he expects profit taking to continue on Friday and placed the PSEi’s support at 6,840.

Meanwhile, AAA Southeast Equities’ Mr. Mangun said the 30-member index may still close the week with some gains.

“There is stronger conviction now that the economy is on a better path to recovery than six months ago as we are seeing gains in almost all industries,” he said. — K.C.G. Valmonte

WB worried LGUs unable to spend Mandanas funds

THE World Bank (WB) has expressed concerns about the capacity of local government units (LGUs) to spend their expanded budgets following the implementation of a Supreme Court (SC) ruling that expanded their share of the National Government’s revenue.

World Bank Economist Kevin Cruz said funds left unspent by LGUs could increase by up to P155 billion next year, equivalent to 0.7% of gross domestic product, if their project implementation capabilities are not upgraded.

“Our analysis shows that the significant expansion of LGU budgets in 2022 may result in greater underspending, unless the ability of LGUs to effectively spend the additional resources improves,” Mr. Cruz said in an online forum Thursday.

“In the midst of the country’s worst social, economic and health crisis, unspent budgets are wasted opportunities to bring crucial services to communities that need it most,” he added.

The SC’s Mandanas ruling is so called because of Batangas Governor and former Representative Hermilando I. Mandanas’s successful challenge of the government’s previous position that LGUs were entitled to a smaller share of National Government funds. The government responded to the ruling by devolving more functions to LGUs starting next year, to compensate for the lost revenue, which will now go towards the LGUs’ internal revenue allotments (IRA).

IRAs could grow 55% to 1.08 trillion in 2022, according to World Bank estimates.

Mr. Cruz said LGUs with bigger budgets may also struggle to implement the expanded projects they will be inheriting, citing their history of low budget execution rates.

“All LGUs faced difficulty in implementing capital outlay or investment projects. In particular, nearly half of the annual budget for investment projects is not spent. As a result, LGUs that allocate a greater share of their budgets for investment projects typically have a larger amount of underspent budgets,” he added.

Increasing the budget for capital outlays by 15 percentage points (ppts) will result in a decline in LGU budget execution of 15 ppts for provinces and cities and 24 ppts for municipalities, he said.

Mr. Cruz said poor budget usage may be due to limited implementation capacity, weak planning, underdeveloped competencies in public financial management, shortage of human resources and process bottlenecks in processes, such as in procurement.

Meanwhile, inequality of fiscal allocations among LGUs will likely persist despite the increased budgets, he said, because the Mandanas ruling does not address the distribution formula between rich and poor LGUs.

He said the proposed Growth Equity Fund, which pools resources to provide financial aid to poorer and disadvantaged LGUs, can help address inequality.

“The National Government should pursue the equalization fund until this handicapped municipalities flourish in terms of development. But there is a caveat here: there should be mechanism to monitor programs in real time to actualize accountability,” said Cynthia Falcotelo Fortes, secretary general at League of Municipalities of the Philippines and also the mayor of Barcelona, Sorsogon, speaking at the same forum.

To ensure a smooth transition next year, the World Bank’s Mr. Cruz said LGUs should focus on funding programs and projects that are ready for implementation.

It is also crucial that the National Government and LGUs define roles and communicate clearly on the devolution.

“In the long term, the government may consider amendments to the Local Government Code. This includes strengthening the ability of LGUs to generate revenue and clarifying the assignment of service delivery responsibilities among the different levels of government to avoid overlaps,” he added.

The Department of the Interior and Local Government’s director for local government development, Anna Liza F. Bonagua, said the department expects LGUs to be more “progressive, self-reliant, transparent, (and) accountable” next year while delivering programs effectively.

Ms. Bonagua said the guidance and continued support of the National Government to LGUs will also play a key role in the effective implementation of the Mandanas ruling. — Beatrice M. Laforga

DTI seeking more funds for small business loans

THE TRADE department is seeking additional funding for small business loans, saying that it expects to commit P5 billion to finance such companies by the end of June.

The program for businesses affected by the economic downturn caused by the coronavirus disease 2019 (COVID-19) has tallied P4.5 billion worth of loans for 30,408 applicants, the Department of Trade and Industry (DTI) said in a statement Thursday.

“In view of this, there is a need to replenish this fund if we are to lend out to more MSMEs (micro-, small-, and medium-sized enterprises) affected by the pandemic,” Trade Secretary Ramon M. Lopez said.

The COVID-19 Assistance to Restart Enterprises (CARES) program of the Small Business Corp. draws P1 billion from the 2021 General Appropriations Act and P4 billion from Bayanihan II, or the Bayanihan to Recover as One Act.

Expecting these funds to be fully committed by the end of this month, Mr. Lopez said it “will be requiring replenishment as the country continues to rebuild economically from the ongoing worldwide pandemic.”

He said small businesses should continue to apply for such loans.

“With this microfinancing program providing collateral-free and interest-free loans to businesses affected by the pandemic, our MSMEs can begin to rebuild their respective businesses and take part in the recovery that has started around the world,” he said. 

Another P6 billion in loans reserved for tourism businesses are still being issued. The DTI is working with the Tourism department to promote the program.

“The two agencies expect an acceleration in the utilization of CARES for travel as more tourism economic activities are starting to reopen with the easing of community quarantine restrictions,” the DTI said.

Tourism businesses have been reluctant to apply for the loans, the Tourism Congress of the Philippines said in January. The DTI earlier this year said fewer small businesses had been applying for the loan program due to low business confidence. — Jenina P. Ibañez