THE country’s largest business group on Monday appealed to banks to extend for at least one year the deadline payment for loans availed of by firms to help them survive the economic impact of the coronavirus pandemic.
The Philippine Chamber of Commerce and Industry (PCCI) asked banks and nonbank financial institutions (NBFIs) for a one-year extension of loan maturities that are due between March 16 and December 31. PCCI President Benedicto V. Yujuico argued that this will help firms survive the lockdown that kept operations suspended for roughly two months now.
For instance, members of the PCCI reported they are suffering from deteriorating cash positions and diminishing ability to avoid massive layoffs on the prolonged implementation of the enhanced community quarantine (ECQ) in Luzon.
“The ECQ has brought substantially all businesses to a sudden and unexpected stop,” Yujuico added in a statement. “Many are now facing economic distress, forcing them to resort to drastic cost-cutting, layoffs and pay cuts.”
“Even as the government slowly relaxes the quarantine measures, we expect that the effects of the crisis will continue to be felt and that businesses will continue to struggle through the end of 2020,” he said.
As such, PCCI is asking banks and NBFIs to extend the payment deadline for loans availed of by micro, small and medium enterprises, as well as those by corporations. This is to allow them to preserve their liquidity and be able to pay for operating expenses.
Yujuico explained that creditor willingness to restructure loans maturing this year will go a long way toward firms preserving their labor force and averting permanent closure; otherwise, “many businesses will likely be forced to shut down.”
The PCCI listed the transportation; automotive; arts and entertainment; hospitality; real estate; mining; manufacturing; construction; financial and insurance; professional and scientific; and the administrative and support service industries as most affected by the ECQ. Their operations are severed by lockdown regulations on public transport and mass gatherings, Yujuico said.
“The PCCI expressed hope that its proposal will be considered to mitigate the potentially fatal effects that Covid-19 is having on many business enterprises,” the PCCI chief said.
Image credits: Nonie Reyes
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