THE struggling tourism sector will be able to tap concessional loan terms under the Small Business Corp. (SBCorp).
This was the assurance of Trade and Industry Secretary Ramon Lopez when asked about the P10-billion funding the government financial institution will be receiving under the recently ratified Bayanihan 2 bill. In a text message to the BusinessMirror, Lopez said, “The CARES program already gives [zero] interest rate, [and] 6 percent service fee with 6-month grace period. So the 12-month loan becomes 18 months. So effective [interest] rate is 4 percent.”
According to its web site, SBCorp’s P3-billion CARES program is a credit facility that specifically targets micro enterprises with an asset size not more than P3 million, and small enterprises with an asset size not more than P15 million. Micro enterprises may borrow anywhere from P10,000 to P200,000, while small enterprises may borrow up to P500,000. While the loan carries a zero interest rate, SBCorp deducts a front-end service fee of 6 percent for loans 18 months or less, and 8 percent if the loan exceeds 18 months.
Lopez also said the intent of the crafters of the law will be respected by SBCorp., which is under the Department of Trade and Industry, in that P6 billion of the P10 billion funding for it will go specifically to the tourism sector. “SBCorp will simply follow what is provided in the law, and the spirit behind those provisions,” he said.
In the bicameral conference committee report dated August 20, 2020, the final version of Bayanihan 2 provides: “P10 billion as additional funding for the CARES program of the SBCorp and for its other lending programs, as well as interest rate subsidy, to be extended to MSMEs (micro- small- and medium enterprises), cooperatives, hospitals, tourism industry, and OFWs (overseas Filipino workers) affected by the Covid-19 pandemic and by other socio-economic reversals.”
Bayanihan 2 also allocates “P3 billion for the implementation of cash-for-work programs under DOLE and for the unemployment and involuntary assistance for displaced workers or employees,” specifically for the tourism industry.
Tourism stakeholders hailed the passage of the Bayanihan 2 Bill, rejoicing especially over the P10-billion allocation to the sector in the form of financial assistance. Aside from P6-billion from SBCorp and P3 billion from DOLE, the bill also allocates “P1 billion for the Tourism Road Infrastructure Programs of DPWH (Department of Public Works and Highways).” The Department of Tourism (DOT) and DPWH have an ongoing convergence program which identifies vital roads that need to be constructed in key tourism destinations.
In its version, the House of Representatives insisted the P10 billion would go to tourism infrastructure under the Tourism Infrastructure and Enterprise Zone Authority, a DOT-attached agency.
Data from the Philippine Statistics Authority show there are 144,640 companies in accommodation and food service activities in 2018, of which 144,535 are MSMEs. Total MSMEs in the country are 998,342, of the 1 million establishments on PSA’s database. MSMEs are companies with employment between 1 and 199 staff. (See, “Data speaks: Nearly all tourism outfits are small, medium, micro enterprises,” in the BusinessMirror, Aug. 20, 2020.)