FUNDS for the tourism sector under the Bayanihan 2 will remain available despite the law’s expiry on June 30.
In a Viber message to the BusinessMirror, Trade Secretary Ramon M. Lopez said the P6-billion fund allocated under Bayanihan 2 for lending to the micro, small and medium enterprises (MSMEs) in tourism “will not revert [to the National Treasury]. It was put in the Small Business Corporation [SB Corp.] as equity.”
Tourism Secretary Bernadette Romulo Puyat added, the capital infusion of SB Corp. was “already long overdue so DBM [Department of Budget and Management] used Bayanihan 2 as the opportunity to do so. So the funds for lending to tourism MSMEs won’t expire.”
SB Corp. is a lending institution under the Department of Trade and Industry specifically targeting MSMEs. As of June 25, it has approved 433 loan applications corresponding to P185.6 million in loans to tourism enterprises, under its CARES for Travel program. Of the total approved loans, some P141.98 million has so far been released to 357 tourism MSMEs.
The approved loans under CARES for Travel are just 3 percent of the total available funds for tourism MSMEs.
‘Times are hard’
The poor availment of the lending window worried Romulo Puyat, such that she endorsed to Lopez/SB Corp the requests of tourism groups for easier terms on said loans.
“We gave all their requests to SB Corp. and they agreed. For one, the grace period now on the loans has been extended to two years,” from the previous term of six months to a year.
Also, tourism MSMEs with existing loans under the CARES for Travel program may apply for additional loans provided they don’t exceed the maximum loan amounts in their respective categories, and their financial statements filed with the Bureau of Internal Revenue supports a higher loan amount. (See, “SBCorp relaxes terms on tourism loans due to poor availment,” in the BusinessMirror, June 11, 2021.)
But the DOT chief acknowledges that many tourism companies are also hesitant to borrow “because times are hard.”
According to the first quarter Business Expectations Survey of the Bangko Sentral ng Pilipinas (BSP), companies continue to be wary of their financial conditions in the first quarter, as “the financial conditions index improved albeit remaining in the negative territory at -32.9 percent for Q1 2021 from -43.4 percent in the previous quarter.”
The companies also felt constrained in their access to credit, “as the credit access index remained negative at -7.5 percent for Q1 2021, although improving from -12.2 percent in Q4 2020. The negative index means that respondents who reported difficulties in accessing credit continued to outnumber those that said otherwise.”
Likewise, the BSP’s Senior Bank Loan Officers’ Survey in the fourth quarter of 2020 “reflected a slight improvement compared to the Q3 2020 survey where almost half of the respondent banks stated that they tightened credit standards amid the continued economic and business disruptions caused by the ongoing Covid-19 pandemic.