AVAILMENTS from the government lending facility for the tourism sector continue to remain meager even though 70 percent of the sector are “in distress.”
Data from the Department of Tourism (DOT) showed that as of November 5, 2021, there were 528 loan applications amounting to P242.83 million that has been approved by the state-owned Small Business Corp. (SBCorp) under its CARES for Travel program. Of this amount, some P223.45 million have already been released to 473 accredited tourism enterprises.
The loan approvals, however, account for just 3.72 percent of the P6 billion in funds allocated for the lending window created under Bayanihan 2. The allocation had been vigorously fought for by the DOT and the stakeholders.
During the weekly Kapihan sa Manila Bay, Tourism Secretary Bernadette Romulo Puyat noted, “Unlike the agricultural sector where I used to work, the tourism sector isn’t used to lending windows,” as a way of explaining the poor availment rate.
This was seconded by Tourism Congress of the Philippines President Jose C. Clemente III in the same event, “We’re not used to borrowing,” but added he has been encouraging more stakeholders to tap the SB Corp. funds, “because that’s still bridge-financing.”
He said, “70 percent of tour operators and travel agencies can be considered in distress. Many of my friends have closed [their companies] and moved into other businesses like food because of this pandemic and [for about two years], we’ve basically had zero income. A few have reopened because of domestic tourism, but that’s still not enough.”
Asia ‘most conservative’ in reopening
HE pointed out, “They are afraid to borrow because they don’t know when the pandemic will end. But SBCorp has been very, very flexible in its lending terms, and they said, they’re open to extending the repayment on the loan in case the borrower is unable to repay on time.” He added that the lending firm, which is under the Department of Trade and Industry, has also simplified the application process by requiring fewer documents.
Accredited tourism micro, small, and medium enterprises may avail of collateral-free, zero-percent interest loans under the CARES for Travel, with maximum loanable amounts from P600,000 (micro-enterprises with asset size up to P3 million); to P3 million (small enterprises with assets not more than P15 million); and P5 million (medium firms with assets over P15 million, but not more than P100 million).
To boost loan availment, Clemente said he will be asking SBCorp to raise the loanable amounts, a proposal, Romulo Puyat said, the DOT will be endorsing. “Everything that the private sector wants, we support.”
Meanwhile, Aileen Clemente, president of Rajah Travel Corp., said in the same Kapihan that the Philippines’ hosting of the World Travel and Tourism Council (WTTC) Summit in March 2022, “will hopefully jumpstart the reopening of the tourism industry,” noting that “Asia is the most conservative in reopening.”
Describing it as the private sector counterpart of the United Nations World Tourism Organizations, the WTTC, she said, is the private-sector led organization gathering CEOs “of popular brands we know like Hilton, Carnival [Cruises], and airlines like Emirates, etc.” About 600 delegates are expected to participate in the March summit, which is being spearheaded by the Tourism Promotions Board, the marketing arm of the DOT. Clemente, a WTTC member, co-chairs the Philippine National Organizing Committee for the WTTC Summit.