A business group is pressing for more lending facilities for micro, small and medium enterprises (MSMEs) to aid their recovery efforts as intermittent lockdown measures to stem the spread of Covid-19 dented operations and profits of these pillars of the economy.
Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon was quoted in the group’s statement as saying that making loans available to MSMEs “can go a long way” to fund these businesses’ digital adoption.
The need for digitalization of business operations has been emphasized in recent years due to mobility restrictions, which also changed consumer behavior. Adapting to such transformation through use of digital platforms has boosted industry players’ business continuity plans.
“We see the inequality after the Covid-19: the smaller guys are even more marginalized. We can see that many of them are brick-and-mortar businesses and they have to learn to shift quickly to the e-platform [while] they suffer from different constraints in the supply chain,” Barcelon said. “And most of all, what they need is really financial assistance.”
According to the PCCI official, extending additional financing to the MSMEs is deemed necessary as they were the “most affected by the Covid-19” pandemic. The sector accounts for 99.6 percent of the establishments and 60 percent of the total employment in the country.
Barcelon acknowledged the zero-interest lending facility provided by Small Business Corp. (SB Corp.), one of many offered by government.
But he said it was still “never enough because the severity of the lockdown is just too much, especially [for] the micro [businesses] to last.”
The PCCI official was referring to the Bayanihan Covid-19 Assistance to Restart Enterprises, or “Cares,” program, which was able to provide P6.8 billion loans to 40,000 MSMEs in two years.
The SB Corp., however, announced last month that funding for the program has been fully utilized.
Trade Secretary Ramon M. Lopez told the BusinessMirror the resumption of the Cares program is relative to the infusion of fresh funds.
That will depend “on new allocation, if ever, in the next Congress,” Lopez told the BusinessMirror.
Still, SB Corp. clarified last month it will still process applications for other lending programs catering to tourism-related establishments, displaced overseas Filipino workers (OFWs) and retail stores, mini-groceries and small dealers in the consumer-goods supply chain.
Other government initiatives like the Small Business Wage Subsidy program and Covid-19 Adjustment Measures program also cater to both formal and informal sectors, Barcelon noted.
“Despite these programs, we still need to do a lot more for the long term and stimulus packages to help the micro and small establishments,” he said.