THE Small Business Corp. (SBCorp) has confirmed the “sluggish” uptake of supposedly easy loans by Covid-hit travel and tourism-related micro, small and medium enterprises at the height of the pandemic, with these companies availing just P329-million worth of financing assistance or only 8.22 percent of the P4 billion set aside for MSMEs under the rescue package of the Bayanihan to Recover as One Act (Bayanihan 2), a senior lawmaker said on Wednesday.
Camarines Sur Rep. LRay F. Villafuerte, author of Bayanihan 2, said this revelation has “confirmed the view by certain legislators like him in the previous Congress that the last-minute diversion to this bailout package of the amount originally intended under the House-approved Bayanihan 2 to build job-intensive tourism infrastructure nationwide had undermined government efforts to create jobs in, and quicken the recovery of, our once booming tourism sector.”
Villafuerte, former Deputy Speaker for Finance, said he and his House peers felt at that time that a P10-billion tourism infrastructure spending by the Tourism Infrastructure and Enterprise Zone Authority (Tieza) would create the needed jobs for dislocated workers in this sector during the pandemic while at the same time improving facilities leading to tourist sites while the nation was still on lockdown.
“But this infra spending plan for Tieza was subsequently hijacked as the House-approved tourism infra budget proposal of P10 billion was realigned during the bicam [bicameral conference committee negotiations on the then-Bayanihan 2 bill], all because of the vigorous lobbying among senators for the fund diversion by DOT [officials] in tandem with big-time [tourism] industry players,” Villafuerte, now the president of the National Unity Party (NUP), was quoted in a statement as saying.
Remains sluggish
IN a December news release, the SBCorp disclosed that of the P7.93 billion released by the Department of Budget and Management (DBM) for zero-interest, no-collateral loans for all MSMEs devastated by the Covid-driven global health and economic crises, P4 billion was allotted for travel and tourism-related loans under the “Cares for Travel” (Covid-19 Assistance to Restart Enterprises-Tourism Rehabilitation and Vitalization of Enterprises and Livelihood) component of Bayanihan 2’s rescue package for MSMEs in the trading, manufacturing, services, agriculture, tourism and other business sectors.
“Unfortunately, uptake of tourism loans was and remains sluggish. As of December 2022, only the amount allotted for tourism MSMEs remains from the original DBM disbursement,” the SBCorp said in the news release. The government financial institution added that as of November 30, 2022, it has only released P329-million worth of loans to 735 tourism enterprises.
And because of this low loan uptake, SBCorp said it plans to make this unused portion originally meant for tourism-related enterprises available to MSMEs in other sectors beginning this January.
“SBCorp looks forward to disbursing funds previously set aside for tourism MSMEs to multisectoral MSMES starting January 2023,” the state-run firm under the Department of Trade and Industry said. “It is worth noting that tourism MSMEs and other tourism-related establishments may still avail of loans under the terms for multi-sectoral MSMEs beginning January 2023.”
Policy blooper
VILLAFUERTE bemoaned that only P3.1 billion or less than a third of the P10-billion outlay realigned during the bicam talks from the infrastructure budget of Tieza to the MSME loan package of SBCorp had been utilized by the time the Bayanihan 2 law expired in June 30 last year.
Of this already limited amount, the congressman said that the SBCorp had released just over P300 million combined to about 700 borrowers under the “Cares for Travel” component of this bailout package for the tourism industry, or a paltry 3.35 percent of the P10-billion outlay under Bayanihan 2 that lawmakers led by Villafuerte originally proposed in 2020 for tourism infrastructure.
He said SBCorp’s revelation “bolstered up our point back then that the last-minute diversion at the bicam negotiations on Bayanihan 2 of TIEZA’s infrastructure budget to a bailout package for MSMEs of SBCorp—as lobbied by the DOT along with big-time industry players—was a policy blooper as most of the distressed enterprises were not expected to apply for loans when the country was still in lockdown and nobody neither knew when Covid-19 would vanish, when foreigners or locals would again be allowed to travel and visit tourist spots, nor how cash-strapped enterprises would manage to pay back their SBP loans with their businesses down.”
Under the Bayanihan “Cares” component, Covid-hit MSMEs could apply for loans from P10,000 to P5 million each at zero interest and no collateral requirement.
Tucked in
Villafuerte explained that the House of Representatives had originally proposed in their version of the budget for Bayanihan 2 that P10 billion of the entire stimulus package be set aside for Tieza to build job-intensive tourism infrastructure as a way to create a lot of instant jobs, especially for this sector’s workers who were dislocated by the Covid-related temporary closure nationwide of tourist spots, resorts and other establishments in this industry.
“But this proposed TIEZA budget was later junked and the P10 billion was realigned instead to SBCorp, thanks to the intense lobbying by DOT officials in tandem with the industry’s big guns including those belonging to the TCP (Tourism Congress of the Philippines) headed by Jose [C.] Clemente III during the bicam talks on the final version of Bayanihan 2,” he added.
Bayanihan 2 had extended financial support to sectors devastated by the prolonged economic slump caused by the strict community lockdowns that the then-Duterte administration had imposed nationwide to slow the spread of the killer virus.
Villafuerte said that “the P10-billion infra budget of Tieza was tucked in the House-passed Bayanihan 2 on our belief that more and better tourism infrastructure projects needed to be built in 2021 and onwards for the government to rev up this Covid-battered sector anew as a boom industry and major dollar-earner once the pandemic is over.”