Senator Risa Hontiveros said on Tuesday the government should provide soft loans to struggling micro, small, and medium businesses to enable them to recover or tide them over the unprecedented COVID-19 crisis.
(Senate of the Philippines / FILE PHOTO / MANILA BULLETIN)
Hontiveros said she hopes that members of Congress will incorporate this in the final version of the proposed Bayanihan to Recover As One Act or Bayanihan 2 as this will encourage them to open up their businesses and at the same time revive the country’s economy.
Providing soft loans will not only assist firms to settle recurring operating expenses such as interest payments, utilities, rents and leases but also help them continuously pay for their workers’ wages.
“Micro and small businesses that provide livelihood are losing money. Some have closed shop already. Their workers and employees are being laid off,” Hontiveros said.
“Wala na rin silang kumpyansang mangutang dahil walang kasiguraduhan kung makakabayad. Kailangan nila ng ayuda at suporta, (They’re afraid to apply for a loan because they are not sure if they can pay. They need cash assistance and support),” she added.
The senator hopes that this amendment will be incorporated in the final version of the Bayanihan 2.
Hontiveros said the government giving MSMEs “pay-when-able” options will encourage them to avail of loans as if they are borrowing money from a “close relative.”
To aid in the financial rehabilitation and recovery of MSMEs, government-owned banks such as the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LandBank) should provide soft loans to commercial loans to help bring back confidence to both commercial banks and small business owners to enter into a loan agreement.
“Despite partial credit guarantees, private banks are still tentative about lending due to economic uncertainties. At kung ikaw ay small business owner, bakit ka pa magdadagdag ng utang lalo’t sarado naman ang iyong negosyo at walang kitang pumapasok? (why will you apply for a loan when your business is closed and not earning?)” she said.
Hontiveros warned that the failure to help MSMEs create jobs and save them from economic disruption will push more people to poverty.
“Huwag nating hayaang tuluyang sumadsad ang mga negosyong bumubuhay sa ating ekonomiya at mga kababayan, (Let’s not allow these businesses that help our people to find jobs and revive our economy to hit the bottom),” she said.