The loan program for the distressed tourism businesses under the Small Business Corporation (SB Corp) of the Department of Trade and Industry (DTI) will be interest-free with zero collateral, according to Tourism Secretary Bernadette Romulo-Puyat.
This was among the loan program guidelines disclosed by the tourism chief during the House budget hearing for the Department of Tourism (DOT) for the fiscal year 2021 on Thursday.
Under the Bayanihan to Recover As One Act (Bayanihan 2), the SB Corp was allocated funding for its COVID-19 Assistance to Restart Enterprises (CARES) program and was directed to expand its loan programs including that for tourism.
It was mandated to administer loans for the hardest hit industry but subject to guidelines from the tourism department.
During the hearing, Puyat disclosed some details of the guidelines that have been so far agreed upon.
SB Corp will prioritize DOT-accredited Micro, Small, and Medium Enterprises (MSMEs) to make it easier for the tourism stakeholders to avail of the loan.
Aside from zero collateral, the loans will also be interest-free, payable in three years with a one-year grace period for a total loan term of four years.
According to Puyat, the loan application, which will include a two to three-minute video presentation, may be submitted online. If the loan is approved, a minimal service charge for loan administration will be charged by the SB Corp.
“The agreement is to focus on MSMEs, which is also the emphasis in the Tourism Response and Recovery Plan (TRRP). Our priority now is to sustain our tourism workforce. By providing the working capital needed through these loans, the tourism businesses that have lost much because of the pandemic will be provided with a lifeline,” she said.
Puyat said the P6 billion credit facility may also be made available to non-accredited businesses provided that they are licensed by the local government unit (LGU).
The credit facility is part and parcel of the P10.1 billion package for the tourism industry under Bayanihan 2, which also includes P1 billion for tourism road infrastructure to be implemented with DPWH; P100 million for DOT-accredited and LGU licensed tour guides; and P3 billion to be administered by the Department of Labor and Employment (DOLE) for cash-for-work program to help DOT-accredited enterprises and its displaced employees.
Puyat stressed that the policy for the P3 billion program is not just a release of funds. It will be used as a cash-for-work or cash-for-training mode “because the intention of both departments is to ensure that apart from the cash, the stakeholders will receive something permanent in the process.”