The Department of Tourism (DOT) and the Small Business Corporation (SB Corp) signed a Memorandum of Agreement (MOA) on Monday to finalize the COVID-19 Assistance to Restart Enterprises (CARES) for Tourism Rehabilitation and Vitalization of Enterprises and Livelihood (TRAVEL) program that will extend loan assistance to micro, small, and medium enterprises (MSMEs) from the tourism industry.
Signed by Tourism Secretary Bernadette Romulo-Puyat and SB Corp’s President and Chief Executive Officer Ma. Luna E. Cacanado, and Department of Trade and Industry (DTI) Secretary Ramon M. Lopez, the MOA seeks to disburse P6 billion worth of loans to tourism MSMEs, using the budget allocated to the SB Corp’s CARES program under the Bayanihan to Recover As One Act (Bayanihan 2), which directed the agency to expand its loan programs including that for tourism and “to administer loans for DOT but subject to guidelines from the DOT.”
“We thank Secretary Ramon M. Lopez for making CARES for the TRAVEL program a priority. We look forward to working with the SB Corp in providing our tourism enterprises with what they need – access to working capital loans,” Puyat said.
The tourism chief said the program will accelerate the country’s tourism recovery from the harsh impacts of the pandemic.
“By working together, we can hopefully bring tourism, an industry that contributed 12.7 percent to the country’s 2019 GDP, back to its glory days,” she added.
Through the DOT and SB Corp’s CARES for TRAVEL program, tourism MSMEs will have access to zero interest, no-collateral loans with a loan term period of up to four years, including a corresponding grace period of up to one year. The borrower MSMEs will only need to pay a one-time service fee, which is set at a maximum of eight percent for a 4-year loan.
SB Corp will evaluate and process all loan applications of DOT-accredited MSMEs and local government (LGU)-accredited small-scale tourism-oriented enterprises to ensure their eligibility and will determine the loanable amount and terms in accordance with the CARES for TRAVEL program guidelines.
On the DOT’s part, it will regularly endorse to SB Corp a list of DOT-accredited tourism enterprises and LGU-accredited small-scale tourism-oriented enterprises that may be entitled to avail of business loans under the CARES for TRAVEL Program, subject to further evaluation by SB Corp.
Meanwhile, the SB Corp will regularly submit loan implementation reports to the DOT subject to compliance with Republic Act No. 10173, the Data Privacy Act of 2012.
“Aside from rescaling, rebooting, and making some sort of whole industry pivot, we also recognize the need for tourism MSMEs to have access to financial assistance or funds just to tide them over the present pandemic crisis,” Puyat said.