The P5 billion microfinancing allotted to the micro small and medium enterprises (MSMEs) sector is nearing full utilization and needing replenishment.
Small Business Corporation (SBCorp), which administers the fund, reported it has already processed and approved P4.5 billion loans for 30,408 applications from various MSMEs as of June 9, 2021. The loan approvals, which include P185 million from the MSME tourism enterprises, are under the COVID-19 Assistance to Restart Enterprises (CARES) microfinancing program of the SBCorp.
“In view of this, there is a need to replenish this fund if we are to lend out to more MSMEs affected by the pandemic,” said Trade Secretary Ramon Lopez, who is also chairman of SBCorp.
Lopez said this as the House of Representatives passed on third and final reading the P401 billion economic stimulus package or Bayanihan to Arise as One Bill 3 or Bayanihan 3, but which counterpart bill was not tackled at the Senate with Senators urging government to spend first the Bayanihan 2 funds before asking for a third package.
The proposed P401 billion Bayanihan 3 at the Lower House was to be divided into three phases: Phase 1 Phase 1 – P165.9 billion; Phase 2 – 186 billion; and Phase 3 – P48.6 billion.
Based on the breakdown, the DTI or its MSME program did not get any allocation. However, more than half or P216 billion of the total amount in the House bill was set aside as “Ayuda to all Filipinos” through the Department of Social Welfare and Development.
Th CARES program, which was established to help the country’s MSMEs recover from the COVID-19 pandemic, got P1 billion funding from 2021 General Appropriations Act (GAA) and P4 billion from BAYANIHAN 2 for a total of P5 billion allocation.
Lopez said he expects that CARES will use up its target fund allocation by the end of June and will be requiring replenishment as the country continues to rebuild economically from the ongoing worldwide pandemic.
Despite this, the trade chief further encouraged MSMEs to continue applying for the CARES loan. “With this microfinancing program providing collateral-free and interest-free loans to businesses affected by the pandemic, our MSMEs can begin to rebuild their respective businesses and take part in the recovery that has started around the world,” Sec. Lopez stressed.
The DTI is also working together with the Department of Tourism (DOT) in promoting the other side of CARES, Php6-billion CARES for Tourism Rehabilitation and Vitalization of Enterprises and Livelihood (CARES for TRAVEL) Program for tourism-related businesses heavily impacted by the COVID-19 pandemic. The two agencies expect an acceleration in the utilization of CARES for travel as more tourism economic activities are starting to reopen with the easing of community quarantine restrictions.
Lopez expressed optimism that with the arrival of added vaccine doses this month, and the rollout of vaccination for the 35-million A4 priority group or economic frontliners, the overall vaccination rollout will be boosted, which will increase consumer and business confidence in the business sector.
The trade chief said, “The country’s vaccination program will prove to be a timely shot in the arm as well for the economy, as it will lead to continuous reopening with less threat of a surge, thus creating a good momentum for sustained recovery, more investments and greater employment opportunities for the Filipinos.”