The COVID-19 pandemic currently ravaging the world has been causing lockdowns and putting non-essential businesses on virtual standstill. In the Philippines, many areas are under “Enhanced Community Quarantine” (ECQ) which is basically a lockdown, causing non-essential businesses to temporarily shutter its doors and resulting in economic reverses.
One of the hardest hit sectors are the micro, small and medium enterprises (MSMEs) who are not big enough and cash-rich enough to survive the suspension of its businesses without government aid. Thus, the government through a law, issuances, and other declarations, have been making steps to help SMEs survive the ECQ and its operations thereafter, to wit:
- Mandatory thirty (30) days grace period for all loans falling due within the (ECQ) and waiver of penalties, interest, and other charges. All loans includes but is not limited to salary, personal, housing, motor vehicle, credit card, and other business loans.
LAW: Section 4(aa) of Republic Act 11469 and its Implementing Rules and Regulation
- Mandatory thirty (30) days period on commercial rents falling due within the ECQ period for MSMEs that have temporarily ceased operations without incurring and penalties, interest, and other charges.
- Further, the cumulative amount of rents falling due within the ECQ shall be equally amortized in the six (6) months following the end of the ECQ and shall be added to the rents due to on succeeding months. Again, there should be no penalties, interest, and other charges.
ISSUANCE: DTI MEMORANDUM CIRCULAR NO. 20-12 Series of 2020
- The Small Business Corporation under guidance of the DTI is offering an Enterprise Rehabilitation Financing Facility named Pondo sa Pagbabago at Pag-asenso (Covid19 P3-ERF) for MSMEs. The features of the said loan are as follows:
- Micro and small enterprises with at least one year continuous operation prior to March 2020, and whose businesses suffered drastic reduction in sales during the ensuing epidemic may access the loan fund;
- Micro enterprises with asset size of not more than P3.0 million may borrow P10.0 thousand up to P200.0 thousand;
- Small enterprises with asset size of not more than P10.0 million may borrow a higher loan amount but not to exceed P500.0 thousand;
- The loan shall be used to help the enterprise stabilize or recover from its losses. Specifically, the following purposes are qualified:
- Updating of loan amortizations for vehicle loans or other fixed asset loans of the business;
- Inventory replacement for perishable stocks damaged;
- Working capital replacement to restart the business
- Interest rate shall be at 0.5% per month (discounted basis); and
- Grace period on payments shall be given until such time that the economic crisis has abated.
SOURCE: SMALL BUSINESS CORPORATION WEBSITE
Written by: Atty. Jon Dominic Penaranda