Palace prodded to facilitate unreleased P10-B Covid fund for small businesses

SEN. Juan Edgardo Angara prodded Malacañang on the urgency to front-load release of an awaited P10-billion fund to assist micro, small and medium enterprises (MSMES) given the fast-approaching deadline of the law assisting affected business sectors recover from the Covid-19-induced recession.

Reminding that there was “just one month left before the expiration” of the Bayanihan to Recover as One Act, or Bayanihan 2, Angara appealed for timely intervention by the Executive branch to facilitate the release of funds intended for MSMES.

The senator noted during the Senate’s plenary deliberations Wednesday on the P4.5-trillion 2021 national budget, that the Department of Trade and Industry itself disclosed only P1 billion out of the P10 billion allocated for the Covid-19 Assistance to Restart Enterprises (CARES) has been released so far.

Angara asserted that the P10 billion was intended as capital infusion to the Small Business Corporation (SB Corp.) of the DTI specifically to assist MSMES and the tourism industry through the provision of low-interest loans.

The DTI, however, admitted that a total of 1,660 loans have been approved so far, equivalent to P1.2 billion.

But senators were told over 26,000 loan applications are still pending because the balance of the funding under CARES has not been downloaded to the DTI.

Angara asserted that “MSMES are among the hardest hit by the Covid-19 pandemic due to the community quarantine restrictions,” adding that a significant number of these enterprises have closed shop “because they could no longer sustain their losses and many others are at risk of suffering the same fate.”

The senator assured that “we provided this much funding under Bayanihan 2 precisely to help these struggling MSMES so that they could continue operating and paying their employees,” noting that “the economy is slowly opening up again and our MSMES will play a big role in its revival so we should provide them with the necessary assistance right away.”

Citing DTI data, Angara noted that “only 5 percent of business establishments remain closed at this time and that all of these are MSMES.”

Angara acknowledged that the DTI is quick in processing the loan applications, taking as little as a week to approve them. “We hope the money can be released already so they can process… more of these loans. If the money is availabl, e then they can process all of these,” the senator said.

He added that the P10 billion under CARES is expected to benefit around 100,000 enterprises and 200,000 workers.

Moreover, the senator noted that based on information from SB Corp., the loan term of CARES can be up to four years with grace period of up to six months, adding that certain industries such as tourism can be granted a longer grace period of up to 12 months.

Noting that Bayanihan 2 is about to lapse, Angara expects the Senate would be discussing the possibility of extending the validity of some of the law’s provisions “so that all of the benefits would be distributed to their intended beneficiaries.”