More industries call for financial aid under Bayanihan 2
Two industry groups – aerospace and chemicals – have called for the inclusion of the manufacturing in the Bayanihan to Recover as One or Bayanihan 2 economic stimulus stressing that doing so will mitigate the economic recession and reinvigorate the economy through revitalizing consumption and enhancing production capacity.
Aerospace Industries Association of the Philippines (AIAP) and Samahan sa Pilipinas ng mga Industriya Kimika (SPIK) have submitted their position papers in support of the proposals of the Department of Trade and Industry to include the manufacturing and construction sectors in the Bayanihan 2.
In the case of the AIAP, their letter addressed to Senator Juan Edgardo "Sonny" Manalang Angara and Rep. Lray Villafuerte has proposed that the Bayanihan 2 bicameral committee considers the grant of incentives to investors, moratorium on loan payments and for mandating government procurement to prioritize locally produced products over imported ones.
“We at the Aerospace Industries Association of the Philippines support the Bayanihan 2 and hopefully be given the immediate attention to mitigate the economic recession and reinvigorate the economy through revitalizing consumption and enhancing production capacity. It will surely help a lot of aerospace industries that are badly affected by the pandemic,” stated a letter signed by AIAP President Dennis Chan.
In particular, AIAP cited the proposed joint venture between Land Bank of the Philippines and Development Bank of the Philippines to invest or enter into a joint venture agreement to incorporate a special holding company, to be known as Accelerating Recovery to Intensify Solidarity and Equity, Inc. or ARISE, Inc. that is a stock corporation to be organized under Republic Act No. 11232 otherwise known as The Revised Corporation Code of the
Philippines within 6 months beginning from the date of effectivity of the rules and regulations of this Section, or effectivity of applicable revenue regulations, whichever is later, subject to the following:
Under the proposal, the purpose of ARISE, Inc. is to assist strategically important companies affected by COVID-19 pandemic to address solvency issues, such as those with considerable impact on the economy including companies from the agriculture, infrastructure, service and manufacturing industries and other industries to be identified in the implementing rules and regulations.
AIAP cited this provision as critical for the recovery of the airline industry stressing that: “As of now, most airline associated supply chain are greatly affected and this provision can maintain and sustain the industry so it will be able to get back on track if there is a need for government to be part of that company to ensure the survival of certain companies deemed strategic.”
AIAP also said that the provision to grant 365-day loan payment moratorium to businesses will certainly help the sector in order for the industry to be given time for the market to return. Principals of loans extension of 1 year can alleviate a lot of cash flow problems most companies are facing now. There is a need for a clear and understanding to implement this since most right now are in a critical situation.
The group noted that other ASEAN countries like Thailand has initiated a one year extension of all loan principals thereby reducing all the documentation needed and for the companies to be sustainable when the businesses affected are reduction from 40 percent to 90 percent of the business.
“It will surely help companies in ensuring that their obligations are given 10 years to help businesses recover. The period hopefully is ample time for the solution for a vaccine and return to the skies,” said AIAP.