The Market Monitor Minding the Nation's Business
To kick-start the economy when the quarantine gets lifted, government plans to inject more than P30 billion in loans for companies affected by the business disruptions caused by the COVID-19 pandemic.
The Department of Trade and Industry (DTI) is tapping the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) to allocated P30 billion for proposed lending activities for COVID-affected companies.
Meanwhile, Congressional leaders intend to authorize the two state-owned banks to administer a plan to offer proposed negative interest loans.
Joey Salceda, chairman of the House Ways and Means Chairman and co-chairman of the House Stimulus Cluster, said the negative-interest loan initiative is an incentive to keep the jobs of employees and sustain the size of a firm’s operation.
Integral to the P350-billion program is the retention of employees.
Earlier, Trade Secretary Ramon M. Lopez said, “We are making extra programs in getting more funds for entrepreneurs, not just workers, so they could be given loans, which they could use for their working capital requirement.”
The proposed incentive is in addition to the P1.2-billion low-interest loans which the DTI already announced to help micro, small and medium enterprises (MSMEs) that were affected by the six-week ECQ in Luzon. Lopez said they will also extend their P1.2-billion loan program.
“This loan [program] will be triggered upon lifting [of the ECQ in some areas] because one of the [requirements] is for the inspection of their businesses. This means they should be operating. We cannot start this until the ECQ (enhanced community quarantine) is lifted,” Lopez said.
The economy is expected to undergo a soft opening in May as government starts relaxing its anti-COVID-19 measures in areas under GCQ.
The DTI is anticipating the GCQ implementation will have minimal impact on the country’s economy since it will not include areas which it considers business powerhouses.
“The bulk of operations are in Metro Manila, Regions 3 and 4, Cebu and Davao. All of these are under ECQ, so we will have to wait for 15 days or more before the rest of our economy could start moving,” Lopez said.
Under ECQ, all onsite business operations except those dealing with essential goods and services, remain suspended.