The country’s economic managers are deliberating a P80-billion to P100-billion stimulus package for micro and small businesses to help them cope with the disastrous economic effects of the COVID-19 pandemic, according to Department of Trade and Industry Secretary Ramon Lopez.
The stimulus package, said Lopez, intends to provide up to P200,000 in loan assistance to small businesses and P100,000 to micro enterprises including sari-sari stores.
An ordinary micro business has no more than nine employees and with assets of not more than P3 million. These represent 90 percent of all local companies.
The proposed credit package will be offered without interest.
Complementing the funding assistance will be technical training as a component of the package, according to Lopez.
The technical assistance package is worth P10 billion, Lopez said.
Meanwhile, Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas said they have provided liquidity to the system to support businesses in weathering the crisis.
“The BSP has increased liquidity by reducing the reserve requirement ratio (RRR) by 200 basis points (bps) and cut policy rate by 125 bps,” Diokno indicated.
BSP slashed its rates by 25 bps in February and 50 bps in March.
“BSP has provided incentives for banks to offer new lending to micro, small and medium enterprises by counting new loans to small firms as compliance to reserve requirement of banks,” added Diokno.
BSP’s move is expected to boost lending to small businesses, complemented by guarantees from PhilGuarantee of up to P120 billion.
Diokno said payment of loans during the enhanced community quarantine period has been deferred, with no interest for late payment, and other fees and penalties, in compliance with the Bayanihan Act.