DTI grants 1-month moratorium on MSME loan payments
Louella Desiderio (The Philippine Star) - March 26, 2020 - 12:00am

MANILA, Philippines — The financing arm of the Department of Trade and Industry (DTI) is offering a one month moratorium on loan payments of micro, small and medium enterprises (MSMEs) and partner financial institutions (PFIs) in Luzon to help them deal with the impact of the coronavirus disease 2019 or COVID-19.

Small Business (SB) Corp. said the moratorium on loan payments covers the period from March 16 to April 14, and would be open to MSME borrowers and PFIs within the area placed under the enhanced community quarantine due to COVID-19.

SB Corp. recognizes the impact of this public health crisis on the economy. This measure is to help MSME borrowers and PFIs defray their expenses and focus on providing for the needs of their employees and businesses,  SB Corp. president and chief executive officer Ma. Luna Cacanando said.

Apart from the moratorium on loan payments, borrowers may also request to pay only the interest of their monthly payments for the succeeding six months and regular monthly payments may be resumed thereafter.

Loan terms may also be extended depending on how events unfold.

SB Corp. may impose a shorter grace period and or extension of the loan term depending on the business involved.

“Rest assured that SB Corp.’s decision on each request shall take into consideration economic realities on the ground,” Cacanando said.

The moratorium on loan payments is the latest assistance to be made available by the DTI to businesses affected by COVID-19.

Earlier, Trade Secretary Ramon Lopez said the DTI is making available a P1 billion loan package for micro and small businesses affected by the COVID-19 through the Pondo sa Pagbabago at Pag-asenso (P3) program.

SB Corp. said the P1 billion Enterprise Rehabilitation Financing (ERF) facility under the P3  would be implemented once the community quarantine is lifted.

The facility forms part of the government’s P27.1-billion package of priority measures to help fight COVID-19 and provide relief to affected sectors.

The ERF loan is open to micro and small enterprises with at least one year continuous operation prior to March this year, and whose businesses suffered drastic reduction in sales during the COVID-19 pandemic.

Microenterprises with asset size of not more than P3 million may borrow P10,000 up to P200,000, while small enterprises with asset size of not more than P10 million may borrow a higher loan amount or up to P500,000.

Borrowed funds should be used to update loan amortizations for vehicle loans or other fixed asset loans of the business; replace inventory for damaged perishable stocks; and as working capital replacement to restart the business.

Loans under the ERF have a monthly interest rate of 0.5 percent.

A grace period on payments will be given to borrowers until such time the crisis has abated.

DTI LUNA CACANANDO SMALL BUSINESS
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