Government eyes lending to private schools, tourism establishments

MANILA, Philippines — The government may extend loan assistance to private schools and businesses in the tourism sector to help them cope with the impact of the coronavirus disease 2019 or COVID-19 pandemic, according to the Department of Finance (DOF).

During a virtual meeting with Congress’ Defeat COVID-19 sub-committee on economic stimulus technical working group, Finance Secretary Carlos Dominguez bared that the government is planning to implement financing programs to various sectors, including private schools and tourism enterprises.

Dominguez said the program for private high schools is under study by the DOF with the Land Bank of the Philippines.

“If private schools provide a study-now, pay-later program and get a promissory note from the student, Landbank can lend to the private school, probably up to 70 or 75 percent of the value of the promissory note,” Dominguez told lawmakers. 

Although the numbers haven’t been finalized yet, Dominguez said the Landbank could probably extend at least P1 billion in loans under this facility.

The finance chief said the program would also cover both private high schools and colleges.

“Really, this is aimed for people, especially the overseas Filipino workers who are coming back, and decided to upgrade their skills and go back to school,” he said.

Meanwhile, Dominguez said the government is considering the provision of loans and fiscal incentives to the tourism industry which is one of the hardest hit sectors by the COVID-19 pandemic.

He said Tourism Secretary Bernadette Puyat has submitted a letter to the DOF, seeking assistance for the tourism industry, particularly the hotel and restaurant businesses.

“For the tourism industry, I’m sure we will come up with a loan program and probably some fiscal incentives for them, because that tourism industry is going to be bad for some time,” Dominguez said.

“I don’t think if the lockdown is lifted anywhere, that people are still going to travel. I think they are still going to be very very careful,” he said.

Dominguez said the assistance for the tourism sector would be part of the government’s bounce back plan, which is now being drafted.

“We are conducting a survey of the different industries and asking them exactly what packages do they need,” he said. “So the programs are going to be very targeted and very industry-specific.”

During the meeting, Dominguez also reiterated that the government is planning to launch a P120 billion credit guarantee program for small businesses.

He said the program would be implemented by the Philippine Guarantee Corp. (PhilGuarantee).

“PhilGuarantee is ready to guarantee up to P120 billion of loans that banks give to small and medium enterprises (SME). SME goes to a bank, borrows the money, the bank goes to PhilGuarantee and we will provide guarantee of the loan,” the finance chief said.