Guidelines for loans to MSMES in tourism out soon

MANILA, Philippines — The Department of Tourism (DOT) continues to work with the Small Business Corp. to finalize the guidelines for the loan program to be offered to tourism enterprises.

Under the Bayanihan to Recover as One Act or Bayanihan 2, the tourism industry was allocated P6 billion for loans through the COVID-19 Assistance to Restart Enterprises (CARES) program of SB Corp., which is under the  Department of Trade and Industry.

The DOT has been in constant dialogue with SB Corp to come up with the appropriate guidelines for the loan program for tourism MSMEs.

In the recent budget hearing at the House of Representatives, Tourism Secretary Bernadette Romulo-Puyat shared some details of the guidelines that have so far been agreed upon.

Puyat said the interest-free loans would be payable in three years with a one-year grace period for a total loan term of four years.

“The loan application, which will include a two- to three-minute video presentation, may be submitted online,” the DOT said.

If the loan is approved, a minimal service charge for loan administration will be charged by SB Corp.

SB Corp. also agreed to prioritize DOT-accredited MSMEs to make it easier for the tourism stakeholders to avail of the loan.

According to the DOT, the P6 billion credit facility may also be made available to non-accredited businesses provided that they are licensed by the local government unit (LGU).

“The agreement is to focus on MSMEs, which is also the emphasis in the Tourism Response and Recovery Plan (TRRP). Our priority now is to sustain our tourism workforce. By providing the working capital needed through these loans, the tourism businesses that have lost much because of the pandemic will be provided with a lifeline,”Puyat said.

The P6 billion credit facility is part of the P10.1 billion package for the tourism industry under Bayanihan 2, which also includes P1 billion for tourism road infrastructure to be implemented with DPWH,  P100 million for DOT-accredited and LGU licensed tour guides and P3 billion to be administered by the Department of Labor and Employment (DOLE) for cash-for-work program to help DOT-accredited enterprises and its displaced employees

The tourism sector, among the hardest hit by the COVID-19 pandemic, is a key driver of the Philippine economy

Data from the DOT showed estimated inbound tourism revenues  plunged by 72 percent to P81 billion as travel restrictions remain in place amid the pandemic.  International visitor arrivals dropped by 73 percent to 1.3 million.

In 2019, the tourism sector contributed 12.7 percent to the country’s gross domestic product and comprised 13.5 percent of the country’s total employment providing 5.7 million jobs.