The Small Business Corporation (SB Corp.) is set to open a lending facility for exporters this week to assist their financing needs for the shipping of their products, the Department of Trade and Industry (DTI) said.
Trade Secretary Ramon M. Lopez told the BusinessMirror that the financing firm will soon start accepting applications for the shipping loans, which is payable up to 90 days from shipment date.
The trade chief said the Export Development Council requested for the financing program, targeting the exporters who are ready to ship their products as the borrowers.
“The SB Corp. financing will help our exporters get a reservation slot in the ship carriers in a timely manner,” Lopez said. “Due to global need for vessel space, some shipping companies are asking for advanced payment so these financing are really needed at these challenging times to sustain our export growth momentum.”
The global supply chain has been dealing with constraints in shipment deliveries brought about by container imbalance amid the pandemic. This has resulted in major delays, affecting the exporters’ revenues and production.
According to industry sources, the shipment delays are seen to persist even after the Christmas rush, noting that the second half of the year is the peak shipping season.
The Philippine Exporters Confederation Inc. (Philexport) welcomed the opening of the lending window for the exporters amid surging freight costs.
“The shipping rates were already high [in the] first half of the year from 3 to 4 times previous freight cost,” Philexport Chairman George T. Barcelon told the BusinessMirror.
Exporters from different sectors, including furniture and garments, have previously raised the alarm on the freight increase as this adversely impacts their financials. Ma. Flordeliza C. Leong, Philexport vice president for advocacy, communications and special concerns, even recently told the BusinessMirror that “many food orders had been canceled already due to the huge freight rate increase.”
The current situation was even exacerbated by the closure of a port in China, Barcelon said, as this is seen to further increase freight rates.
“The SB loan would help financially tide exporters over, both small and medium establishments,” he added.
In June, SB Corp. and the Alliance of Concerned Truck Owners and Organizations (ACTOO) inked a memorandum of agreement, extending a loan program to qualified truck owners as aid to the logistics sector’s recovery.
Over 2,000 ACTOO members may apply for loans, which are not subject to interest and collateral. Those who can submit financial statements may secure loans amounting to P600,000 to P5 million, while those without may apply for borrowings between P10,000 to P200,000.