PRIVATE sector tourism stakeholders are appealing for more relaxed guidelines and lenient loan terms under the Bayanihan 2 law, to help them recover faster.
“While the CARES for Travel program that resulted from the Bayanihan 2 Law helped some of the stakeholders, the [loan] amounts so far released have proven inadequate especially with the uncertainty of when we will be able to resume business operations due to the developing nature of the pandemic. We feel that more can be done to assist our battered industry using the funds allocated for tourism in the aforementioned legislation,” said Tourism Congress of the Philippines (TCP) President Jose C. Clemente III, in a letter to Undersecretary for Tourism Development Benito C. Bengzon Jr. dated April 6, 2021.
According to Bengzon, as of March 31, 2021, the Small Business Guarantee Corp. (SB Corp) has approved P129.12 million in loans for 346 applicants. Of the approved applications, some P90.12 million has been released to 260 tourism enterprises/loan applicants.
The approved loan amounts, however, are just 2.1 percent of the P6-billion in funds allocated for working capital loans of the tourism sector under Bayanihan 2. SB Corp, a government financial institution under the Department of Trade and Industry, has been tapped as the conduit for the loans, which are collateral-free and carry a zero-interest rate. About 10,000 micro, small, and medium tourism enterprises (MSMEs) accredited by the Department of Tourism, have been eyed as beneficiaries in this program.
In its letter, TCP suggested an increase in loanable amounts, “as we have received accounts of loans being approved but in small amounts that would hardly help the stakeholders for the long term.” The GFI, however, uses a company’s financial statements (FS) submitted to the Bureau of Internal Revenue as basis for loan approvals. “Perhaps there are other documents that may be submitted to justify higher [loan] amounts.”
Separately, Clemente told the BusinessMirror that he had actually helped compute for the loan amounts that would be required by the tourism companies. “When I was doing it I was under the assumption that we would be receiving the full amounts, thus I accepted the basis of six months of overhead for MSMEs, that’s why we came up with max loan amounts of P5 million for medium, P3 million for small, and P1 million for micro enterprises. But because of the requirement that the loan will be based on your company’s FS, no one really got the full amount that was supposed to be allocated,” he explained.
The TCP also proposed that companies already approved for loans “be allowed to apply for an additional amount subject to additional requirements or documents. Again, we cite the effects of the uncertain nature of the pandemic on businesses’ ability to resume operations.”
The association likewise urged for “more lenient repayment terms” as the new surge in Covid-19 cases as well as the spread of new virus variants as a drag on the industry’s recovery. SB Corp requires MSMEs to repay their loans, anywhere from one to four years, depending on the loan size.
“As a result, stakeholders who have or had intentions to apply for the loan fear that they may not be able to start repaying the loans even after a grace period of one year or less, as some have been given. The utilization for the CARES for Travel program would increase if stakeholders would be assured that they will be given ample time to start repayments,” said the TCP.