10% of MSMEs closed as of June – DTI

by Louella Desiderio (The Philippine Star), 8 Jul 2021

MANILA, Philippines — Around 10 percent of micro, small and medium enterprises (MSMEs) have closed as of June amid the COVID-19 pandemic, according to the latest survey of the Department of Trade and Industry (DTI).

Speaking at the Senate committee on trade, commerce and entrepreneurship hearing yesterday, Trade Secretary Ramon Lopez said the DTI’s survey covered 33,145 respondents. He said 46 percent of MSMEs are partially operating and 44 percent have full operations.

He said a survey conducted in May, covering 24,087 respondents, showed 16 percent of MSMEs were closed, 47 percent were in partial operation and 37 percent had full operations.

Lopez said MSMEs also reported a decline in sales. In particular, 53.80 percent said their sales were down in June, lower than the 90.70 percent that saw sales decrease in July last year amid the pandemic.

In terms of workers displaced, he said the shift of National Capital Region Plus to general community quarantine from modified enhanced community quarantine reduced the estimated number to 765,454 workers from 1.40 million.

As for loans extended under the COVID-19 Assistance to Restart Enterprises (CARES) program of DTI’s financing arm Small Business (SB) Corp., Lopez said a total of P4.79 billion have been approved for 31,409 borrowers.

Of this amount, P4.57 billion were approved for MSMEs under the Bayanihan CARES component and P35.57 million for overseas Filipino workers starting businesses under the Bayanihan HEROES component.

Meanwhile, P187.91 million worth of loans were approved for tourism establishments under the Bayanihan TRAVEL component.

As P2 billion worth of funds allocated under the Bayanihan 2 for the CARES program were not released by the Department of Budget and Management to the SB Corp., Lopez said the agency would need these funds to continue to lend to MSMEs.

For the food and beverage service industry, he said the DTI would want to provide support through gradual reopening.

“We are now looking into their proposal if they have fully vaccinated staff, it’s a suggestion made by the restaurant group headed by Eric Teng, we are saying maybe we can consider additional percentage capacity, especially if all the staff in the restaurants are vaccinated,” he said.

In terms of micro financing, he said there are talks with SB Corp. to have a special window for the restaurant industry under the CARES program.

As for the bank loan principal payment moratorium being requested by the industry, he said this would be worked out with the Bangko Sentral ng Pilipinas.

On the tax payments moratorium, he said this could be endorsed and discussed with local government units.

“From what we heard, business renewal fees are based on 2019 sales and sales were high in 2019… In our recommendation, it should be based on 2020 sales if you pay 2021 business fees renewal,” he said.

He said there is likewise a request for the persons with disability and senior citizen discounts carried by businesses be made deductible from their tax due computations and this would have to be discussed with the Bureau of Internal Revenue.

Aside from incentives, he said the industry is also pushing for a restaurant or business revitalization fund which can be considered for the 2022 budget.

“The government plays a vital role in beefing up both MSMEs and consumers to get back to their former economic and business health. Legislation for key support financial provisions, more dynamic policy direction [on] rent relief, loan payment moratorium, project funding, these are of utmost importance in the domestic businesses’ early recovery and not to forget domestic preference in government procurement to patronize locally manufactured products,” he said.

He also said a total of 7,244 safety seals have been issued by the different government agencies to establishments found compliant with minimum health and safety protocols.

Safety seals are not mandatory, but allow establishments to operate at an additional 10 percent capacity.