The Employers’ Confederation of the Philippines (ECOP) is working with the government to define mechanisms for a loan facility to help micro and small businesses affected by the pandemic provide workers with their 13th month’s salary.
ECOP President Sergio Ortiz-Luis Jr. said the Department of Trade and Industry (DTI), the Department of Labor and Employment (DoLE) and the Department of Finance have agreed in principle of providing interest-free loans of 200 to 500 million pesos for small businesses. The money will come from available funding from Small Business Corp. (SBCorp) under Bayanihan 2.
The Bayanihan to Recover as One Act or Bayanihan 2 directs the SBCorp, the financing arm of DTI, to expand its loan programs to micro, small and medium enterprises, cooperatives, hospitals, tourism and Filipino workers abroad affected by the coronavirus disease 2019 (Covid -19) pandemic and by other socio-economic reversals.
“We have also contacted the (financial) secretary (Carlos) Dominguez 3rd and he supports our initiative in the SBCorp Christmas bonus window,” Luis said.
To qualify for the loan program, micro and small businesses that intend to pay their employees the 13th month’s salary must obtain a DoLE certification that they are still operating, but are unable to provide such. advantage due to the negative effects of the crisis.
DTI Secretary Ramon Lopez said earlier that small businesses can apply for loans between P50,000 and P200,000.
The loan is repayable in one to two years.
Luis said the majority of micro and small businesses, which are unable to provide their workers’ 13th month’s salary, are located in the national capital region.
“So when we talk about the 13th month salary, it’s a bigger issue (for them). Rather than providing “ayuda” (government assistance), loans can be made to these companies. The money will be a loan that will be paid back, “he said.