Same terms will be applied for small-scale business owners that would like to borrow from the COVID-19 Assistance to Restart Enterprises (CARES) fund for the 13th month pay of their employees, Trade Secretary Ramon Lopez said.
This is after Labor Secretary Silvestre Bello III bared that the Department of Trade and Industry (DTI) committed some P4 billion that can be tapped by micro and small enterprises (MSEs) as a loan to pay for their workers’ 13th-month benefit.
“The P4 billion will come from the CARES program funded by Bayanihan 2 Act.”
Lopez explained the P4 billion will come from the CARES program funded by the Bayanihan 2 Act.
Under the Bayanihan 2, the government has allotted P10 billion to the DTI’s financing arm, Small Business (SB) Corp., to fund its loan program for micro, small, and medium enterprises (MSMEs).
Of the total fund, P6 billion was allotted for MSMEs in the tourism sector.
“(It will be the) same procedure as other MSMEs borrowing for working capital and operations,” the trade chief said.
Under the CARES program, existing MSMEs with at least one year of operation can avail the zero-interest loan.
Under the CARES program, existing MSMEs with at least one year of operation can avail the zero-interest loan.
SB Corp. only collects service fee of 4 percent for loans payable within a year, 6 percent for a two-year loan, and 7.5 percent for a three-year loan.
With the Bayanihan 2, CARES program offers loans from P10,000 to P200,000 depending on the asset size of the enterprises.
Those with a minimum asset size of P50,000 to P1 million can apply for a loan.
The Department of Labor and Employment (DOLE) recently ruled out the deferment and exemption of employers to give 13th-month pay to their workers.
Presidential Decree 851 mandates all employers to give 13th-month pay on or before Dec. 24.
Bello earlier said the government would need up to P13.7 billion to subsidize the 13th-month pay of employees working in distressed businesses due to the coronavirus pandemic.