DTI offers P1 billion loan package for MSMEs

MANILA, Philippines — The Department of Trade and Industry (DTI) is making available a P1-billion loan package which micro, small and medium enterprises (MSMEs) affected by the coronavirus disease 2019 or COVID-19 could tap.

Trade Secretary Ramon Lopez said P1 billion is being allotted for the agency’s Pondo sa Pagbabago at Pag-asenso or P3 microfinancing program for lending to MSMEs with operations affected by COVID-19.

He said the fund forms part of the government’s P27.1-billion package of priority measures to help fight COVID-19 and provide relief to sectors affected by the economic impact of the virus.

“This could easily be given to those affected by COVID-19,” he said.

Under the P3 which is administered by DTI’s financing arm Small Business Corp., loans amounting to P5,000 up to P200,000 could be extended, depending on the size of the business and the enterprise’s ability to pay.

Loans are provided even without collateral and at an interest rate that does not exceed 2.5 percent.

P3 was launched to provide an alternative to the “5-6” lending system.

In the “5-6” lending system, many borrowers fall into a debt trap for while they can get loans without collateral or any documentary requirement, they have to pay exorbitant interest rates of 20 percent or even higher.

Lopez said the implementation of the P3 program has been successful with a 98 percent repayment rate.

P3 program forms part of government’s efforts to give a boost to MSMEs, especially the micro enterprises.

Apart from making loans available,  DTI is also providing assistance  by helping find new sources for inputs and non-traditional markets for businesses affected by supply chain disruptions due to COVID-19.