Sotto seeks more funds for MSME support plan
THE government should augment the budget earmarked by the Department of Trade and Industry (DTI) for its Covid-19 Assistance to Restart Enterprises (CARES) program aimed at helping micro, small and medium enterprises (MSMEs), Senate President Vicente Sotto III said on Wednesday.
Sotto said the P1-billion budget for the program is not enough to help MSMEs jumpstart their businesses following the economic downturn that they suffered when most provinces were placed under strict quarantines in a bid to contain the spread of the coronavirus disease.
“Many small and medium companies are just starting to resume operations, with most if not all of them operating at 30 to 50 percent. They suffered huge income losses when their businesses were shut down for more than two months. It is the responsibility of the government to help them recover from their meltdown,” Sotto said.
The DTI’s CARES loan facility aims to help MSMEs by providing loans ranging from P10,000 to P200,000 for micro enterprises and up to P500,000 for small enterprises. The loan is channeled thru the agency’s financing arm SB Corporation.
The program was launched in mid-May. Barely a month after the program opened, the SBC announced it was suspending loan applications as it has already breached the loan facility’s funding capacity of P1 billion.
Sotto said the application period was too short.
“Many MSMEs were still in the process of assessing their income losses and have yet to determine the amount of funding assistance they needed to restart their businesses. The one-month application period was too short for them to have availed of the government loan. The DTI should reopen the application period to allow more small and medium businesses to apply,” Sotto said.
The Senate President likewise said the DTI should ask the Department of Budget and Management (DBM) to infuse extra funds for the CARES program, which has a P1-billion loan allocation.
Data from the DTI show there are over 1 million business establishments in the country, of which, 99.52 percent or 998,342 are MSMEs.
Most of these MSMEs are located in the National Capital Region, Central Luzon and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) regions.
Sotto said the DBM can tap the Executive’s Covid emergency response budget for the needed extra funds.
“We are calling on the DBM to augment the fund for the CARES program so that the application period can be reopened. In a time of crisis, it is important for government to show it cares for the small,” Sotto said.— Source: Butch Fernandez / businessmirror.com.ph