Aklan 2nd District Rep. Teodorico Haresco Jr. (File photo)
MANILA – Aklan 2nd District Rep. Teodorico Haresco Jr. has proposed to triple the allocation for Small Business (SB) Corp., the financing arm of the Department of Trade and Industry (DTI), for 2021.
“I echo the sentiment of Deputy Speaker Loren Legarda for an appeal to the appropriations committee to at least triple the amount given to SB Corp.,” Haresco said during the budget hearing of the Committee on Appropriations at the House of Representatives on Wednesday.
He added that boosting the assistance for micro, small, and medium enterprises (MSMEs) would help the economy recover in a V-shape pattern rather than a U-shape recovery.
SB Corp. is allocated PHP1.5 billion annually to roll out the government’s microfinancing program Pondo sa Pagbabago at Pag-asenso or the P3 Program, which provides low-interest loans to Filipinos who would like to start their own business.
However, during the pandemic, PHP1 billion from the fund was being used for the Covid-19 Assistance to Restart Enterprises (CARES) program – a zero-interest loan for micro and small enterprises (MSEs) that have been affected by the global health crisis.
The CARES program only charges a 6-percent service fee and also give a six-month grace period before an MSE starts the loan payment.
SB Corp. president and chief executive officer, Ma. Luna Cacanando, told the Philippine News Agency (PNA) that they can mobilize the PHP1-billion fund in two months.
This means that for a year, the DTI-attached corporation would need PHP6 billion.
“If the budget will be tripled to PHP4.5 billion, we can absorb it. For the sake of the distressed MSME sector, we will do it, although it is really a huge job,” Cacanando said. “We just need the usual 5-percent mobilization fund to be carved out from the money to be allocated for us. We use this to pay for the necessary contractual hiring, and more importantly to fast-track our digitization platforms.”
During the budget hearing, Trade Secretary Ramon Lopez underscored the efficacy of the low-interest lending program for small-scale businesses.
He said the P3 Program was able to lend PHP6 billion with its PHP3.5-billion budget for the past three years.
This means that the interest and repayment from borrowers were being lent again to other borrowers.
The P3 Program also has a repayment rate of 95 percent, Lopez said.
“It is really a good investment,” he said.
“Lending empowers the entrepreneurs for many years. Dole out empowers them for one month, maybe. But with this (P3 Program), we continue to empower the entrepreneurs because they were able to borrow and start their own business and pay,” he added. (PNA)
