MANILA, 17 June 2021: The Philippines’ Department of Tourism has extended the grace period to two years on loan repayments to ease the burden on travel companies, the Philippines News Agency reported this week.
DOT also eased the terms for interest-free soft loans to encourage more micro, small and medium enterprises (MSMEs) in the tourism industry to secure loans managed by the Small Business Corp. (SB Corp) of the Department of Trade and Industry (DTI).
But even the two-year grace period may not be enough for travel firms to recoup losses and start loan repayments. It could take up to five to eight years for travel firms in the ASEAN regions to regain the business volume enjoyed in 2019 before pre-Covid-19 shut down tourism in early 2020.
According to DOT, the flexible terms allow businesses to apply for the second round of loans for employee retention and a maximum loanable amount of PHP5 million.
Tourism Secretary, Bernadette Romulo-Puyat, commented in a statement urging firms to apply for loans: “While we see the vaccination of tourism workers as the light at the end of the tunnel for the industry, we also know that tourism businesses still badly need the government’s support to get by in the coming months as we wait for vaccine doses to arrive.”
Travel firms accredited by the DOT or registered by the Barangay Micro Business Enterprises can apply for loans not exceeding 15% of their annual sales or 20% of asset size. The figures will be based on the businesses’ financial statements for 2018 or 2019 filed with the Bureau of Internal Revenue.
The DOT noted that the maximum loanable amount for applicants with BIR-filed financial statements is PHP5 million for medium enterprises, PHP3 million for small enterprises and PHP300,000 for micro-enterprises.