The government recently eased credit conditions for tourism companies to encourage more micro, small and medium-sized businesses to take advantage of the credit program.

In a statement, the Department of Tourism (DoT) announced that the grace period for repaying loans to tourism companies in need under the relaxed conditions of Coronavirus Disease 2019 (Covid-19) Assistance to Restart Enterprises (Cares) for Travel- Program extended to two years.

The DoT added that it hopes that more micro, small and medium-sized enterprises (MSMEs) in the tourism industry will benefit from the Small Business Corp. (SB Corp) of the Department of Trade and Industry (DTI) managed credit facility.

The government also allows a second round of employee loyalty loans and a maximum loan amount of 5 million pesos.

Tourism Minister Berna Romulo-Puyat urged more tourism companies to use the loan to recover from the pandemic.

“We thank DTI Secretary Ramon Lopez and SB Corp. for making these necessary adjustments to help tourism businesses thrive in this global health crisis. While we see vaccination of tourism workers as the light at the end of the tunnel for the industry, we also know that tourism companies still desperately need government support to get through in the months ahead while we wait for the vaccine doses to arrive, ” said Puyat.

SB Corp. recently said in a letter to the Philippines Congress of Tourism (TCP) that it has approved the extension of the grace period for loan payments from one to two years for DOT-accredited or Barangay Micro Business Enterprises-registered tourism MSMEs (BMBE).

Also, the loan amount was increased relative to the company’s financial data.

Under the amended policy, the loan amount cannot exceed 15 percent of the company’s annual sales or 20 percent of the asset, whichever is greater – no less than what was previously provided by SB Corp.

The figures are based on the 2018 or 2019 financial statements filed with the Bureau of Internal Revenue.

The maximum loan amount for applicants whose financial statements have been filed with the Bureau of Internal Revenue (BIR) remains at 5 million pesos for medium-sized businesses, 3 million pesos for small businesses, and 300,000 pesos for micro-businesses.

Companies with existing loans under the Bayanihan Cares program can also reapply for a second round of employee retention loans, provided that applicants with existing loans under the program do not exceed the maximum loan amount and their annual financial statements submitted to the BIR have a higher loan amount.

Commerce Minister Ramon Lopez previously announced that of the Pesos 6 billion allocated to the Cares for Travel program, the government has so far only approved pesos 185 million in loans.

“Takes care of travel [is] just gaining momentum as we reopen more tourism activities, “said Lopez.

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