DTI offers relief loans of up to P500,000 for small businesses
MANILA, Philippines — Small businesses, such as online merchants, may now borrow up to P500,000 from the government to help them survive the economic downturn caused by the COVID-19 pandemic, Sen. Sherwin Gatchalian said on Monday.
Gatchalian, Senate economic affairs committee vice chair, said the state-owned Small Business Corp. (SBC), an attached agency of the Department of Trade and Industry (DTI), had allocated P1 billion for lending to micro and small businesses.
As he and several of his colleagues earlier argued, the senator reiterated that it would be wrong for the Bureau of Internal Revenue to mandate online sellers to pay taxes and other registration fees at this time.
“Entrepreneurs are asking not just for financial assistance. They are asking for an opportunity to freely grow their businesses and earn,” Gatchalian said in a statement.
“DTI should provide capital for Filipinos who want to start their own online business after losing their jobs. During a pandemic like this, it would be better for them to just stay home while running their own business,” he added.
Gatchalian said micro enterprises with assets of less than P3 million may apply for a P200,000 loan from SBC with minimal monthly interest of 2.5 percent.
On the other hand, he said small businesses with assets of less than P10 million may borrow up to P500,000 without collateral.
Trade and Industry Secretary Ramon Lopez confirmed in a Viber message that online merchants were included in the fund as “it is open to all micro and small [businesses].”
Lopez recently urged online sellers to register their business, arguing that their customers would be more willing to trust the products if their taxes were accounted for.
The DTI estimated that there were probably more than 6 million micro entrepreneurs that are not registered, while only about 1.5 million micro entrepreneurs are registered.
Lopez said businesses would inevitably have to register as their operations grew.
“We know, however, that eventually, the unregistered business will register as they grow in size, because sooner or later, they will have to borrow from formal lending institutions like banks and their audited financial statements will be required,” Lopez said previously.
“Moreover, if they get to serve larger establishments, official receipts for their sales will be required, thus they will have to be registered,” he said.
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