THE Philippine Chamber of Commerce and Industry (PCCI) is asking banks and non-bank financial institutions (NBFIs) to give companies at least one-year reprieve in loan payment to help them survive the lockdown and the suspension of business operations.
In a statement, PCCI said the extension should be applied on loans due between March 16 and December 31, 2020.
PCCI said without the support of banks and other NBFIs, many businesses will likely be forced to shut down.
Benedicto Yujuico, PCCI president, said the reprieve would help address the growing concern of PCCI members on their “deteriorating cash positions and diminishing ability to avoid massive layoffs” due to the implementation of the enhanced community quarantine (ECQ).
“The ECQ has brought substantially all businesses to a sudden and unexpected stop. Many are now facing economic distress, forcing them to resort to drastic cost-cutting, lay-offs and pay cuts. Even as the government slowly relaxes the quarantine measures, we expect the effects of this crisis will continue to be felt and that businesses will continue to struggle through the end of 2020,” Yujuico said.
“Creditor willingness to restructure loans maturing in 2020 will most certainly go a long way toward preserving employment, and averting permanent closure of many long-time clients and partners” of banks. Yujuico said.
Yujuico said micro, small, medium, and even large companies are straining to preserve their liquidity and cover even the most basic operating expenses.
PCCI identified 12 industries that are greatly at risk namely:
Transportation, logistics and storage sector, particularly air, land, and water transport due to continued restriction of flights and/or trips;
Wholesale and retail trade, repair of motor vehicles and motorcycles. According to PCCI, retailers such as department stores, petroleum outlets, and other retail stores not classified as essential are likely to be restricted even post-ECQ and will likely to experience lower sales as consumers will prioritize essential items;
Arts, entertainment, leisure and recreation. PCCI said leisure-related sub-industries like gambling and betting activities, sports activities and amusement and recreation activities) will continue to be restricted after the ECQ;
- Hotels, resorts, other types of accommodation and food services which will remain closed post-ECQ;
- Real estate activities especially those heavily engaged in leisure related sectors and targeting the low-income segment.
- Mining and quarrying due to the collapse in oil prices and lower demand;
- Manufacturing of textile, wearing apparel, leather and related products; of coke and refined petroleum products and; of motor vehicles;
- Construction as the government may shift the priorities for its infrastructure program;
- Financial and insurance activities especially those with substantial exposure to personal/health depending on the magnitude of the COVID-19 deaths/hospitalization;
- Professional, scientific and technical activities such as advertising, engineering, advertising and market research;
- Administrative and support services such as travel and tour operations and;
- Other community, social and personal activities.
