A SPECIAL report released by the Commission on Audit last March 2 revealed that P4.99 billion or 55 percent of the P9.08 billion released by the government as a zero-interest loan to micro, small, and medium enterprises (MSMEs) has been left unutilized.
The COA said it prepared the 86-page performance audit report to determine the effectiveness of the COVID-19 Assistance to Restart Enterprises (CARES) Program in assisting MSMEs, to define and evaluate challenges in the program implementation, and review if compliance of agencies involved worked with established policies and procedures.
CARES Program was rolled out through the Small Business Corporation (SB Corp.), a financing arm of the Department of Trade and Industry (DTI).
Congress allocated P11 billion for the program, including P1 billion solely for the processing of applications.
Owners of small businesses were offered interest and collateral-free loans and were only charged a service fee of four percent to eight percent depending on the loan term availed.
Micro businesses may borrow up to P600,000; small enterprises up to P3 million; and medium enterprises up to P5 million.
Under RA 11494 or the Bayanihan to Recover as One Act (Bayanihan 2), P6 billion of the total funding under CARES was earmarked exclusively for release to businesses under the tourism sector.
However, the audit team the P10 billion allocation was too big compared to SB Corp.’s usual budget of only P1.5 billion.
“The ₱10 billion allocation for CARES under Bayanihan 2 was beyond the normal capacity of the SB Corp to process and release to MSMEs within the effectivity of the Bayanihan 2,” the COA said.
While the agency adopted an automated system to process loans, it did not add enough personnel to handle the bulk of loans processing.
“There were no significant adjustments in human resources. The second major challenge is hesitancy of potential clients to avail the assistance. Of the 995,745 potential clients of SB Corp, only 48,010 MSMEs applied. That is an availment rate of only 4.82 percent,” the COA pointed out.
To highlight the massive infusion of cash into the agency, auditors noted that even the P4.09 billion that was released in total loans already represented 273 percent of SB Corp’s usual budget of P1.5 billion for its regular program.
The COA likewise noted that allocating P6 billion to the tourism sector tied up the funds because industry players showed little interest.
“Many tourism-based companies are hesitant to restart their business due to the multiple imposition of ECQ (enhanced community quarantine) in the country,” auditors said.
A breakdown of the released loan amount showed P1.46 billion went to 3,057 small enterprises, P1.5 billion to 23,687 micro enterprises, P1.09 billion to medium enterprises, and P45.27 million to “unidentified enterprises.”
