AVAILABILITY of the government loan facility for the tourism sector remains low even though 70 percent of the sector is “in distress”.
Data from the Department of Tourism (DOT) showed that as of November 5, 2021, there were 528 loan applications amounting to P242.83 million that were approved by state-owned Small Business Corp. (SBCorp) as part of its CARES for Travel program. program. Of this amount, some 223.45 million pesos have already been paid to 473 accredited tourism companies.
Loan approvals, however, represent only 3.72% of the P6 billion in funds allocated to the loan window created under Bayanihan 2. The allocation had been vigorously opposed by DOT and stakeholders.
In the weekly Kapihan sa Manila Bay, Tourism Secretary Bernadette Romulo Puyat noted: “Unlike the agricultural sector where I worked, the tourism sector is not used to lending counters”, to explain the low rate. availability.
This was supported by the President of the Philippine Tourism Congress, Jose C. Clemente III at the same event, “We are not used to borrowing”, but added that he had encouraged more stakeholders to tap into them. SB Corp. funds, “because it’s always bridge financing.
He said: “70% of tour operators and travel agencies can be considered in distress. Many of my friends have closed [their companies] and moved to other businesses like food because of this pandemic and [for about two years], we have virtually no income. A few have reopened due to domestic tourism, but that is still not enough.
Asia “the most conservative” in the reopening
He stressed: “They are afraid to borrow because they don’t know when the pandemic will end. But SBCorp has been very, very flexible in their loan terms, and they have said they are prepared to extend the loan repayment in case the borrower is unable to repay on time. He added that the loan company, which reports to the Ministry of Trade and Industry, has also simplified the application process by requiring fewer documents.
Micro, small and medium-sized accredited tourism enterprises can benefit from loans without collateral and at zero interest rate within the framework of CARES for Travel, with maximum loanable amounts of 600,000 pesos (micro-enterprises with assets of up to 3 million pesos); 3 million pesos (small businesses with assets not exceeding 15 million pesos); and P5 million (medium-sized enterprises with assets exceeding P15 million, but not more than P100 million).
To increase loan availability, Clemente said he would ask SBCorp to increase loanable amounts, a proposal, Romulo Puyat said, which DOT will approve. “Whatever the private sector wants, we support it. “
Meanwhile, Aileen Clemente, president of Rajah Travel Corp., said in the same Kapihan that the Philippines’ hosting of the World Travel and Tourism Council (WTTC) summit in March 2022, “will hopefully do , relaunch the reopening of the tourism industry, “noting that” Asia is the most conservative in reopening “.
Describing it as the private sector counterpart of the United Nations World Tourism Organization, the WTTC, she said, is the private sector-led organization bringing together CEOs of “popular brands we know as Hilton, Carnival [Cruises], and airlines like Emirates, etc. About 600 delegates are expected to attend the March summit, which is chaired by the Tourism Promotions Board, the marketing arm of DOT. Clemente, a member of the WTTC, co-chairs the Philippine national organizing committee for the WTTC summit.