MICRO, small, medium enterprises (MSME) need more subsidies rather than financing, said Marikina Rep. Stella Luz A. Quimbo, citing the latest state auditor’s report showing low uptake of loans offered by the government to help the sector recover from the economic impact of the coronavirus pandemic.
“I hope that the economic managers seriously consider expanding the various subsidy programs for MSMEs, such as DTI’s (Department of Trade and Industry’s) Livelihood Seeding Program – Negosyo Serbisyo Sa Barangay,” Ms. Quimbo said in a statement released Friday.
“This is the way to get small businesses re-started, and eventually, for them to muster enough confidence to avail of the expanded loan programs. Subsidies are especially important today, with the series of oil price hikes,” she said.
The Commission on Audit’s report dated March 2 showed P4.9 billion or over half of the COVID-19 Assistance to Restart Enterprises (CARES) program loans remained untapped as of end-June 2021.
Ms. Quimbo said MSMEs generally have a loan risk aversion while many belong to the informal sector or are unbanked.
“Meanwhile, it would also make sense for the GFIs (government financial institutions) to further streamline the loan requirements and provide more effective credit mediation services. Small businesses need ‘handholding’ now, so they would have the courage to loan,” she said.
MSMEs comprise 99.5% of the 957,620 registered establishments in the country, based on 2020 data from the Philippine Statistics Authority. — Jaspearl Emerald G. Tan