Baguio City offers zero interest loan for small businesses

Baguio City offers zero interest loan for small businesses

BAGUIO CITY – The city government is reiterating its call to the public to take advantage of the zero-interest financial assistance for micro and small businesses here that comes in the form of a soft loan.

Atty. Leticia Clemente, city budget officer, on Monday reiterated the call after they were informed by the Small Business Corporation (SBC) that there are still very few applications, with only 31 so far, which have been approved.

The city government allocated PHP100 million stimulus package from its coronavirus disease 2019 (Covid-19) operations fund to help ailing micro and small enterprises (MSEs) bounce back from the effect of the pandemic.

SBC, which was tapped to process the loan application, is a subsidiary of the Department of Trade and Industry (DTI) which manages funds for loans to MSEs.

Clemente said that since the city’s Baguio Revitalization Actions for a Vibrant Economy–Economic Stimulus Package (BRAVE-ESP) was rolled out last month, there were only 100 applications received. Out of the number, 31 were approved and 38 were denied. The others are in process.

The program offers a minimum loan of PHP10,000 to a maximum of PHP50,000 for MSEs. Owners of small businesses can borrow up to PHP100,000.

The loan is zero interest but those who avail of the loan maturing in less than 12 months are charged 6 percent service fee while loans payable beyond one year are charged 8 percent service fee.

She encouraged interested small and micro business owners to avail of the loan privilege provided by the city government, its way of helping industries recover from the pandemic.

The applications are available at the City Permits and Licensing Office.

Clemente said that 2,000 heavily impacted micro and small businesses affected by the strict implementation of the community quarantine protocols are being eyed as initial beneficiaries of the local stimulus package.

Initially, the BRAVE-ESP was supposed to run through from the 4th week of June to the 4th week of August, or until such time the funds allotted for the purpose will be exhausted.

Based on data from the City Permits and Licensing Division, more than 20,800 of the over 23,400 registered businesses are classified as micro, while more than 2,400 are small enterprises.

The Hotel and Restaurant Association of Baguio (HRAB) in one of the meetings said that some 70 to 78 percent of the city’s tourism-related businesses have been heavily impacted during the implementation of the community quarantine from April to June with more than PHP550 million in supposed labor cost lost during the period.

The situation also caused displacement of thousands of workers in tourism-related businesses.  Liza Agoot / PNA –