AS we have experienced firsthand, the coronavirus disease 2019 (Covid-19) pandemic has quickly turned from a health crisis into a humanitarian and economic crisis. The strict implementation of the enhanced community quarantine (ECQ) has broken our food supply chain and threatens to dislocate millions of people employed by micro, small and medium enterprises.

To lessen the negative economic impact of the Covid-19 pandemic on small businesses, farmers, fishermen and consumers, the government enacted the Republic Act (RA) 11469 or the “Bayanihan Heal as One Act.” To ensure the implementation of the law and continuous food production, the Departments of Labor and Employment, Trade and Industry (DTI), Agriculture (DA), Finance, Budget and Management and Interior and Local Government issued Joint Memorandum Circular 1, series of 2020, that provides guidelines to freeze prices of certain commodities and provide livelihood assistance through programs, cash, loan assistance and moratorium on loans.

Price freeze

With the aim of preventing unscrupulous businessmen and opportunists from price gouging, the different government agencies issued several directives to control the prices of certain commodities. Pursuant to RA 7581 (“Price Act”), as amended, DTI announced a nationwide price freeze on all basic goods and necessities for 60 days or until May 15, 2020.

In compliance with the Price Act, the Department of Health (DoH) issued Memorandum 2020-0058, 2020-0058-A and 2020-0058-B providing for the price freeze of essential medicines. The DA likewise issued AC, which provides for the suggested retail price of agricultural and fishery commodities in Metro Manila.

On March 17, 2020, the Office of the President issued Memorandum Circular 77, directing the DoH, DA and DTI to undertake continuous monitoring and review of prices of basic commodities and enact such price control measures pursuant to the Price Act.

On April 13, 2020, the Agriculture department issued a memorandum circular approving suggested retail prices for basic agricultural and fishery commodities and expanding the coverage of the commodities for the price freeze. The expanded price freeze includes major types of rice, local galunggong, pork liempo, medium chicken egg and cooking oil. The prices will be monitored by the Bantay Presyo Task Force in partnership with the Local Price Coordinating Councils.

Cash assistance, financial subsidy to rice farmers

Rice farmers with a farm size of 1 hectare or less and listed under the Reporting System for Basic Sectors in Agriculture (RSBSA) are entitled to a one-time cash assistance of P5,000, which they can use to buy either farm inputs or their necessities.

The rice farmers will receive the cash assistance through direct cash transfer. The DA earlier announced that it would start distributing the cash assistance to 600,000 farmers in the second week of April through the Land Bank of the Philippines.

Livelihood seeding program

The government has a P200-million fund to provide assistance in the form of enterprise development training, livelihood kit amounting to at least P5,000, but not more than P8,000 and business counseling/mentoring, to microentrepreneurs affected by calamities.

Covid-19 Pondo Para sa Pagbabago at Pag-Asenso Enterprise Rehabilitation Fund (Covid-19 P3-ERF)

DTI’s Small Business Corp. (DTI- SBCorp) has set up a P1-billion special financing program for micro and small business enterprises (MSEs) affected by the Covid-19 pandemic.

A loan starting from P10,000 up to P500,000 will be extended to small enterprises with asset size of not more than P3 million, and up to P200,000 for micro enterprises with asset size of not more than P10 million, with a 0.5 percent discounted monthly interest rate. Only micro and small business enterprises, which have had one year of continuous operation prior to March 2020 and had drastic reduction in sales, are entitled to avail of the Covid-19 P3 ERF. In order to become eligible, claimants must submit: a) barangay (village) clearance and b) local government unit (LGU) certification of business establishment for at least one year.

The proceeds of the loan may be used only for: vehicle loans or other fixed assets loans; inventory replacement for damaged perishable stock; and working capital replacement to restart the business.

The DTI-SBCorp will be accepting applications for the Covid-19 P3-ERF after the ECQ is lifted.

Survival and Recovery (SURE) Assistance Program for marginalized, small farmers and fishermen

Aside from the cash assistance for rice farmers, the government financial institutions and non-government financial institutions will also be extending an interest free loan assistance of P25,000 per borrower to marginalized, small farmers and fishers affected by the ECQ to be validated by the DA Regional Field Office and LGUs. Such loan is payable in 10 years.

Recovery package for micro and small enterprises engaged in agriculture and fisheries, food production and other supply chains

Loan assistance at concessionary rates and capacity building shall be provided to MSEs engaged in agriculture and fisheries production, and other supply chain activities, to ensure the availability of food supply, and help them recover their losses due to the ECQ. Eligible borrowers may avail of loan assistance amounting to P300,000 up to 90 percent of their projected cost, but not to exceed P15 million.

But according to the DA, eligible MSEs may avail only up to P10 million loan, payable in five years. Recently, the DA announced that it has allotted P2.5 billion for the credit program in helping the MSEs, small, marginal farmers and fishers. It had previously announced that it has approved an initial P1-billion loan assistance fund. Barely two weeks after the approval thereof, a total of P246.3 million in loans has been initially approved through the Agricultural Credit Policy Council (ACPC). P183.8 million was lent to small, marginal farmers and fishers, and P62.5 million was lent to nine MSEs engaged in agriculture and fisheries production.

According to the DA, “The financing program is part of the expanded SURE Aid and Recovery Project, in support of the ‘Ahon Lahat, Pagkaing Sapat Kontra Covid-19,’ or Plant, Plant, Plant Program, which aims to increase farm productivity and ensure food sufficiency during the Covid-19 emergency situation.

“The DA-ACPC taps its network of 230 partner lending conduits nationwide to implement the SURE Aid Covid-19 loan program, as well as other financial windows, serving small farmers, fishers, young entrepreneurs, SMEs, and agri-fishery cooperatives and associations, in coordination with DA Regional Field Offices and LGUs.”

Documentary requirements for applicants for the aforementioned programs are as follows:
For rice farmers:
– RSBSA enrollment stub (for cash assistance)
– Notice of cash grant (for cash assistance)
– Loan application (for SURE Aid)
– Any government-issued ID with picture
– Duly accomplished simplified Promissory note
For service conduit borrowers (pre-release):
– Loan application
– List of eligible rice farmers
– Board resolution for financial assistance and designating at least two authorized signatories to execute loan documents with identified government financial institution
– Promissory note
– Authority to debit deposit account
For service conduit borrowers (post-release):
– Liquidation report on the loan disbursed prior to next loan availment
– Deed of assignment of subpromissory notes.

Moratorium on loan payments

A mandatory grace period of 30 days shall be extended for all loans with principal and/or interest falling due within the ECQ period. No interest on interest shall be due. Under the joint memorandum circular, a request may be made through e-mail or text message. Only interests due for the succeeding six months are covered. The moratorium also covers the loans under the P3 loan program.

Many banks have already announced a payment holiday and/or grace period for credit cards and/or specific loan payments for qualified/eligible customers.

Ensuring food production and security during these times is essential for economic and practical reasons. The programs set by the government seek to address the same, realizing the importance of our farmers, fisherfolk and small business enterprises to the economy. It is good that the government thought of ways to assist these sectors not only financially but also through training and mentoring programs, which they would need to meet their daily needs, ensure food production and to boost their business activities especially after the ECQ. This assistance will somewhat help maintain the economy and help rebuild it after the ECQ.

The government should also consider the aftereffects of the community quarantine to the consumers. It should consider extending the effectivity of the price freeze considering the reduction and loss of income of the citizens and the extension of the of the quarantine period to April 30, 2020. Would 15 days after the lifting of the quarantine be sufficient for the citizens to recover from its adverse financial effects?

True, this suggested price freeze extension may affect the businesses which would want to recoup lost income. However, the welfare of the Filipino people should be considered, especially the daily wage earners who have lost their income for more than a month — and most probably depleted their savings to meet their families’ daily needs during the quarantine.

https://www.manilatimes.net/2020/04/25/opinion/analysis/saving-small-businesses-and-ensuring-food-supply-in-a-pandemic/718453/?fbclid=IwAR1sb8zB7B82W8OByg_9yWx3m81W4Yg7xjE0hfjXTcdUkV7o1IV9jtTPlag