Gov. Art Yap got the support of the Regional Development Council (RDC)-7 full council for the three points he raised during the meeting this morning (June 1):
1) LGUs be allowed to borrow money from Land Bank of the Philippines and Development Bank of the Philippines (DBP) under an interest concession to zero rate for the small businesses and water projects so that farmers can increase food production and for micro, small and medium enterprises (MSMEs) to be able to operate under the new normal;
2) call on the Bangko Sentral ng Pilipinas to allow all debtors to exercise the option of restructuring their loans without penalties or surcharges that may be imposed against them for so choosing to restructure their loans, as he explained that the normal policy of the BSP is to impose penalty on restructured loans because restructured loans are considered as failed loans; and
3) to coordinate with DTI to position the Central Visayas region to possibly be able to absorb or attract companies that are leaving China right now.
Yap cited an article published in the Philippine Star yesterday where it was stated that four multinational companies are now leaving China. “Unfortunately in the survey, we are losing to Vietnam.
The No. 1 country that is harvesting all the companies that are leaving China right now is Vietnam. Second is the Philippines in terms of preference. No. 3 is Indonesia. No. 4 is Thailand.
Since Asec. Aster Caberte is with us, maybe the RDC can look into this and coordinate titling with Asec. Caberte on what the region should be preparing for along this line,” Yap said. For her part, DTI Asec. Aster Caberte said Yap’s proposal is very timely as a solution to a situation at the Mactan Export Processing Zone.
Caberte said that in the economic development committee meeting of the RDC-7 last week, she raised an immediate problem in the region on the overhitting of Mactan Export Processing Zone.
She said there are locators who might have problems as they refused their contract.
As suggested by NEDA-7 Regional Director Efren Carreon, the three points were endorsed through three separate resolutions- -the lower rates for IRA-backed LGU loans is addressed to financial institutions; the restructuring of loans by banks is addressed to the Bangko Sentral ng Pilipinas; and positioning Central Visayas to attract multinational companies that are leaving China is addressed to DTI and other concerned agencies.
Yap raised the points to brace against the looming futility of the passage of the Philippine Economic Stimulus Act (PESA) as it might be overtaken by time, with only three days left of session days in Congress.
The governor shared that as conveyed by Sen. Migz Zubiri during the joint meeting of the Senate Committees on Finance and Economic Affairs last Friday through video conference, the PESA might not be approved within time.
As former House deputy speaker and chair of the House Committee on Economic Affairs, Yap was invited to join the joint meeting of the Senate Committees on Finance and Economic Affairs where proposed measures to address the economic impact of COVID-19 were tackled.
During the Senate committee meeting, Yap had also presented the first two points in the domestic stimulus plan of Bohol. “I am very alarmed and I am asking our three congressmen to intervene.
There are only three days left of session days in Congress and it seems the Philippine Economic Stimulus Act will not be passed yet. And, that means we don’t have a domestic stimulus program,” Yap said.
Facing this reality, Yap suggested that provincial governments must then be supported in their own domestic stimulus plans.
For Bohol, Yap said the stimulus plan is for the provincial government to be allowed by Land Bank of the Philippines and Development Bank of the Philippines (DBP) to borrow under an interest concession to zero rate, and to fund water projects.
The money will be flushed down and lent to micro, small and medium enterprises (MSMEs) “because we need to fund the MSMEs”, Yap said.
“In the meantime, the national agencies must use their funds now to retrain and retool people because if they don’t retrain, retool and readopt people, even if you give them funds, they will not know how to operate,” Yap explained.
Under an interest concession, the interest rate is reduced as compared to commercial rates where the government agency would provide the concessions or through a government grant to a lending bank. Yap also raised these two points at the Senate committee meeting which he believes could bring businesses back to action.
The governor sought support on his proposal that the provincial government may avail of a loan from Land Bank of the Philippines or Development Bank of the Philippines and it would be passed on to small businesses who need the working capital or to help the small businesses adapt to the new normal in reopening their businesses.
He explained that the local government units have more loan affordability because they have credit lines with LBP and DBP and these are IRA-backed.
He is negotiating for a zero-percent or up to one-percent-interest loan and a grace period of two years so that the payment of amortization would start on the third year yet.
The governor said national agencies may give support through grants for the MSMEs.
The second point that Yap raised was the need to call on the Bangko Sentral ng Pilipinas to allow all debtors to exercise the option of restructuring their loans without penalties or surcharges.
This is in consideration that the borrowers at this time of the pandemic could operate in a limited capacity or have stopped operation because of the preventive measures implemented all over the Philippines to limit the human interaction to contain the infection of Covid 19.
Yap explained that the normal policy of the BSP is to impose penalty on restructured loans because restructured loans are considered as failed loans.
On this, the governor is asking the BSP to relax on their rules at this time of the pandemic just so confidence in business would be regained.