Biggest business group in PH calls for longer loan payment extension

The Philippine Chamber of Commerce and Industry (PCCI) is asking banks and other non-bank financial institutions (NBFIs) for an extension of loan maturities that are due between March 16, 2020 and December 31, 2020 for at least a year.

The largest business organization in the country believes that such loan payment extensions will help companies survive the lockdown and the suspension of business operations, which have been in effect for almost two months now.

“The enhanced community quarantine (ECQ) has brought substantially all businesses to a sudden and unexpected stop,” said PCCI President Amb. Benedicto V. Yujuico. “Many are now facing economic distress, forcing them to resort to drastic cost-cutting, lay-offs, and pay cuts. Even as the government slowly relaxes the quarantine measures, we expect that the effects of this crisis will continue to be felt and that businesses will continue to struggle through the end of 2020.”

Appealing for the support of banks and NBFIs, PCCI pointed out that industries—micro, small, medium, and even large companies—are straining to preserve their liquidity and cover even the most basic operating expenses.

PCCI President Amb. Benedicto V. Yujuico

“Creditor willingness to restructure loans maturing in 2020 will most certainly go a long way toward preserving employment and averting permanent closure of many long-time clients and partners of banks. Without the support of Philippine banks and other NBFIs, many businesses will likely be forced to shut down,” Yujuico explained.

PCCI emphasized that the following industries are greatly at risk:

1. Transportation, logistics, and storage. Air, land, and water transport are affected due to the continued restriction of flights and/or trips.

2. Wholesale and retail trade, repair of motor vehicles, and motorcycles. Department stores, petroleum outlets, and other retail stores not classified as essential may still likely be restricted even after ECQ is lifted. Sales would also likely be subdued as consumers will tend to prioritize essential items.

3. Arts, entertainment, leisure, and recreation. Physical distancing and stay-at-home orders would more likely continue post-ECQ.

4. Hotels, resorts, and other types of accommodation and food services activities may remain shut for some time.

5. Real estate activities especially those heavily engaged in leisure-related sectors and targeting low-income segments.

6. Mining and quarrying

7. Manufacturing

8. Construction. Many real estate firms have already scaled down project launches this year.

9. Financial and insurance activities

10. Professional, scientific, and technical activities

11. Administrative and support services activities. Related sub-industries like travel agencies, tour operators, reservation services, and related activities are affected by physical distancing and stay-at-home orders.

12. Other community, social, and personal activities

PCCI hopes its proposal will be considered to mitigate the potentially fatal effects of the ECQ on many enterprises.