June 2, 2023

The city’s local finance committee is recommending amending the ordinance granting loans as economic stimulus package for small businesses affected by the pandemic so that more could avail of the program.
City Budget Officer, Atty. Leticia Clemente, said only few have availed of loans under the P100 million Baguio’s Revitalization Actions for a Vibrant Economy-Economic Stimulus Package (Brave-ESP) loan facility intended for micro, small, and medium enterprises (MSMEs), because most of these businesses could not meet some of the requirements to qualify for the loan.
Brave-ESP is a zero-interest, non-collateral soft loan of the city for MSMEs affected by community quarantines starting March 2020. It is part of the city’s P150M Covid-19 fund.
The city government targeted about 2,900 beneficiaries but during the first round of implementation only 260 have filed for application and only 64 of them qualified.
“We are thinking of having the ordinance amended so we can cater to more MSMEs, as we have learned from the first round of implementation,” Clemente said.
She said they will ask the city council to amend Ordinance 75, s. 2020 to ease up the requirements so that more MSMEs could benefit from the loan package.
Among the proposed amendments is to ease the minimum of one-year in business requirement since most of the MSMEs have just started their business and still have no track record to show.
The committee also recommends adjusting the maximum amount that can be borrowed and make the borrower’s capa-city to pay as basis in granting them the loan.
The ordinance caps the amount that small and micro businesses may borrow at maximum of P50,000, and P100,000 for medium enterprises.
“Medyo kokonti ang nag-a-avail because micro and small firms can afford higher than the maximum of P50,000. We will propose making the loanable amount from P10,000 to a certain range, and the basis now to grant them the loan is their capacity to pay so that if it is found they are able to pay, then we can loan them a higher amount,” Clemente said.
She said the capacity to pay is determined through investigation and background check of the borrower by the Small Business Corporation, the city’s partner in the program’s implementation.
They will also recommend allowing those who already availed of loans from other government agencies to also qualify to avail the Brave-ESP, as long as they are able to pay based on the result of their background check.
However, the mandatory requirements that a business must be registered and therefore has a business permit will remain.
“What we really wanted is to capture those in the underground economy, who sadly are not registered and do not even have a tax identification number, which is an obligation. Most of our MSMEs are not registered so how can we help them if we do not know where they are,” she said.
She added it is about time people became conscious of paying their dues to the government as amounts set aside as loans are taxpayers’ money, which the government must protect and recover so it can be used for others who need loans as business startup capital. – Hanna C. Lacsamana