MSMEs’ working capital low amid lack of funding
The current lockdown being implemented by the Philippine government has to succeed because a second one would cause bigger problems for micro, small and medium enterprises (MSMEs), according to Secretary Joey Concepcion, presidential adviser for entrepreneurship.
Concepcion in a radio interview with DZBB on March 26 said that while MSMEs are being given temporary relief from financial obligations, they are not getting funds from banks.
“Karamihan ng mga MSMEs are not being asked to pay. But they are not getting additional funding from microfinance institutions, ‘yung mga rural banks, ‘yung mga thrift banks,” Concepcion said.
He attributed this to “fear of survival.” “They (banks) want to be sure ‘yung mga loan… people will not default so automatically ‘yung problema ngayon is the supply of money and hopefully that will be addressed.”
Concepcion explained that banks are also getting hit by the health crisis.
“Yung mga bangko because of fear, are pulling back. They’re not lending and they’re doing selective lending so talagang matatamaan itong mga MSMEs.”
Concepcion said the one-month lockdown has to succeed through people’s cooperation.
“If we continue with the lockdown, mas malaking problema para sa mga MSMEs natin kasi ‘yung working capital nila ubos na in this first round, and ‘yung funding galing sa mga bangko ay wala pa diyan kasi nahihirapan din ang bangko mag-lend kasi baka lumaki rin exposure nila.”
He stressed, the importance of the immediate resumption of manufacturing.
“Once we are over this lockdown, the most important thing is we have to go back to manufacturing. We have to run our plants because this is what will give the people jobs. We cannot lockdown again because then nobody will have jobs. The government cannot continue giving money, giving food because we will run out of that… we don’t have those resources.” – Press release