THE Small Business Corp. (SB Corp.) will seek bank financing to expand its available funds for lending to small businesses, and plans to deploy part of its P10-billion budget from the Bayanihan to Recover As One Act (Bayanihan II) to pay for interest, the Department of Trade and Industry (DTI) said.
“Ang plano po doon para mapalaki ang pondo (The plan is to expand the available funding). The budget itself can be used to pay up for the interest that we can subsidize,” Trade Secretary Ramon M. Lopez said during a budget hearing at the House of Representatives on Sept. 8.
“For example, we want to borrow from LANDBANK (Land Bank of the Philippines) or DBP (Development Bank of the Philippines), and we have to pay, let’s say… 5% (interest). But we want to provide a 0% (when SB Corp. lends out the funds)… we will have to pay for that subsidy so that we can lend it at 0%. So nag-cost kami ng 5%, papahiram namin at 0% so ‘yung 5% na ‘yun will have to pay up the budget for that (For the 5% cost we incur, we plan to tap the Bayanihan II budget).”
Mr. Lopez added: “It is a good scheme in a way kung ‘yun ‘yung isa-subsidize na part, for example ‘yung P30 million, it can multiply by 20, kasi 5% so ‘yung P30 million mo can get a P600-million funding with P30-million budget that you will use. Kaya mapapa-multiply pa natin ‘yung fund available. And we can use a certain part of that budget under the Bayanihan II. (The resort to bank financing will expand the available pool of funds up to 20 times if we use the budget to subsidize interest rates).”
He said the DTI is currently in talks with LANDBANK and DBP to expand lending to small firms through this scheme.
President Rodrigo R. Duterte signed on Friday the Bayanihan II bill, which provides P165.5 billion to support the economic recovery.
The DTI and its attached agencies’ proposed budget for 2021 is P20.162 billion, including the Technical Education and Skills Development Authority’s P13.5 billion.
The proposed budget for the DTI itself is P5.3 billion, with P1.5 billion alloted for SB Corp. — Arjay L. Balinbin