THE Philippine Chamber of Commerce and Industry (PCCI) is asking banks and other financial institutions to extend the loan maturities for at least a year, as businesses struggle to survive amid lockdown measures to contain the coronavirus pandemic.
The country鈥檚 largest business organization in a statement on Monday said loan maturities due between March 16 to Dec. 31, 2020 should be extended for at least one year.
PCCI President Benedicto V. Yujuico said the group鈥檚 members are concerned about 鈥渄eteriorating cash positions and diminishing ability to avoid massive lay-offs,鈥 adding that businesses of various sizes are straining to retain liquidity and cover basic operating expenses.
Companies in Luzon were forced to suspend operations after the enhanced community quarantine (ECQ) was implemented in Luzon in mid-March.
鈥淭he ECQ has brought substantially all businesses to a sudden and unexpected stop. 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,鈥 he said.
Mr. Yujuico said that creditors鈥 willingness to restructure loans maturing in 2020 will help preserve employment and avoid permanent close of businesses, adding that many are long-term clients of banks.
鈥淲ithout the support of Philippine banks and other NBFIs (nonbank financial institutions), many businesses will likely be forced to shut down,鈥 he said.
PCCI identified industries that are 鈥済reatly at risk,鈥 such as transportation and logistics; wholesale and retail trade; arts and entertainment; hotels; and financial and insurance.
鈥淪ales would likely be subdued as consumers will prioritize essential items and many restrictions might be imposed by the government post-lockdown. Many consumers are likely to choose to continue to quarantine themselves. Retail petroleum will also be at high risk due to the collapse in oil prices and lower demand,鈥 PCCI said.
Manufacturing of non-essential items will also be affected, including textile, refined petroleum, and motor vehicles.
鈥淐onstruction business, for most, have stopped during the ECQ. After the lockdown, there will be winners and losers as the government may shift the priorities for its infrastructure program. Many real estate companies have scaled down project launches this year,鈥 PCCI added.
Other at-risk industries include real estate activities targeting low-income segments; mining and quarrying affected by a collapse in oil prices and lower demand; professional activities like architecture, engineering, advertising and market research; administrative and support services including travel agencies, and other community activities.
鈥淧CCI expressed hope that its proposal will be considered to mitigate the potentially fatal effects that COVID-19 is having on many business enterprises,鈥 it added. — Jenina P. Iba帽ez
