MANILA – Philippine banks are likely to restructure loans to small businesses to help them recover from the coronavirus pandemic when it is over, an economic adviser to President Rodrigo Duterte said Tuesday.
Businesses that were forced to close during the month-long COVID-19 lockdown won’t be able to pay their loans, making restructuring necessary, Presidential Adviser for Entrepreneurship Joey Concepcion said.
The smallest in the country’s 1.5 to 1.6 million micro, small and medium enterprises, as well as the informal sector are the worst hit by the COVID-19 pandemic, he said.
"Definitely all banks are going to work out something because, beyond 30 days, I’m almost certain that all banks would restructure the loans because these people will not be able to pay. So what do you do? You restructure," Concepcion said.
Banks are also encouraged to provide additional lending since small businesses need money to refinance their capital and to pay their workers, he said.
Duterte’s possible realignment of the budget, under a new bill passed by the Congress early Tuesday, can be used to help MSMEs, he said.