MANILA - Sen. Grace Poe on Tuesday urged senators to tighten the rules that identify beneficiaries of the government's low-interest loan programs during the coronavirus crisis, saying the law should ensure that borrowers have the capacity to pay.
Credit assessments should show that the borrower's business was hit by the coronavirus crisis, and that it was not bankrupt prior to the 75-day lockdown in the capital region and nearby areas, Poe said in plenary.
"There should be a common sense provision that will determine if a company has the capacity to pay and has the track record of being productive, including a proper credit assessment of the borrower," Poe said.
"I think we should put something to guarantee that the loans are given to companies that have the capacity to pay, to employ and to deliver," she said.
But Sen. Ralph Recto said that the Bayanihan to Recover as One bill should also prioritize micro, small and medium enterprises instead of large corporations.
"Most of the time, private banks tend to lend to the big businesses... Should we limit it to micro, small and medium enterprises only?" Recto said.
"I'd like to keep language [of the bill] as general as possible so then there would be max flexibility o the part of lending institutions," said Senate Finance Committee chair Sonny Angara, who sponsored the bill.
Several executive agencies have extended low or zero-interest loans to farmers and small businesses who were forced to close their businesses for nearly 2 and a half months as the government tried to stem the spread of COVID-19 in the country.
Private banks were also told to keep their interest rates "reasonable" to help the government in addressing the economic effects brought by the global pandemic.
The Senate is expected to finalize the details of the bill this week, before Congress goes on a 2-month break on June 5, 2020.