COA: P4.99 billion Bayanihan funds to aid MSMEs unused

Adrian Ayalin, ABS-CBN News

Posted at Mar 10 2022 05:00 PM

People pass by closed shops, some of which were affected by the ongoing COVID-19 pandemic, in Binondo, Manila during Chinese New Year on February 1, 2022. Jonathan Cellona, ABS-CBN News
People pass by closed shops, some of which were affected by the ongoing COVID-19 pandemic, in Binondo, Manila during Chinese New Year on February 1, 2022. Jonathan Cellona, ABS-CBN News

MANILA — A total of P4.99 billion or around half of the funds for loans to micro, small and medium enterprises remain unused under Bayanihan 2 or the Bayanihan to Recover as One Act, as of mid-2021, the Commission on Audit said. 

Out of P9.08 billion released for the zero-interest loans under the CARES Program or COVID-19 Assistance to Restart Enterprises, only 45.04 percent was utilized as of June 30, 2021. This benefitted at least 28,222 MSMEs, auditors said in a performance report. 
 
"A total of ₱4.99 billion or 54.96 percent of the released budget of the program remained unutilized as of end of Bayanihan 2," the COA said. 

Auditors said they identified "several major challenges", including "insufficiency of human resources." They said SB Corp., which is in charge of the program, normally operates with a P1.5 billion budget. 

The SB Corp. utilized 98 percent of its initial P1 billion budget under Bayanihan 1, but the P10 billion budget under Bayanihan 2 was "beyond" its normal capacity, auditors said. 

"We found that the SB Corp. adopted an automated system to process loans, however, there were no significant adjustments in human resources,” they added. 

Auditors also noted the hesitancy of potential beneficiaries to avail of the assistance.

They said only 48,010 MSMEs applied out of the 995,745 potential clients of SB Corp. 

“One major reason for this is that the bulk of the budget is allocated for the tourism industry. Many tourism-based companies are hesitant to restart their business due to the multiple imposition of ECQ in the country,” the auditors said.

The report also noted deficiencies in the administration of the program as some of the respondents cancelled their loan applications because of long processing time and non-communication of the status of their applications.

“We also noted the existence of fragmentation of functions among the stakeholders, which is primarily caused by lack of a policy, specifying the roles and responsibilities of the stakeholders,” the auditors said.

The report said SB Corp. should develop a mechanism to check whether the loan proceeds were used for the intended purpose.

“Moving forward for implementing similar program, there is a need for risk-assessment, among others, on capacity of the implementing agency, needs of the clients and type of funding (equity or subsidy),” the auditors said.

Malacañang has yet to respond to a request for comment on the COA findings.