MANILA - At least 70 percent of the P10-billion fund allocated to help small businesses remains intact as several establishments are hesitant to borrow money during the pandemic, Trade Secretary Ramon Lopez said Friday.

The government has released P3.3 billion of the P10 billion assistance fund for the microfinancing of micro, small and medium enterprises under the Bayanihan to Recover as One Act (Bayanihan 2), Lopez told ANC's Headstart.

"Walang backlog 'yan. Kami pa nag-iimbita, kami pa nag pro-promote ngayon," he said.

(There is no backlog there. We're even inviting, we're even promoting now.)

"Our potential borrowers are probably a bit reluctant. They are worried about repaying kasi (because) if their business is closed, how can they commit to pay?" he said.

"That's the reason why microfinancing is not needed, but straightforward subsidy," he said.

• Low interest loans available for small businessmen post-lockdown: trade chief

The government is offering up to P200,000 for micro and small enterprises, while medium-sized businesses can borrow up to P500,000 with 0.5 percent monthly interest and payable in 2 to 5 years.

There will be a grace period of 5 to 6 months for payments, Lopez said.

Micro businesses have P3 million in assets, small firms have P3 million to P15 million while medium enterprises have P15 million to P100 million, according to the government's definition.

• Pandemic pushing 9 pct of PH firms to consider permanent closure: survey

Of the P10 billion fund, P6 billion is allotted for tourism-related businesses, Lopez said.

"'Yung sa tourism ang problema kaya kailangan mabuksan 'yung tourism at the proper time with health considerations," he said.

(The tourism sector is the problem that's why we need to open them at the proper time with health considerations.)

• 1 in 4 MSMEs closed due to COVID-19 pandemic: trade chief

Several tourism establishments were forced to shut down anew after the Philippines reimposed its strictest lockdown in the capital region and nearby provinces last month due to a spike in new COVID-19 cases.

The government is expected to announce new quarantine restrictions by the end of the month.

Watch more in iWantv or TFC.tv