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PCCI asks banks, financial institutions for one-year loan extension
The country’s largest business group Philippine Chamber of Commerce and Industry (PCCI) is asking banks and other non-bank financial institutions for an extension of loan maturities to help businesses recuperate from the COVID-19 crisis.
In a statement, PCCI asked banks and non-banks that loans that due between March 16, 2020 to December 31, 2020 to be given an at least one-year extension of maturities “to help firms survive the lockdown and the suspension of business operation, which have been in effect for almost two months now.”
PCCI president Benedicto Yujuico said that PCCI members have growing concern on their “deteriorating cash positions and diminishing ability to avoid massive lay-offs” due to the implementation of the ECQ.
President Rodrigo Duterte has ordered the implementation of a modified enhanced community quarantine (ECQ)
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The modified ECQ will run from May 16 to 31. The ECQ was previously extended until May 15 in Metro Manila, Central Luzon (except Aurora), CALABARZON, Pangasinan, Benguet, Albay, Bacolod City, Iloilo province, Iloilo City, Cebu City, Cebu province, Zamboanga City and Davao City.
“The 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,” Yujuico said.
Appealing for the support of banks and non-banks, PCCI said that industries, micro, small, medium, and even large companies are straining to preserve their liquidity and cover even the most basic operating expenses.
"Creditor willingness to restructure loans maturing in 2020 will most certainly go a long way toward preserving employment, and averting permanent closure of many long-time clients and ‘partners’ of banks," Yujuico said.
"Without the support of Philippine banks and other NBFIs, many businesses will likely be forced to shut down,” he said. --Ted Cordero/KBK, GMA News