PCCI seeks rent relief for small retailers
The Philippine Chamber of Commerce and Industry, the largest umbrella of business organizations in the country, is appealing for the grant of relief for small stall or store lessees as many micro, small and medium enterprises (MSMEs) are hit by the COVID-19 crisis, according to a report by GMA News.
“Sales have plunged to their worst in decades. There has been a cascade of store closures and job losses,” PCCI president Benedicto Yujuico said.
“Persistence of low consumer confidence, and limited public transportation and mobility is making it difficult for enterprises to recoup their operational costs to be able to pay the rent on top of the utilities and their workers,” Yujuico said.
Likewise, the PCCI chief said most of the affected businesses are MSMEs, which account for about 99% of all businesses and 66% of total employment.
“While we understand all businesses are experiencing financial difficulties, for MSMEs, these difficulties could be insurmountable,” Yujuico said.
PCCI made an appeal to work out a strategy that will provide relief to tenants of malls and commercial buildings that will not negatively affect the capital expenditure of owners/lessors to be able to continue providing service to their tenants.
“Lessors can give lower rent in exchange for a percentage of sales of their MSME tenants until such time that the situation normalizes and the tenants are able to meet their contractual obligations (fix rental),” Yujuico said.
Also, he noted that supporting the needs of existing MSME tenants who can be viable again makes more sense than having vacant stalls or taking in new tenants and aspiring entrepreneurs who have not proven themselves.
PCCI has successfully appealed to government to prioritize MSME lenders in government-owned and controlled financing institutions such as the Small Business Corporation and the Philippine Guarantee Corporation.
Meanwhile, the Bangko Sentral ng Pilipinas has eased banking rules such as temporarily reducing the credit risk weights of loans granted to MSMEs and the assignment of lower risk weight for MSME exposures that are covered by guarantees to encourage lending to MSMEs.
PCCI however said more effort is needed to nurse MSMEs back to health and ensure that jobs are protected.
“To be effective in alleviating the difficulties of our small enterprises and to sustain their recovery in the medium and long terms, we need a whole of society approach. It is in this regard that we are appealing to mall owners and commercial building landlords under the Bayanihan spirit as embodied by the Bayanihan Act,” Yujuico said.
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