The Aerospace Industries Association of the Philippines (AIAP) backed an earlier proposal to have a yearlong moratorium on loans, saying this would help cash-strapped companies during the pandemic.
In a letter dated Aug. 12, AIAP president Dennis Chan expressed his support for the Bayanihan to Recover As One Act, or the Bayanihan 2 bill, as he cited provisions that he hopes would be included in the final version of the measure.
The letter was addressed to Deputy Speaker Luis Raymund Villafuerte Jr. and Sen. Juan Edgardo Angara, as both chambers reconcile their versions of the Bayanihan 2 bill that would allot at least P140 billion to stimulate the economy.
The version passed by the House of Representatives included a one-year moratorium on loans. Other than this, AIAP also backed a provision that directed Small Business Corp. to expand its existing loan programs for micro, small and medium-sized enterprises.
“These two provisions will certainly help the sector in order for the industry to be given time for the market to return. Principals of loans extension of one year can alleviate a lot of cash flow problems most companies are facing now,” the letter read.
“There is a need for a clear understanding to implement this since most right now are in a critical situation. Other Asean (Association of Southeast Asian Nations) countries like Thailand has initiated a one-year extension of all loan principals,” it added. It remains to be seen, however, if lawmakers would still heed Chan’s appeal, especially since a compromise has already been made.
The chambers have reportedly agreed to limit the moratorium to 60 days, which is twice as long as what the Senate wanted, but far shorter than a year.
Bangko Sentral ng Pilipinas Gov. Benjamin Diokno, Finance Secretary Carlos Dominguez III, the Bankers Association of the Philippines, and the Management Association of the Philippines opposed the one-year proposal.
Chan also supported a section in the Bayanihan 2 bill under the House of Representatives that sought for a joint venture to incorporate a special holding company to assist strategically important companies affected by the COVID-19 pandemic to address solvency issues. INQ