Rehabilitation financing for countrywide pandemic recovery
For state-owned Development Bank of the Philippines (DBP), the provision of rehabilitation financing is expected to be its vital role as various industries fueling the country’s economy endeavor to recover from the impact of the COVID-19 pandemic.
DBP president and chief executive officer Emmanuel G. Herbosa said the bank’s Rehabilitation Support Program on Severe Events (DBP RESPONSE) has begun to extend financing support for the rehabilitation efforts of both public and private institutions adversely affected by the pandemic.
“We have already approved new loans amounting to P400- million, for one local government unit (LGU), and two companies in the manufacturing industry, as they implement their crisis response and recovery plans,” DBP president and chief executive Emmanuel G. Herbosa.
Private institutions including enterprises, corporations, cooperatives, associations, schools, hospitals, and financial institutions are eligible borrowers under DBP RESPONSE. In addition to LGUs, government corporations such as water districts, state universities and colleges are likewise eligible to avail of the program.
Under the program, a longer repayment period of up to 15 years, inclusive of a three-year grace period, is granted to public borrowers and up to 10 years with a three-year grace period for private institutions.
Current DBP borrowers, on the other hand, may request for the deferment of collection of loan repayment of up to six months, with option for restructuring in case a borrower is not able to recover within six months.
“As of June 24, 2020, DBP has assisted 565 accounts that have requested for payment moratorium, with a total deferred amount of P17.729-billion,” Herbosa said. “The majority of these accounts are in the construction industry; wholesale and retail trade; transportation and storage; agriculture, forestry, and fishing; education; and the health sector. We are also assisting enterprises involved in the manufacturing, water supply, waste management, real estate, and accommodation and food services industries.”
Herbosa added that one borrower has been approved for the restructuring of its existing loan under the program.
The DBP RESPONSE also provides rehabilitation financing support to DBP and non-DBP borrowers stricken by calamities and/or force majeure events including typhoons, floods, drought, pest, and disease infestations, earthquakes, peace and order problems, and other similar events resulting to significant socio-economic damages.
“Through the DBP RESPONSE, we aim to provide a mechanism whereby the rehabilitation of businesses and socio-economic infrastructures are prioritized, and projects that have high community or regional development impact are likewise given premium,” Herbosa explained. “Given current developments, DBP remains steadfast in its commitment to help propel sustainable growth amid the expected economic contraction this year.”