Gov't Extends Loan Deadlines, Offers Low-Interest Loans For Small Businesses After Quarantine

Gov't Extends Loan Deadlines, Offers Low-Interest Loans For Small Businesses After Quarantine

The Philippine government has recently passed Republic Act (RA) No. 11469 or the Bayanihan To Heal As One Act, also known as the Bayanihan Law, to address the challenges brought by the COVID-19 pandemic. One of the provisions of the law grants borrowers a 30-day grace period for the loans that are due within the duration of the Enhanced Community Quarantine (ECQ). Key highlights of the Implementing Rules and Regulations (IRR) issued by  the Department of Finance (DOF) are as follows: 


  • The mandatory 30-day grace period applies to each of multiple loans with principals and/or interest due within the ECQ period. 

  • Covered institutions are not allowed to require clients to waive the application of the mandatory 30-day grace period. 

  • Borrowers who wish to pay their dues within the ECQ period may still do so. 

  • Lenders are asked not to apply  interest on charges during the 30-day period. Borrowers may then pay the accrued interest on a staggered basis over the remaining life of the loan.  


Section 3.02. All Covered Institutions shall not charge or apply interest on interest, fees, and charges during the 30-day grace period to future payments/amortizations of the individuals, households, micro, small, and medium enterprises (MSMEs), and corporate borrowers. 


This provision covers all lenders such as banks, loan associations, credit card issuers, and pawnshops. This also includes other financial institutions granting credit under the supervision of the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Cooperative Development Authority, Government Service Insurance System , Social Security System and Pag-IBIG. 


Low-interest loans for small businessmen 


Under the same law, the government is offering small businesses low-interest loans to help them recover and boost their businesses following the impact of the quarantine period. 

Through the Department of Trade and Industry’s Pondo sa Pagbabago at Pag-asenso (P3) loan fund, micro and small enterprises can avail up to P200,000 while medium-sized firms can avail up to P500,000, said Trade Secretary Ramon Lopez


The loan comes with 0.5 percent monthly interest and is payable in 2 to 5 years. MSMEs can apply for this loan through DTI’s Negosyo Centers after the lockdown that is set to end on April 12.

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Gov't Extends Loan Deadlines, Offers Low-Interest Loans For Small Businesses After Quarantine
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