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Loan Programs to MSMEs Affected by COVID-19 in the Philippines

Loan Programs to MSMEs Affected by COVID-19 in the Philippines

The economy is on a downhill ever since the virus hit the world by storm. Experts say we can face the worst economic crisis after the Great Depression, even worse than the Asian Financial Crisis in 1997 and The Great Recession in 2008. 

Small businesses are badly hit by the pandemic. Most of them are not operational because of the Enhanced Community Quarantine (ECQ). They are struggling to keep their businesses going and are living through their emergency fund. But it wouldn’t last forever. There will come a time they will cut down salaries to save costs. But if the situation comes to the ultimate worst, they will close down the business. 

These Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the Philippine economy. These comprise 99.52% or 998,342 of the 1,003,111 business enterprises operating in the country. 

That is why government organizations and financial institutions are taking the step to help these businesses through sound loan programs. 

If you are one of the MSMEs affected by the pandemic, here are some of the loan programs that will help cushion the impact of COVID-19 in your business. 

P3-ERF (Pondo sa Pagbabago at Pag-asenso) 

The P3-ERF facility of the Department of Trade and Industry (DTI) is part of the economic relief program of the Duterte administration for small businesses. DTI’s financing arm, Small Business Corporation, will grant access to the loan fund to micro and small enterprises continuously operating for at least one year prior to March 2020 whose businesses suffered “drastic reduction in sales.”

Micro enterprises (with asset size of not more than P3 million) can avail of PHP10,000 to PHP200,000 in loan with payment terms of up to 12 months and 24 months. Small enterprises (with asset size of not more than P10 million) can get a loan of PHP200,000 to PHP500,000 with terms of up to 24 months.

The loans will come with the following conditions: they should be used to update loan amortizations for vehicle or other fixed asset loans, replace inventory for perishable stocks, and replace working capital to restart the business.

The interest rate will be 0.5 percent per month on a discounted basis and a grace period will be given “until such time that the economic crisis has abated.”

For more information, interested borrowers may call SB Corporation’s hotline at 8651-3333 or send an email at

RESPONSE (Rehabilitation Support Program on Severe Events)

State-owned bank Development Bank of the Philippines (DBP) offers RESPONSE which provides rehabilitation financing support to DBP and non-DBP borrowers, both public and private institutions adversely affected by calamities, such as the COVID-19 pandemic. 

The program provides a longer repayment period of up to 15 years inclusive of a three-year grace period, as well as concessional rates.

Prospective borrowers must propose a project that will have a “developmental impact on the affected communities that they serve.”

Applicants may coordinate with any DBP lending center near their area to know more about the program or access the bank website at

I-RESCUE (Interim REhabilitation Support to Cushion Unfavorably-affected Enterprises by COVID 19)

Land Bank of the Philippines launched a new lending program dubbed as I-RESCUE to provide additional funding for SMEs, microfinance institutions, and cooperatives impacted by the pandemic. 

SMEs, MFIs, and cooperatives may borrow up to 85 percent of their actual need for working capital, at an affordable interest rate of 5 percent per annum, payable up to a maximum of five years.

The program also offers restructuring of existing loans via additional loans, extended repayment period, or through other means (or combination of means).

The loan may be extended up to a maximum of 10 years, with up to three years grace period on the principal and up to one-year grace period on interest, depending on cash flow.

Interested applicants may contact the nearest Land Bank Lending Center or Branch nationwide, or call Land Bank’s customer service hotline at (02) 8-405-7000 or at PLDT Domestic Toll-Free 1-800-10-405-7000. 

Loan Programs to MSMEs Affected by COVID-19 in the Philippines

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