DTI order deterring businesses from reopening?

A major concern now is how to restart the stalled economy.

However, the Department of Trade and Industry’s Memorandum Circular (MC) 20-04 issued last April may be deterring some non-mall micro, small and medium enterprises (MSMEs) from going back to business.

Said DTI MC mandates a deferment on the collection of commercial rentals during the enhanced community quarantine (ECQ) period. The uncollected rentals are to be paid at the end of the lockdown through one-time payment or six monthly payments.

In contrast, most mall owners have publicly announced a total waiver of their rental income during the ECQ period. It was a fair and just move. Otherwise, lessees would be inflicted with the double whammy of business closure and pileup of unpaid rentals, while landlords’ rental income would remain intact, except that its receipt will be delayed.

Because of the DTI MC, there may be MSMEs like restaurants not housed in mall establishments that are now deterred from reopening since they will be confronted with a billing for two and a half months of unpaid rentals even before they have earned a single centavo from their resumed business operations. It cannot also be expected that in six months’ time, such billing can be settled given these business challenges:

• reduced seating capacity to comply with the mandatory social distancing
• people’s continued fear of contamination
• additional expenses for safeguarding the health of workers and customers

Also, the application of the pre-ECQ rental rate during the ensuing operations is a deterrence to reopen. (To be fair, the DTI MC has an exhortation for a rental waiver. However, such exhortation can just be ignored just like in our particular case.)

It may interest the DTI to know that, from what we gathered from some MSMEs, aside from the rental waiver, mall owners suspended the application of the pre-ECQ rental rate to encourage reopening. Instead, a certain percentage of revenue is now being implemented. Maybe this is the “new normal” that the DTI should promote for MSMEs that are still navigating their way to normalcy.

CARLOS C. TAN
[email protected]