A LAWMAKER has proposed suspending interest charges on government loans for three months starting January 2027 to help small businesses, online sellers and workers cope with the expected economic impact of a potentially severe El Niño phenomenon.
The proposed relief, covering January to March, would give borrowers more financial flexibility as prolonged dry conditions threaten to raise food prices, electricity costs and other household expenses.
“It would greatly help affected sectors if the government temporarily stopped charging interest on their loans until conditions return to normal,” Senator Bam Aquino said in a news release.
He identified the Small Business Corp. (SB Corp.), Social Security System, Government Service Insurance System and Home Development Mutual Fund as institutions that could extend temporary relief to qualified borrowers.
Aquino, chair of the Senate Committee on Trade, Commerce and Entrepreneurship, said the measure would help micro, small and medium enterprises preserve working capital, sustain operations and protect jobs amid rising costs. Workers and middle-income families could also redirect savings from loan payments to food, utilities and other necessities.
The Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has warned that El Niño could intensify into a very strong event before the end of 2026 and persist through the first half of 2027.
In its Sept. 23 advisory, Pagasa warned of below-normal rainfall, dry spells and drought that could affect agricultural production and water availability. Cebu and Bohol are among the provinces that could experience drought by March 2027 if dry conditions persist.
SB Corp. offers financing programs with interest rates ranging from 8 percent to 12 percent annually, while some facilities charge one percent monthly on diminishing balances. Certain business expansion and rehabilitation loans already provide interest-free periods during their first year.
Aquino also urged Senate President Sherwin Gatchalian to reconvene the Senate’s Proactive Response and Oversight for Timely and Effective Crisis Strategy Committee to coordinate preparations for El Niño.
Created under Senate Resolution No. 45 on March 18, the panel initially examined measures to address the economic and energy-related effects of the Middle East conflict.
Aquino said the committee should now focus on protecting agriculture, food security, education, public health, livelihoods and essential services, while shielding households and businesses from the economic fallout of drought. / PNA