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Construction sector under COVID-19

Effective June 1, 2020, Cebu City will be placed under MECQ (from ECQ) while the rest of the province of Cebu will be on GCQ

May 28, 2020 · 4 min read

Cebu City will be placed under Modified Enhanced Community Quarantine while the rest of the province of Cebu will be under General Community Quarantine starting June 1, 2020 according to the Inter-Agency Task Force Resolution No. 40. How are small and medium enterprises (SMEs) thriving under COVID-19 pandemic and going forward along with the 'new normal'?

(c) Philippine Constructors Association, Harmonizing our Restart: Building as One Nation

Construction Sector

The construction sector has undeniably strong contribution to the Philippine economy by sharing a large chunk of job generation across the country's labor-intensive sector. However, COVID-19 has proven to be a great enemy to communities where social interaction is required. Take the construction sites as an example. SMEs are among those who are heavily affected by the temporary closures of several construction sites and consequently, more families suffer from income loss brought by the closures.

At HD, most of the construction workers come from the low-income bracket and only depend on their weekly pay (and mid-week cash advances). Without extra contingencies nor alkansya at their disposal, the question now lies where to get food to put on the table. Despite our company's initiative to provide extra allowances, offer 'COVID-19 Loans' without interest, and apply for DOLE-CAMP and SBWS Program, workers would normally say that these payouts would not be enough for their family. As the community quarantine progresses, more issues would arise on the community level if not addressed further.

Small and medium contractors

With the implementation of community quarantine guidelines, naturally, inter-municipality/city borders are already strengthened by respective LGU's and the provincial officials, so getting vehicle passes has become extremely difficult, if not impossible. Material delivery, manpower commute, project supervision, and project baselines, are affected by these regulations. Business loan repayments and expenses begin to pile up and project deliveries are also expected to be delayed. Poor project cash flows, capitalization issues, and supply chain concerns, all converge as a great challenge to business survival in times of crisis.

Bright light ahead

The government (particularly DTI and its attached agencies) has offered several programs helping SMEs thrive in this pandemic, as SMEs like us, also has to contribute to meet the Heal-as-One motto of the government.

DTI Memorandum Circular 20-12: Guidelines on the Concessions on Residential Rents; Commercial Rents of MSMEs.

Our building landlord has not sent the rent and utilities bill for 3 months. Looks like they are pretty compliant with this MC!

COVID 19 Pondo sa Pagbabago at Pag-asenso Enterprise Rehabilitation Fund (P3-ERF)

This is a One Billion Peso (PhP1,000,000,000.00) special financing program by the Small Business Corporation (SBCorp) of the Department of Trade in Industry (DTI) for MSMEs affected by COVID-19. A financing program is also established by SB Corporation for micro enterprises with an asset not exceeding Three Million Pesos (PhP 3,000,000.00) at not more than 2.5 percent per month all-in interest rate and service charges.

From last week's webinar with SBCorp's representatives, for lower loan amounts, documentary requirements are minimal, but higher than Php500,000 would entail more requirements (and probably difficult approval).

Landbank I-RESCUE Lending Program

The I-RESCUE Lending Program is LANDBANK’s support program for the SMEs, cooperatives, and microfinance institutions (MFIs) which are affected by the economic impact of the CoVid-19 pandemic to the country. The program will provide interim measures to help SMEs, co-ops and MFIs through provision of additional funds and by loan restructuring under more flexible terms and conditions. I-RESCUE supports RA 11469, also known as the “Bayanihan to Heal as One Act.”

a) Availability Period: up to December 31, 2020

b) Program Fund: Php10 Billion Initial Internal Fund

c) Types of Credit Assistance:

Rehabilitation Credit Programs for SMEs
Rehabilitation through Loan Restructuring

Along with these programs, the IATF has also allowed Construction Works under different quarantine classifications, following guidelines issued by the Department of Public Works and Highways (DPWH).

During ECQ

Essential projects, whether public or private, such as but not limited to quarantine facilities and isolation facilities for PUIs, PUMs, and suspect and confirmed COVID-19 patients
Facilities for the health sector workers, including those dealing with PUMs and suspect and confirmed COVID-19 patients
Facilities for construction personnel who perform emergency works, flood control, and other disaster risk reduction and rehabilitation works
Sewerage projects, water service facilities projects, and digital works
Priority public infrastructure projects
Priority private infrastructure projects defined as those that refer to food production, agriculture, fisheries, energy, housing, communication, water utilities, manufacturing, and business process outsourcing (BPO).

During MECQ

In addition to those allowed during ECQ, other essential and priority public and private constructions projects, excluding small-scale projects subject to compliance with the DPWH construction safety guidelines.
Small-scale projects are defined as those construction projects which are intended for private and personal use, and because of scale, would not be able to or would impractically be unable to comply with the herein Revised Construction Safety Guidelines in areas under ECQ, MECQ, GCQ, and MGCQ.

During GCQ or MGCQ

All public and private construction projects but with strict compliance to the DPWH guidelines.

Since Cebu City will be under MECQ, contractors will have to implement projects only covered and allowed by IATF. If you happen to have a small-scale project, your temporary closure would surely extend further until this is lifted towards GCQ.

The new scenarios following DPWH's construction safety guidelines for a project to commence operations also still pose a big question especially to small-time contractors: who will pay for these additional expenses?

Download

Inter-Agency Task Force for the Management of Emergency Infectious Diseases Resolution No. 40
For information on proper guidance on the DPWH Revised Construction Safety Guidelines for the Implementation of Infrastructure Projects During COVID-19 Public Health Crisis, view or download the document here DPWH DO. 39 Series of 2020.
The Omnibus Guidelines on the Implementation of Community Quarantine in the Philippines is downloadable here.