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Steep rents for Covid-19-clobbered NLEX store tenants

I wanna take the future. I wanna win. And you don’t get there by being some “aw shucks” guy sap. There’s no place in business for people like that. Business is war. It’s dog eat dog, rat eat rat. If my competitor were drowning, I’d walk over and put a hose right in his mouth. Can you say the same? – The Founder

What is worse than being down on your knees, battered and bruised black and blue all over?

It’s getting whacked by greedy rent extractors.

Among the hardest hit by the 2019 coronavirus disease pandemic are micro, small, and medium enterprises which have been mercilessly walloped by months of community lockdown and other state-imposed restraints to commercial activities.

Unlike big corporations which continue to rake in profits, smaller establishments — including stores, restaurants, bakeries and service-based shops — have been forced to pare down operations or close and lay off workers.

Based on a Department of Trade and Induatry survey of 858,840 MSMEs nationwide, 56.4 percent or 484,488 MSMEs stopped their operations during the quarantine.

Some 116,695 MSMEs or 13.6 percent of the respondents said they operated at limited capacity during the lockdown period.

The rest were allowed to operate as they are part of essential industries under the Inter-Agency Task Force for the Management of Emerging Infectious Diseases guidelines.

In 2019, data from DTI shows that 64 percent of their MSMEs assisted by Negosyo Centers were women. Similarly, 64 percent of the 5.8 million individual members of the cooperatives are women.

A survey conducted by DTI from June 4-17 found that when community quarantines were imposed, 26 percent of over 2000 MSME respondents ceased operations, 52 percent went on partial operations, and only 22 percent remained in full operation.

Meanwhile, 91 percent reported a decline in sales and 74 percent reported a decline in the workforce.

If little is done to improve their situation, more of these businesses would suffer the same fate in the months ahead.

No less than President Duterte is pushing government efforts to boost he MSME sector.

“We must facilitate the country’s economic recovery. I call on Congress to fast-track the passage of proposed measures such as the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act. This immediately cuts the corporate income levy from the current 30 to 25 percent and give the government flexibility to grant a combination of fiscal and non-fiscal incentives, among others,” the President said in his State-of-the-Nation Address.

“We pump-primed the recovery and rehabilitation of MSMEs. The DTI, through the Small Business Corp., set up the P1-billion Covid-19 Assistance to Restart Enterprises or CARES Program to provide zero-interest loans for MSMEs affected by the pandemic,” Duterte added.

But medium and small business owners said their problems are not just confined to diminished sales or lack of customers.

Equally excruciating to smaller businesses, they say, are “inordinate and unreasonable” rents, interests, charges and other fees that siphon off what scant income they have.

An alarming, outrageous example is the predicament of tenants of the North Luzon Expressway Drive and Dine in Valenzuela City of the MVP Group of Companies.

These tenants, who operate beloved establishments like Macao Imperial Tea, Famous Belgian Waffle, Empanada Nation, and Chachago have been reportedly charged full rent by the NLEX Drive and Dine management even when sales have been cut down to merely 20 percent to 30 percent of their pre-pandemic levels.

In stark contrast, other tenants of gas stations in NLEX have been reportedly charged only five percent to 10 percent of their gross sales, instead of fixed rentals.

Why the disparity?

The same rent scheme has been also been applied by leading malls and commercial buildings nationwide for restaurants and retails stores in their properties.

Not surprisingly, the crippling rent scheme has reportedly forced at least two of NLEX Drive and Dine’s tenants to already close operations in order to prevent any further loss of income.

More of the tenants — who are not tycoons or taipans flush with cash but simple, middle-class entrepreneurs — are supposedly planning to do the same if such charges continue to be imposed.

That is why small business owners are pinning their hopes on the Bayanihan to Recover as One Act is signed by the President soon, since it would regulate charges that may be slapped business owners while the pandemic rages.

Under Section 4 of the measure, tenants, including businesses who have temporarily closed their operations, must be given a minimum of 30-day grace period before they are required to pay rent again.

The grace period would start from the end of the last enhanced community quarantine or modified enhanced community quarantine.

The Bayanihan 2 also mandates that all amounts — such as commercial rents — due within the quarantine period would have to be amortized in equal monthly installments until Dec. 31, 2020 without any interests, penalties, and other charges.

No increase in residential and commercial rents may also be imposed until the end of the year.

The Department of Trade and Industry should immediately closely monitor the rents and charges being imposed on medium and small businesses.

The DTI must exercise its power to implement guidelines that would ensure that residential and commercial rents are reasonable and fair for both parties.

If both government and private sector do not act with haste, more medium and small business owners like the tenants of the NLEX Drive and Dine would be forced to shut down.

Formerly bustling commercial areas would wilt and turn into virtual ghost towns while more Filipinos would be sent to the unemployment line.

Are we going to wait for things to worsen before we act?

Let’s all hope it’s not too late when we finally do.

Behold God’s glory and seek His mercy.

Pause and pray, people

Publication Source :    People's Journal