30-day Grace Period On Rents For MSMEs Applies To Areas Under ECQ, MECQ, GCQ

The 30-day grace period for residential and commercial rent payments still has not changed, and still applies to micro, small, and medium enterprises (MSMEs) not permitted to operate during the enhanced community quarantine (ECQ) as reiterated by Department of Trade and Industry Secretary Ramon Lopez.

This was followed by the issuance of DTI Memorandum Circular (MC) No. 20-31, series of 2020 on 4 June 2020, which clarified certain provisions in the earlier released supplemental guidelines of MC 20-12, particularly that the grace period on rents are covered under the ECQ, the modified ECQ (MECQ), and the general community quarantine (GCQ).

“As we slowly transition to the new normal, we need to ensure the survival of businesses during these difficult times and in the months beyond the lifting of the quarantine,” Lopez said in a
statement Sunday.

In the spirit of goodwill, generosity, and fair play, lessors of commercial spaces are also enjoined in the new MC to adopt any of the following: totally or partially waive the commercial rents that are falling due during the ECQ, MECQ, and GCQ; grant reprieve or a reduction in the amount of rent due in the months following the ECQ, MECQ, and GCQ; open for renegotiation the lease term agreements with the lessees; and use other recourse to mitigate the impact of the ECQ, MECQ and GCQ to the MSMEs.

The trade chief further reiterated his call to all lessors to continue to support and provide relief to MSMEs in anticipation of the slow restarting of the economy.

He added MSMEs currently employ 70 percent of the workforce and emphasized the need to ensure the survival of these businesses during the crisis, as well as protect the jobs it has created for millions of Filipinos.

“These guidelines will help our countrymen in the wake of the restrictions imposed during the community
quarantines (CQ) that have severely affected businesses, especially MSMEs,” Lopez added.

According to the guidelines, the grant by the lessor of a minimum 30-day grace period for residential rent shall commence from the last due date or from the lifting of the ECQ, MECQ, and GCQ, whichever is longer.

For commercial rents falling due upon MSMEs and sectors not permitted to operate during the ECQ, MECQ, and GCQ, the minimum 30-day grace period shall likewise be from the last due date or from
the lifting of the ECQ, MECQ and GCQ, whichever is longer.

Tenants also have the option to pay the cumulative amount of residential and commercial rents that fall due within ECQ, MECQ, and GCQ in installments equally amortized in six months following the end of the 30-day minimum grace period.

All unpaid rents during the CQs shall not incur interests, penalties, fees, and other charges.

No eviction for failure to pay the residential or commercial rent may be enforced during the quarantine
period.

However, lessors are not obliged to refund residential and commercial rents paid by the lessees before or during the period of the community quarantine.

The complete amended supplemental guidelines on the concession of residential and commercial rents can be accessed here