April 6, 2020
MANILA – The Department of Trade and Industry (DTI) released Memorandum Circular (MC) No. 20-12, Series of 2020 on 4 April 2020 granting a 30-day grace period for residential rent as well as a similar grace period for Micro, Small, and Medium Enterprises (MSMEs) with their commercial rent during the Enhanced Community Quarantine (ECQ) period.
“To provide economic relief to Filipinos and MSMEs during the COVID-19 public health emergency, DTI is implementing these guidelines to ensure their survival during the ECQ, as well as to help brace them afterwards,” said Trade Secretary Ramon Lopez.
Following Republic Act (RA) No. 11469, or the “Bayanihan to Heal as One Act,” DTI will enforce a 30-day grace period for commercial rents that fall within the duration of ECQ to give respite to MSMEs that have temporarily ceased operations. These enterprises will also not incur interest, penalties, fees, and other charges under the grace period. Similarly, DTI will ensure that a minimum of 30 days grace period shall be granted for residential rent that fall due within the ECQ under the same terms.
Under the MC, the grace period will be determined as 30 calendar days following the last due date of the rent during the ECQ. Cumulative amount of rents that need to be paid within the ECQ must be amortized equally in the six months following the end of the said period. This can be added to the rent owed for succeeding months without interest, penalties, fees, and charges.
On the other hand, lessors are not obligated to refund residential and commercial rents already paid by lessees during the ECQ. However, lessors must grant a minimum of a 30-day grace period from the next due date of residential and commercial rents without interests and other penalties as well.
Likewise, the MC calls on lessors of MSMEs to extend their generosity, if possible, the following: total or partial waiving of commercial rents due during the ECQ; granting a reprieve or discounted amount of commercial rents due after the ECQ; opening renegotiation of the Lease Term Agreements with lessees; and using other ways to mitigate the impact of the ECQ for MSMEs.
More importantly, the trade chief emphasized that there should be no eviction for failure to pay residential or commercial rent due within a 30-day period after the lifting of the ECQ.
“No Filipinos should lose their residence during the ECQ period. Moreover, the importance of MSMEs in jumpstarting our economy once the ECQ has been lifted cannot be understated,” Sec Lopez said.
“Through these measures, we ensure that our fellow Filipinos have a future after the ECQ with homes that they can live in and through jobs and employment provided by our MSMEs,” Sec. Lopez added.
Complaints of violations of the MC can be brought to DTI in person or electronically by emailing the agency, either through the Fair Trade and Enforcement Bureau (FTEB) through FTEB@dti.gov.ph or with the regional offices. Lessors who violate these guidelines will need to answer the Notices of Violations (NOVs) issued by DTI.
As provided under RA 11469, lessors that are found guilty of refusing to provide the 30-day grace period to lessees shall be penalized with imprisonment of not less than two months or a fine of not less than P10,000, or both.