Trade and Industry Secretary Ramon Lopez on Tuesday clarified anew that the 30-day grace period in payments for residential and commercial rents remains, and still applies to micro, small, and medium enterprises (MSMEs) prohibited from operating during the enhanced community quarantine (ECQ).

The trade and industry department issued Memorandum Circular (MC) No. 20-31, s. 2020 on June 4, which explains that the grace period on rents are covered under ECQ, modified ECQ (MECQ) and general community quarantine (GCQ).

Lessors of commercial spaces were also encouraged to adopt any of the following “in the spirit of goodwill, generosity and fair play”:

  • 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.

“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.

He added that MSMEs employ 70 percent of the workforce and emphasized the need to ensure the survival of these businesses amid the Covid-19 pandemic.

The amended guidelines also provide the following:

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 stated above—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 community quarantines 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 residential and commercial rents can be accessed here. John Ezekiel J. Hirro