Rental discounts for MSME lessees urged

July 30, 2020

As President Duterte asked lessors of commercial spaces to come up with amenable arrangements with their tenants, Trade and Industry Sec. Ramon Lopez has cited ways to give rental discounts to micro, small and medium enterprise lessees amid the pandemic.
Lopez said landlords may adopt the arrangement implemented by a big mall operator for their lessees, which is waiving the fixed rental fee and only getting a percentage of the lessee’s sales as rental payment.

For instance, the arrangement before the pandemic was that lessors charged a tenant for commercial space rental at a fixed rate of P100,000 plus eight percent of the tenant’s sales. 

Now that businesses are struggling to survive amid the pandemic, lessors no longer collect the P100,000 fixed rental fee while reducing the eight-percent share in sales to five percent.

“We can really only enjoin, the government can only enjoin. We can’t mandate the lessors because it’s a private transaction,” the trade chief said, adding the government will leave it to lessors how much rent discount they can provide to their tenants.

Lopez further said helping MSMEs to thrive amid the pandemic is the key to revive the economy.

“Let’s help MSMEs to recover for them to save jobs. If they save their workers’ jobs, we will see the demand because they (workers) are confident that they will get (a) salary which they will spend and stimulate the demand, the economy, and then companies will start to produce,” he added.

During his fifth State-of-the-Nation Address, the President urged lessors of commercial spaces not to drive away their MSME tenants as they struggle to survive amid the coronavirus disease 2019 pandemic.

“This is not the time to drive away lessees. During normal times, they were the primary source of your income stream. Now is the time to be fair and compassionate; come up with an amenable arrangement with your tenants,” he said.