At the onset, the Bayanihan To Heal As One Act (R.A. No.

11469) or Bayanihan 1 and

Bayanihan To Recover As One Act (R.A. No. 11494) or Bayanihan 2 provides a 30-day
grace period for the payment of utility bills and residential and commercial rent in areas
covered by ECQ and MECQ where no fees, interest, or penalties will be applied within
the period. Initially, this concession only applies to micro, small and medium
enterprises (MSME’s) and sectors not permitted to operate during the said community
quarantines.

Anent thereto, may it well be noted that the rent is not waived but only postponed and
the same must be paid after the grace period. In other words, there is no freeze in rental
during the

Moreover, in the spirit of goodwill, generosity and fair play, a Memorandum Circular
No. 20-31, series of 2020 was issued by the Department of Trade and Industry (DTI)
which explicitly enjoins lessors of commercial spaces rented out to affected MSME’s and
sectors not permitted to operate during the said community quarantines to adopt any of
the following:

(1) totally or partially waive the commercial rents that are falling due during the
ECQ, MECQ, and GCQ;
(2) grant reprieve or a reduction in the amount of rent due in the months
following the ECQ, MECQ, and GCQ
(3) open for renegotiation the lease term agreements with the lessees; and
(4) use other recourse to mitigate the impact of the ECQ, MECQ and GCQ to the
MSMEs.

While it is not mandated, the government is encouraging all lessors of MSMEs extend
generosity by totally or partially waiving rent, granting discounts, opening renegotiation of the
terms of the lease, or any other recourse that would mitigate the impact of the crisis to these
business establishments.

However, in light of the foregoing, the herein undersigned suggest that the requester
must signify her request for assistance to her lessor, Robinsons…., for the rent deferral.

MSMEs have to signify their request for assistance to their respective lessors to be eligible for the
rent deferral. They shall submit supporting documents, such as, but not limited to, financial
statements and cash flow projections, which shall then be the basis of the lessor in considering
the liquidity and capacity to pay as they negotiate the assistance they can provide. The
accumulated rent shall also be amortized in the next six (6) months following the end of grace
period, to be added to rent due on those months.
 

The DTI continued to ask lessors to consider waiving or offering discounts for commercial rent or
renegotiating lease term agreements for micro, small, and medium-sized enterprises.

“Enjoining lessors to still extend support like concessional rents or discount on months after the
lifting of GCQ, since market demand may start weak,” Mr. Lopez said.

Lessors are not obligated to refund rent payments made during the lockdown

The Amended Supplemental Guidelines should have clarified that the phrase “not permitted to
operate” refers to other “sectors”. MSMEs, even if allowed to operate, are entitled to the 30-day
grace period.

PAYMENT OF RENT AFTER 30-DAY GRACE PERIOD

Cumulative amount of rents falling due within any of the covered community quarantine, shall be
equally amortized in the six (6) months following the end of the 30-day minimum grace period,
without interest, penalties, fees, and charges, which amount shall be added to the monthly rent.
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.

Commercial
MC 20-12 provides the guidelines on the concession of commercial rent, which, similar to
residential, mandates a minimum of 30-day grace period without incurring penalties. This
would cover rentals of land, offices, buildings, centers, shops, facilities, and any other property
used principally for commercial purposes, which means that the main purpose of the activities
held in the said property is to profit. Initially, this concession only applies to micro, small and
medium enterprises (MSMEs), but MC 20-31 expanded this to cover sectors not permitted to
operate during the ECQ, MECQ, and GCQ.
Under RA No. 6977, as amended by RA No. 9501, MSMEs are any business activity or
enterprise whose total assets, inclusive of those arising from loans but exclusive of the land on
which the particular business entity’s office, plant and equipment are situated, must have value
falling under the following: a) micro – not more than P3,000,000; b) small – P3,000,001 to
P15,000,000; c) medium – P15,000,001 to P100,000,000. 
Unlike residential tenants, MSMEs have to signify their request for assistance to their respective
lessors to be eligible for the rent deferral. They shall submit supporting documents, such as, but
not limited to, financial statements and cash flow projections, which shall then be the basis of
the lessor in considering the liquidity and capacity to pay as they negotiate the assistance they
can provide. The accumulated rent shall also be amortized in the next six (6) months following
the end of grace period, to be added to rent due on those months.
 
Duties of the lessor
The lessor is obligated to grant a minimum of 30-day grace period from the due date of the
residential or commercial rent or from the lifting of the ECQ, MECQ, and GCQ, whichever
comes later, without incurring interests, penalties, fees, and other charges. However, they do
not need to return the rent already paid during the community quarantine. Moreover,
providing a grace period for the payment shall not affect the existing agreement to waive the
rent.
Sec. 7 of MC No. 20-12 also provides that no eviction due to pay rent may be enforced within
the thirty (30)-day period following the lifting of community quarantine.  While it is not
mandated, it is encouraged that the lessors of MSMEs extend generosity by totally or partially
waiving rent, granting discounts, opening renegotiation of the terms of the lease, or any other
recourse that would mitigate the impact of the crisis to these business establishments.