Monday, 7 September 2020

RMCO Extended But The Loan Moratorium...?



The RMCO has been extended to end December 2020 but is this necessary and how about the loan moratorium?


The Covid-19 numbers are below 15 for last 60 days. The borders are closed and we have 14-day quarantine for those returning Malaysians or permanent residents. The economy is impacted with closed borders. In addition, loan moratorium and wage subsidies will end by 30 September.

What is required? If RMCO is extended as a precautionary measure to avoid a possible spike or second wave, then please provide a further 6 months of moratorium on bank loans and an additional injection of RM35-RM40 billion for supporting jobs, SMEs, hotels and tour related sectors.

Surely, the PM is aware of the consequences of extending the RMCO without any attendant financial support. More than 41% of Malaysian manufacturers had said their businesses would be sustainable for less than 12 months. Why?  With Covid-19 lockdown, there is a complete loss of revenue. No amount of cost-cutting can save a business unless everyone is on furlough and rent is suspended. Unemployment will spike from 4.9% in June and bankruptcies will rise even if banks are willing to reschedule.

Urgent economic measures are needed to pull Malaysia out of this quagmire. Where is the Minister of Finance in all of this, besides “politicking” with his 101 projects? The Malaysian economy recorded a contraction of 17.1% (Q2), the worst economic performance in ASEAN. Pray move quickly, and not wait for next year!

References:
1. Think-tank questions Malaysia’s move to extend RMCO, with cases under control, FMT Reporters, August 29, 2020 (www.freemalaysiatoday.com)
2. Extending the RMCO without extending the moratorium on bank loans by another 6 months and an additional RM45 billion to the Covid-19 Fund will adversely affect efforts to save Malaysian jobs, SMEs and now manufacturers, Lim Guan Eng, August 29, 2020 (www.dapmalaysia.org)

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