KUALA LUMPUR (July 13): The Malaysian Association of Tour and Travel Agents (MATTA) has urged the government and Bank Negara Malaysia (BNM) to extend the bank loan-repayment moratorium by another six months for the tourism industry because the sector is the hardest hit by the Covid-19 outbreak and studies indicate that it will recover much slower from the crisis than other local industries.
In a statement today, MATTA president Datuk Tan Kok Liang said the tourism industry urges the government to take proactive actions to intervene rather than leave the decision to the various private banks, which will make decisions based on their terms of industry risk assessment and aim of maximising shareholders wealth.
“The government, together with BNM, must step in. It is hoped that the government and relevant bodies will make it a priority and look into these crucial requests to assure progress in the recovery of Malaysia’s travel and tourism industry,” Tan said.
“The industry’s inability to service their loans [is] due to regulatory constraints and weak demand. As many tourism businesses derive a large portion of their earnings from international tourists, how are they to survive if borders stay closed? With no firm direction from the government on the easing of borders, it is only appropriate to request that the government initiate and order an extension of the moratorium rather than industry players seeking an extension from their respective banks on their own which will likely be turned down especially after the prime minister (Tan Sri Muhyiddin Yassin) made an announcement that the industry could take four years to recover.
“Individual borrowers working in the hospitality and tourism industry should also be given a six-month moratorium extension as many are currently on pay cuts, unpaid leave or have been retrenched. Many do not have the ability to repay their loans under current pressing circumstances and the rate of unemployment is rapidly increasing,” he said.
BNM had in March 2020 announced a six-month loan-repayment moratorium starting April 1, 2020 to help individuals and businesses affected by the Covid-19 pandemic, which had led the Malaysian government to implement the movement control order (MCO).
Malaysia’s MCO, which was initially scheduled between March 18 and 31, 2020, requires non-essential businesses to stop operations, while the public was ordered to stay at home to curb the Covid-19 outbreak.
On March 25, Muhyiddin said the government decided to extend the MCO until April 14, because updates from the National Security Council and the Health Ministry indicated an increase in Covid-19 cases.
On April 10, Muhyiddin said the government was extending the MCO until April 28.
On April 23, Muhyiddin said the MCO would be extended for another two weeks until May 12.
On May 4, news reports, quoting Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob, indicated that regulations under phase four of the MCO were null and void with the commencement of the conditional movement control order (CMCO) or phase five of the MCO.
On May 10, Muhyiddin said the CMCO would be extended to June 9.
On June 7, Muhyiddin said the CMCO scheduled to expire on June 9 will be replaced with the recovery movement control order (RMCO) beginning June 10 until Aug 31.