Businesses Promised W100 Trillion Emergency Funding

The government decided on Tuesday to provide W100 trillion in emergency funding to businesses devastated by the coronavirus epidemic (US$1=W1,246).

The government doubled the amount from W50 trillion mooted last week, and expanded beneficiaries to include even large conglomerates.

President Moon Jae-in in an emergency economic policy meeting at Cheong Wa Dae vowed to do everything to "prevent corporate bankruptcies due to COVID-19."

He promised that "healthy and competitive businesses will not close down due to a liquidity crunch" in this unexpected crisis and pledged to include conglomerates in the scope of aid.

The government will expand loans and debt guarantees to businesses from W29.2 trillion to W58.3 trillion and make them available even to big businesses like airlines that have been hit hardest by the epidemic. But conglomerates will have to prove they have exhausted self-rescue measures before becoming eligible for government loans.

Also, the government will form a W20-trillion fund to buy bonds issued by distressed businesses. Investors increasingly shun corporate bonds, exacerbating businesses' cash crunch.

It also announced steps to stabilize the stock market, which has plunged 30 percent over the past month, by forming a W10.7-trillion fund that will be put to use starting early next month.

Business welcomed the government's measures but urged swift implementation and a minimum of bureaucratic holdups.