The fund, which was created to help small entrepreneurs start and operate their own retail gasoline stations, is pursuant to R.A. 8479 or the "Downstream Oil Industry Deregulation Act of 1998."
The oil Industry Deregulation Law, which aims to encourage competition in the retail petroleum industry, mandates the DOE to train new industry participants and existing petroleum dealers with the management skills needed for the establishment, operation and maintenance of retail gas stations. The program shall be supervised by the Technology and Livelihood Resource Center (TLRC) and the Technical Education and Skills Development Authority (TESDA).
Under the new law, P282 million from PAGCOR’s remittance of P300 million will be set aside for lending and financial assistance to local entrepreneurs.
PAGCOR Chairman Efraim C. Genuino said "PAGCOR is happy to contribute to a project that will bring countless benefits to Filipino consumers. I believe there are now 70 new oil firms since the law was passed in 1998. As the number of retailers increase and competition becomes more intense, prices for petroleum products should go down to reasonable levels. Service from gasoline stations will be upgraded and enhanced," he pointed out.
"Equally important, the training Filipinos will receive as a result of the fund will expand their horizons. Gasoline retailing, for example, will not be limited to big-time businessmen anymore but will be feasible to aspiring, small-scale entrepreneurs," Genuino said.
Under its agreement with the energy department, PAGCOR will remit P10 million each month, starting March 1, to a separate account of the DOE until the full amount has been paid. Ninety-four percent or P282 million will be used for loans; three percent or P9 million is for the implementation of the Act; two percent or P6 million will go to the training program; and one percent or P3 million will be set aside for administrative and operating expenses.
The first step in availing of the loan is to attend the training program handled by the TESDA and the TLRC. Training will include LPG retailing. Next, applicants are required to submit a feasibility study on the establishment of a gas station. Successful applicants will be entitled to short and medium-term loans with low interest rates to serve as capital for the establishment and operation of their gasoline stations.