Briefing reporters after the Cabinet meeting yesterday, deputy presidential spokesman Ricardo Saludo cited official estimates by government economic planners that it takes only P50,000 capital per SME to create one new job compared to P1 million investments by large companies.
"And the thinking is, if these SMEs could grow to a point that they hire two people every year, that is 1.6 million new jobs created right there," Saludo said.
"The President and the Cabinet, of course, are very concerned that we are able to get our economy revving up and in particular creating jobs, the SMEs program has been quite successful in that," Saludo pointed out.
The National Statistics Office (NSO) earlier reported that preliminary results of its survey show the number of jobless Filipinos has reached as much as five million as of April this year despite President Arroyo’s claims during the campaign period that her administration has been able to create as much as 1.2 million new jobs each year for the past two years.
President Arroyo has vowed to create six million new jobs within the next six years in office and included in her six-point campaign the promise to triple the lending assistance to SMEs as among the specific programs she would pursue to meet this target.
Based on official figures, Saludo noted, there are as many as 808,000 SMEs all over the country.
At the Cabinet meeting it was reported that as much as P214.8 billion in loans have been extended to SMEs by the private banking sector last year.
"And the target will be to triple that which would be about P644.4 billion," Saludo cited.
Under the Sulong Program for SMEs implemented last year by the Department of Trade and Industry (DTI), the GFIs and other state-lenders provided P26.7 billion to the SMEs last year.
Saludo said President Arroyo has instructed the Small Business Guarantee Corp., a DTI-attached agency, to draft an executive order that would formalize the Sulong Program as an institutional lending mechanism at the DTI.
Another measure is to push for the creation of an SME Credit Bureau to help share and facilitate credit information for use of lenders and that would also be able to facilitate lending to the SMEs, Saludo added.
He said the state-owned Development Bank of the Philippines (DBP) would launch its Market Four (M-4) SME Receivables/Purchasers Program, an electronic market where securitized receivables (usually the commercial invoices used by SMEs) can be rediscounted for cash in market rates and bidded by players in the market.
"This is intended to speed up the liquidation of receivables held by SMEs. It would also facilitate the rediscount rate that are actually at prime rate," he explained.