MANILA, Philippines - The Department of Trade and Industry (DTI) is studying a proposal to provide loan guarantees to exporters.
Trade Undersecretary Ponciano Manalo, Jr. told reporters the DTI is currently looking into a proposal that would provide loan guarantees to exporting firms.
In particular, he said the DTI is studying a scheme wherein an exporter or business that has no collateral would have an option to pay a guarantee fee to a state-run guarantor such as the SB Corp. or Philippine Export-Import Credit Agency, to qualify for a loan.
The proposal is being looked into as access to capital remains to be among the challenges faced by exporting firms.
“Many of our exporters have no land (as collateral). How will they get money to expand? You give them loan guarantees so you can help them,” Manalo said.
He said that while the government is already providing support to exporters through organizing trade fairs and helping them participate in international events, access to capital is another area where it could help the sector.
Philippine Exporters Confederation, Inc. president Sergio Ortiz-Luis, Jr. said earlier that access to financing has been difficult particularly for micro, small and medium enterprises (MSMEs).
Even as RA 9501 or the Magna Carta for MSMEs mandates lending institutions to allocate a portion of their portfolio for the sector, these businesses still find it difficult to borrow for they are considered risky.
Ortiz-Luis said the group is seeking P2 billion worth of funding from the government to support exporters and help them become competitive.
“We need at least P2 billion if we really want to compete,” he said.
He said the fund would be needed for product development and promotion.
Apart from looking into proposals on how government can help exporters get access to financing, the DTI has relaunched the Export Assistance Network (Exponet), to provide assistance on all export-related matters including information on procedures, documentation and mediation of export trade-related complaints.
“This started in 1984 and is envisioned to be a one-stop shop for exporters and would-be exporters,” Manalo said.