Guarantees for P4.4 billion loans for MSMEs under study

MANILA, Philippines — Government-run Philippine Guarantee Corp. (Philguarantee) aims to guarantee P4.4 billion worth of loans extended to micro, small and medium enterprises (MSMEs) as the sector continues to recover from the impact of the pandemic.

Philguarantee president and CEO Alberto Pascual said the agency’s MSME Credit Guarantee Program (MCGP) registered a remarkable performance, with financing assistance reaching P2.95 billion as of March 10.

This is 14 times the initial portfolio of P207 million since the pilot implementation of the program in December 2020. It also benefited 20,310 entrepreneurs during the review period.

The financing assistance through the agency’s credit guarantee facilities is expected to benefit an additional 8,800 enterprises.

A total of P1.48 billion of the releases were supported by the Philguarantee’s credit guarantee facilities to such groups.

“The growth in the MSME credit guarantee portfolio, with the support of 18 banks in the country, represented more than 13 times or 1,325 percent since December 2020, and this was impacted further by Philguarantee in the implementation of its key assistance role,” Pascual said.

Pascual said it registered a 589 percent increase for MSME beneficiaries compared to the initial level of 2,948 in December 2020.

Finance Secretary Carlos Dominguez said the sizable increase in Philguarantee’s financing assistance to MSMEs at the height of the COVID outbreak underlines the administration’s commitment to rescue small entrepreneurs hardest hit by the global downturn and ensure their swift and strong recovery from the pandemic.

“The quick recovery of MSMEs from the global health and economic crises is crucial to the country’s strong rebound at the soonest, considering that they  make up 99 percent of all business enterprises and account for nearly 36 percent of the domestic economy,” Dominguez, who also chairs the Philguarantee Governing Board, said.

The biggest beneficiaries of the credit guarantee facilities were the wholesale and retail sector (P1.95 billion), followed by manufacturing (P230.54 million), transport, storage and communication (P172.64 million), community, social and other establishments (P140.68 million), agriculture and forestry ( P130.36 million), as well as hotels and tourism-related services with P114.53 million.

As Philguarantee’s credit guarantee programs cater to a nationwide reach, Regions IV-A (Calabarzon), III (Central Luzon), I (Ilocos) V (Bicol), and X (Northern Mindanao) comprise the major areas supported by the credit guarantee facilities, with P1.66 billion in cumulative releases since December 2020.

MSMEs, belonging to the National Capital Region (NCR), obtained a total of P207.65 million in working capital assistance extended by banks, with the support of the agency’s credit guarantee franchise.

In terms of number of MSME beneficiaries, Pascual said more than 75 percent or 15,308 of the total enterprises are those in the wholesale and retail industry, while the remainder are from the manufacturing (1,685), transport (170) , other communities (1,051) , agriculture and forestry (271), as well as hotels and restaurants (1,096).

Since the start of the MCGP at the height of the pandemic, the Philguarantee Governing Board has approved a total of P37.7 billion in credit guarantee facilities to 34 banks.