DBP lending hits P15.8-B in first three months; SMEs get big chunk

The country’s so-called "backbone of the Philippine economy" or the small and medium enterprises (SME) continued its growth with the help of just financial institutions as the Development Bank of the Philippines (DBP).

State-run DBP released and approved new loans for SMEs in the first three months of the year equivalent to half of the amount it released the previous year.

As of end March, the DBP released approximately P15.815 billion or about a sixth of its total loan portfolio of P82.9 billion.

Of the total 7,598 individual borrowers in the past years 6,582 can be classified as SMEs and micro-borrowers.

Last year, roughly 91 percent of the 6,372 projects or 5,776 projects were approved for those classified as SMEs. That amounts to P31.8 billion or 32 percent of the total loan releases in that period.

It was able to extend another P400 million for micro-enterprises.

DBP president and chief executive officer Simon R. Paterno said that there would not be any let-up in meeting the challenge of providing funds to fuel the backbone of the Philippine economy.

"For this year, the DBP will influence lending directions towards strategic sectors, specifically infrastructure, environment and SMEs. We are also actively embarking on an outreach program to tap qualified thrift and rural banks to be microfinance and SME conduits," Paterno said.

The government financial institution has been able to tap huge and reliable sources of funds, and a wide array of conduits.

Funding sources, which normally account for 80 percent of the total portfolio sources, are the Japan Bank for International Cooperation (JBIC), the World Bank, the Japan Export-Import Bank, the Kreditanstalt fur Wiederaufbau Credit Line for Small and Medium Enterprises (KfW-CLSME), the Asian Development Bank (ADB), and the local sources including the Social Security System (SSS) and the Government Service and Insurance System (GSIS).

In terms of conduits or institutions that would re-lend to the SMEs or microenterprises, DBP reached 147 accredited financial institutions or 29 commercial banks, seven foreign banks, 24 non-bank financial intermediaries, 18 private development banks, 47 rural banks, 21 savings and mortgage banks, and the Land Bank of the Philippines (LBP), another government financial institution which emphasizes its lending activities towards the rural and agriculture areas.

Among the sectors that have availed of the loans are: agriculture, hunting and forestry; mining and quarrying; manufacturing; construction; wholesale and retail trade; hotels and restaurants; transport, storage and communication; financial intermediation; education; electricity; gas and water supply; real estate, renting and business activities; public administration and defense; health and social work; community, social and personal sector activities; private households; and extra-territorial organization. – TPT