NextGen Day

MANILA, Philippines — In keeping with its main assistance function throughout the pandemic era that began in 2020, the state-owned Philippine Guarantee Corporation (PhilGuarantee) has reached roughly PHP3 billion in financing assistance to micro, small, and medium companies (MSMEs) through its credit guarantee facilities.

Since the trial deployment of the MSME Credit Guarantee Program (MCGP) in December 2020, with an initial portfolio of PHP207 million, PhilGuarantee president and chief executive officer Alberto Pascual stated the agency’s credit guarantee portfolio for MSMEs has performed admirably.

He noted that as of March 10, 2022, the MCGP’s cumulative releases totaled PHP2.950 billion, with MSME beneficiaries totaling 20,310 entrepreneurs.

The corporation’s credit guarantee facilities to such groups funded a total of PHP1.48 billion for these releases.

“With the cooperation of 18 banks in the country, the MSME credit guarantee portfolio has grown by more than 13 times, or 1,325 percent, since December 2020, and this has been influenced further by PhilGuarantee in the implementation of its critical assistance function,” Pascual added.

MSME beneficiaries increased by 589 percent from the original number of 2,948 in December 2020, he said.

“The significant increase in this state-run corporation’s financing assistance to MSMEs at the height of the Covid-19 (coronavirus disease 2019) outbreak underlines this administration’s commitment to rescue small entrepreneurs hardest hit by the global downturn and ensure their swift and strong recovery from the prolonged pandemic,” said Finance Secretary Carlos Dominguez III, who also chairs the PhilGuarantee Governing Board.

“Considering that MSMEs make up 99 percent of all commercial firms and account for almost 36 percent of the domestic economy,” Dominguez stated, “rapid recovery of MSMEs from global health and economic crises is important to the country’s strong comeback as soon as possible.”

The wholesale and retail sector (PHP1.95 billion), manufacturing (PHP230.54 million), transportation, storage, and communication (PHP172.64 million), community, social, and other establishments (PHP140.68 million), agriculture and forestry (PHP130.36 million), and hotels and tourism-related services (PHP130.36 million) are the top beneficiaries of the agency’s credit guarantee facilities (PHP114.53 million).

Because PhilGuarantee’s credit guarantee programs have a nationwide reach, the key areas supported by the credit guarantee facilities are Regions 4-A (Calabarzon), 3 (Central Luzon), 1 (Ilocos), 5 (Bicol), and 10 (Northern Mindanao), with a total release of PHP1.66 billion since December 2020.

With the help of the agency’s credit guarantee franchise, MSMEs in the National Capital Region (NCR) received a total of PHP207.65 million in working capital assistance from banks.

In terms of overall MSME beneficiaries, Pascual said that wholesale and retail businesses account for more than 75% (15,308) of the total, with manufacturing (1,685), transportation (170), other communities (1,051), agriculture and forestry (271), and hotels and restaurants accounting for the rest (1,096).

The PhilGuarantee Governing Board has issued a total of PHP37.7 billion in credit guarantee facilities to 34 banks since the MCGP began at the height of the epidemic in 2020.

Currently, 48 banks have approved facilities with PhilGuarantee, 18 of which are actively engaged financial institutions, and 28 of which have finalized guarantee agreement papers.

“The granting of the credit guarantee facilities permitted the availability and accessibility of loans from banks that would have otherwise been hesitant to lend to MSMEs because of the uncertainty that accompanied the commencement of the Covid-19 outbreak,” Pascual explained.

PhilGuarantee anticipates a PHP4.4 billion MSME portfolio in 2022, with an additional 8,800 beneficiary enterprises.

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