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PhilGuarantee expands credit support to MSMEs

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The Philippine Guarantee Corp. (PhilGuarantee) has broadened its support to micro, small and medium enterprises (MSMEs), manufacturing, housing, agriculture, and other key sectors of the economy to help keep businesses afloat amid the coronavirus pandemic, with over P655 billion in credit guarantee lines opened in 2020.

Out of these credit guarantee lines, P180.67 billion in loans were guaranteed by the state agency, or 8 percent above its target of P167.21 billion for last year, PhilGuarantee president and chief executive officer, Alberto Pascual, said in his report to Finance Secretary Carlos Dominguez III.

Pascual said the state firm’s MSME Credit Guarantee Program accounted for P37.73 billion of the approved credit guarantee lines.

“This was extended to 34 banks across the country to encourage them to continue lending to small businesses affected by the Covid-induced crisis,” he added.

Pascual said the program will be extended until September this year to provide continuing support to affected MSMEs via available access to working capital loans under credit-risk sharing arrangements with accredited banks.

A total of 2,943 new MSME beneficiaries were served under this program, that, as of December 2020, provided guarantees to loans totaling P175.1 million.

Pascual also said in his report to Dominguez, who is PhilGuarantee chairman, that the state-run firm’s strong partnership with 53 banks resulted in P612.81 billion in approved guarantee facilities as of December, to provide these lenders coverage against credit losses from socialized, low, and medium cost housing loans.

A total of P501.34 billion of the guarantee facility was availed of by accredited banks, he said.

With P175.71 billion in guaranteed housing loans, over 11,000 new housing loan borrowers benefited from this facility in 2020, increasing its coverage to a total of 138,800 housing borrowers, Pascual said.

The amount of guaranteed housing loans was 9.7 percent above PhilGuarantee’s target of P160.11 billion in 2020, he added.

For the agriculture sector, Pascual said PhilGuarantee approved guarantee lines of P5.14 billion with 41 partner-lending institutions, with guaranteed loans amounting to P4.25 billion that benefited around 48,000 small farmers, fisherfolk, and other agri-based workers.

PhilGuarantee is the administrator of the Agricultural Guarantee Fund Pool, that provides guarantee coverage to banks, cooperatives, farmers/people’s organizations and corporations lending to small farmers and fisherfolk.

Its AGFP-guaranteed loans of P4.25 billion is 21.4 percent beyond its goal of P3.5 billion in 2020, Pascual said.

As program manager of the Electric Cooperative-Partial Credit Guarantee Program, PhilGuarantee guaranteed in 2020 a total of P625 million in commercial loans of 16 electric cooperative-borrowers to help finance their respective power distribution system upgrades and cut systems losses, he said.

PhilGuarantee made available its SME Credit Guarantee Facility to cover loans of micro and small businesses amounting to P100,000 to P50 million, and its Medium and Large Enterprises Credit Guarantee Facility to support loans above P50 million and up to P300 million.

In partnership with local government units and cooperatives, the state-run firm has also supported the Credit Surety Fund that will allow it to invest equity to guarantee cooperative loans, Pascual said.

To further support the government’s Covid-19 response programs, he said PhilGuarantee implemented a 60-day grace period for the payment of the premium on renewal of guarantee coverage for housing loans, worth a total of P7.2 billion.

PhilGuarantee also provided a 60-day grace period for all existing, current, and outstanding loans in the agriculture sector, that benefited 3,527 small farmers and fisherfolk, and a 60-day grace period under its housing programs and those with restructured accounts, which was availed of by 191 borrowers, Pascual said.

In line with the provisions of the Bayanihan to Heal as One Act and the Bayanihan to Recover as One Act, PhilGuarantee waived penalties amounting to P56.9 million for its housing guarantees, covering 51,084 loans, he added.*PR


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April 2024

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