Credit guarantee scheme to jumpstart 12k MSMEs

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The Philippine Guarantee Corp.’s (Philguarantee) credit guarantee scheme is expected to jumpstart at least 12,000 small businesses affected by the coronavirus disease 2019 (COVID-19) pandemic, the Department of Finance (DOF) said in a statement yesterday.

The DOF said the Micro, small and medium enterprise (MSME) Credit Guarantee Program is one of the key assistance measures extended to support affected sectors of the COVID-19 crisis.

The program provides for a 50 percent guarantee coverage on MSME working capital loans availed from accredited banks and financial institutions.

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The Philguarantee Governing Board chaired by Carlos Dominguez, DOF secretary, approved the credit guarantee scheme to cover an estimated P120 billion in working capital loans accessed by MSMEs.

The credit guarantees will help MSMEs overcome their economic difficulties resulting from the coronavirus-induced global health crisis, the DOF said.

The annual guarantee fee for the coverage is one percent of the guaranteed loan amount, with the usual origination fees waived under the program, according to Philguarantee.

Aside from the credit guarantee facility, the DOF said Philguarantee continues to take part in the government’s implementation of the Bayanihan to Heal As One Act, with its deferment of statutory deadlines and timelines for payments and other charges by waiving all housing program-related penalties covering the period from March 16 to May 31. This is expected to benefit 28,137 clients.

“The various relief and guarantee support mechanisms instituted beginning March 16, 2020 remains available for the agricultural, housing and MSME clients, accounts and partner lending institutions (PLIs),” Philguarantee said.

The agency also extended a two-month moratorium on the monthly amortization payments for long- and short-term rentals and those covered by joint venture agreements for 4,647 of its existing housing accounts.

It has also lifted the 30-day period to file housing claims between March 16 and May 31 for 150 target-beneficiaries, and granted a 60-day extension period to all Agriculture Guarantee Fund Pool (AGFP) guarantee lines expiring between March 16 and April 30, which will benefit 12 of its PLIs.

For its 35 PLIs with claims for AGFP guaranteed loans with maturities between March 16 and April 15, Philguarantee granted an additional 30 days (for a total of 105 days) for the filing of their claims.

Philguarantee has also granted a moratorium on the payment of loan amortizations and lease rentals for restructured loans and lessees of acquired properties effective March 16 to May 31, with no additional interest and penalties incurred during the said period.

On the availment of AGFP guarantee lines for small palay farmers, the Philguarantee Governing Board approved the reduction of the guarantee fee from one percent to 0.5 percent and increased the guarantee coverage from 85 percent to 90 percent for PLIs, which will run until July 15, 2020.

The DOF said Philguarantee also identified real properties under its name that may be utilized by the government for its COVID-19 response efforts.

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