P655B credit guarantee for MSMEs opened

    Support for MSMEs. A garments cooperative in Carmona, Cavite taps the shared service facility of the trade department for the production of personal protective equipment in April 2020.

    Over P655 billion in credit guarantee lines were opened in 2020 by the Philippine Guarantee Corp. (PhilGuarantee), the Department of Finance (DOF) said, broadening its support to micro, small and medium enterprises (MSMEs) and key sectors of the economy to help keep businesses afloat amid the coronavirus disease 2019 (COVID-19) pandemic.

    The DOF said in a statement yesterday out of these credit guarantee lines, a total of P180.67 billion in loans were guaranteed by the state agency, or 8 percent above its target of P167.21 billion for last year.

    Alberto Pascual, PhilGuarantee president and chief executive officer, 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,” Pascual said.

    Pascual added 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 which, as of December 2020, provided guarantees to loans totaling P175.1 million. The number of MSME-beneficiaries is expected to increase in January 2021, the DOF said.

    Pascual also said in his report to Finance Secretary Carlos Dominguez, who is PhilGuarantee chairman, the state-run firm’s strong partnership with 53 banks resulted in P612.81 billion in approved guarantee facilities as of December 2020 to provide these lenders coverage against credit losses from socialized, low and medium cost housing loans.

    A total of P501.34 billion of this guarantee facility was availed by the 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, he 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 (AGFP), which 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, said Pascual.

    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 which 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 likewise provided a 60-day grace period for all existing, current and outstanding loans in the agriculture sector, which 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 said.

    Pascual added PhilGuarantee will continue expanding its credit guarantee support to key economic sectors and essential industries such as export, trading, health, manufacturing, renewable energy and commercial agriculture this year.

    PhilGuarantee also aims to speed up its digital transformation and modernization initiatives, dispose of its big-ticket nonperforming assets in 2021, and comply with good governance standards, which include the renewal of its International Organization for Standardization 9001 certification, Pascual said.