PhilGuarantee’s Financial Assistance to MSMEs Reach ₱3 Billion

On Monday, the Department of Finance (DOF) released a report which highlighted the outstanding assistance provided by the Philippine Guarantee Corp. (PhilGuarantee) to micro, small, and medium enterprises (MSMEs) amidst the prolonged global pandemic. Within the report, it was noted that the financing of credit guarantee facilities to MSMEs has reached ₱3 billion ever since the outbreak of COVID-19.

PhilGuarantee president and chief executive Alberto Pascual added that the December 2020 pilot implementation of the agency’s MSME Credit Guarantee Program (MCGP), which had an initial portfolio of ₱207 million, is accountable for the exceptional performance of their credit guarantee portfolio.

Around 20,310 MSMEs have benefitted from the cumulative releases on the MCGP, which was reported at ₱2.950 billion as of March 10. Of the total, credit guarantee facilities supported releases amounting to ₱1.48 billion to entrepreneurs. “The growth in the MSME credit guarantee portfolio, with the support of 18 banks in the country, represented more than 13 times or 1,325 percent since December 2020, and this was impacted further by PhilGuarantee in the implementation of its key assistance role,” Pascual explained, adding that a 589 percent increase was seen in the registration of MSME beneficiaries — compared to December 2020’s initial level of 2,948.

“The sizable increase in financing assistance at the height of the crisis underlines government’s commitment to rescue small entrepreneurs hardest hit by the global downturn,” furthered Finance Secretary Carlos Dominguez III, who also chairs the PhilGuarantee Governing Board.

“The quick recovery of MSMEs from the global health and economic crises is crucial to the country’s strong rebound at the soonest, considering that they make up 99 percent of all business enterprises and account for nearly 36 percent of the domestic economy,” he added.

The wholesale and retail sector — accounting for ₱1.95 billion of the releases — forms part of the top beneficiaries of the agency’s credit guarantee facilities alongside manufacturing — at ₱230.54 million — as well as transport, storage, and communication — at ₱172.64 million. Other beneficiaries include community, social and other establishments at ₱140.68 million; agriculture and forestry at ₱130.36 million; and hotels and tourism-related services at ₱114.53 million.

Additionally, the agency’s credit guarantee programs cover nationwide but major areas supported by the credit guarantee facilities consist of Regions IV-A, III, I, V, and X which have ₱1.66 billion in cumulative releases since December 2020. Meanwhile, working capital assistance extended by banks to MSMEs in the National Capital Region (NCR) amounted to ₱207.65 million along with the support of PhilGuarantee’s credit guarantee franchise.

“The approval of the credit guarantee facilities enabled the availability and accessibility of credit from banks that would have otherwise been reluctant to lend to MSMEs owing to the uncertainties that prevailed with the onset of the COVID-19 pandemic,” elaborated Pascual. An MSME portfolio of ₱4.4 billion is being expected by PhilGuarantee for this year, as well as 8,800 additional beneficiary enterprises.

Source: Manila Bulletin