Gov’t guaranteed loans to MSMEs hit ₱1.47 B

State-run Philippine Guarantee Corp. (PhilGuarantee) sustained the growth of its guarantee program for viable but pandemic-hit micro, small and medium enterprises (MSMEs) for the third straight month since its launch in December last year.

The total loans guaranteed by PhilGuarantee reached ₱1.47 billion at end-March this year, the agency’s report submitted to Finance Secretary Carlos G. Dominguez III showed on Wednesday, May 5.

Alberto Pascual, PhilGuarantee president and chief executive officer said the guaranteed loans represent a 612 percent increase from the P207 million pilot guarantee portfolio achieved at the launching of the MSME Credit Guarantee Program (MCGP) in December.

Pascual said the number of MSME beneficiaries grew by 312 percent to 12,122 enterprises in March from 2,948 that were reported to have availed of its guarantee program as of December 2020.

He pointed out that the implementation of improved processing and evaluation parameters starting this year led to the increase in the number of beneficiaries under MCGP.

From the start of the MGCP's implementation last year, the PhilGuarantee Governing Board chaired by Dominguez thus far approved a total of ₱37.7 billion in credit guarantee facilities to 34 banks.

“Majority of the MSMEs covered were from the wholesale and retail sector which accounted for 67.26 percent of the total, or ₱503.5 million with 9,113 MSMEs assisted,” Pascual said in his report.

Pascual said the second biggest group with guarantee coverage was the manufacturing sector, which accounted for 7.77 percent or ₱58.17 million with 1,048 assisted MSMEs.

The agriculture sector was the third biggest sector that have benefited from the MGCP, with 158 MSMEs assisted through guarantees amounting to ₱33.91 million, which is 4.53 percent of the loans covered so far under this program, he said.

In the severely affected hotel and restaurant sector, Pascual said that 573 MSMEs were assisted with guaranteed loans amounting to ₱28.45 million, while the personal services sector accounted for guarantees amounting to ₱31.82 million.

The MGCP grants a 50-percent guarantee for working capital loans and a guarantee of up to 80 percent of the amount for term loans of up to seven years for capital expenditures.

The average loan size under the MGCP is less than ₱1 million, with the minimum loan amount set at ₱100,000, which can be availed mostly by micro businesses borrowing from thrift banks and rural banks.

“In terms of geographical distribution, all regions of the country had received assistance under the MGCP,” Pascual said.