PhilGuarantee expands credit support to MSMEs

February 21, 2021, 7:06 pm

MANILA – 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 PHP655 billion in credit guarantee lines opened in 2020. 
Out of these credit guarantee lines, a total of PHP180.67 billion in loans were guaranteed by the state agency, or 8 percent above its target of PHP167.21 billion for last year, said PhilGuarantee president-chief executive officer Alberto Pascual in his report to Finance Secretary Carlos Dominguez III. 
Pascual said the state firm’s MSME Credit Guarantee Program (MCGP) accounted for PHP37.73 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, which as of December 2020, provided guarantees to loans totaling PHP175.1 million. The number of MSME-beneficiaries was expected to have increased in January 2021. 
Pascual also said in his report to Dominguez, who is PhilGuarantee chairman, that the state-run firm’s strong partnership with 53 banks resulted to PHP612.81 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 PHP501.34 billion of this guarantee facility was availed by the accredited banks, he said.
With PHP175.71 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 PHP160.11 billion in 2020, he added.
For the agriculture sector, Pascual said PhilGuarantee approved guarantee lines of PHP5.14 billion with 41 partner-lending institutions, with guaranteed loans amounting to PHP4.25 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 PHP4.25 billion is 21.4 percent beyond its goal of PHP3.5 billion in 2020, Pascual said.
As program manager of the Electric Cooperative-Partial Credit Guarantee Program (ECPCGP), PhilGuarantee guaranteed in 2020 a total of PHP625 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 PHP100,000 to PHP50 million and its Medium and Large Enterprises Credit Guarantee Facility to support loans above PHP50 million and up to PHP300 million. 
In partnership with local government units (LGUs) 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 PHP7.2 billion.
PhilGuarantee also 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 (Republic Act or RA 11469) and the Bayanihan to Recover as One Act (RA 11494), PhilGuarantee waived penalties amounting to PHP56.9 million for its housing guarantees covering 51,084 loans, he said.
Pascual further said 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 non-performing assets in 2021, and comply with good governance standards, which include the renewal of its International Organization for Standardization (ISO) 9001 certification, he added. (PR)