P665 BILLION IN CREDIT GUARANTEES ISSUED FOR MSMEs

The Philippine Guarantee Corp. (PhilGuarantee) backed PHP655 billion in credit guarantee lines last year as it broadened its support to micro, small and medium enterprises (MSMEs), to keep businesses afloat.

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.

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