The Small Business Corporation, an attached agency of the Department of Trade and Industy, will now focus on lending after Executive Order No. 58 was signed by President Rodrigo Duterte on July 23, which instructs the transfer of the guarantee functions to the Philexim.
The EO 58 approved the merger of the Philippine Export-Import Credit Agency (PhilExim) with state-run guarantee corporations, Home Guaranty Corp. (HGC), creating a single entity handling the government guarantee system. Likewise, it has directed the transfer of all guarantee-related functions, programs, assets and liabilities of the Small Business Corp to Philexim.
SB Corp., also the lead agency in micro, small and medium enterprise (MSME) finance will turn over corporate-funded guarantee reserve fund and other guarantee fund in manages to the new Philippine Guarantee Corporation (PhilGuarantee).
“We welcome this new development as a step towards more standardized policies and processes that will facilitate timely delivery of services to the public. It is very clear that the national government is trying to address the concerns of operational redundancies. With a single entity handling guarantees and SB Corp purely focused on MSME financing, our resources will be directed towards funding the growth of our MSME client base,” President and Chief Executive Officer Ma. Luna Cacanando said.
The Small Business Corp. is the only government corporation mandated to wholly focus on MSME development finance. It implements comprehensive policies and programs to help micro, small and medium enterprises in finance and information services, training and marketing, among others.
In 2017, SB Corp was tasked to respond to the needs of MSMEs affected by deep-impact calamities and address the need for an alternative to 5-6 lending through appropriate financing facilities that are of significantly low in interest and has lenient repayment schedule.
Meanwhile, Cacanando said that the SB Corp. looks to release at least P1.7B of loans to micro entrepreneurs through the Pondo sa Pagbabago at Pag-asenso (P3) Program.
“We are keeping the momentum going, targeting the release of at least 1.7B in P3 loans by end 2018. The 1B a year in P3 funds will support at least 40,000 micro enterprises serviced by more than 200 credit delivery partners spread out in all provinces of the country. For every P1 B from the national government, each province will be allocated at least P10 million in P3 funds,” Cacanando explained.
The Pondo sa Pagbabago at Pag-asenso (P3) is the government’s micro finance program designed to combat usurious 5-6 lenders, which will enable micro entrepreneurs to borrow P5,000 up to P200,000.
SB Corp maintains a sizable SME financing portfolio with more than 2,000 active borrowers nationwide and 154 partner financial institutions. SB Corp also aims to balance the scale by addressing the demand side of SME credit by capacitating financial institutions on risk based lending and account officers under a certification program with the end goal of producing more bank account officers who are equipped and qualified to evaluate SME loans.
SB Corp’s main mission is for MSMEs to receive an increased share in the allocation of the country’s national resources and put into place actual measures to implement the laws developed and passed by Congress that are beneficial to the MSME sector.
“Our local MSMEs are seen to be the most vulnerable to the challenges arising from a lot factors. Our government is doing its best to provide services to our MSMEs at par or better than our ASEAN counterparts. We hope for the best and we continue to work on multiple fronts to play our part in the government’s inclusive growth agenda by putting in place all the support that our MSMEs need and will need in the future,” Cacanando pointed out.
Date of Release: 30 July 2018