Philippine Guarantee Corp. (PhilGuarantee), run by the state, maintained the growth of its guarantee program for viable micro, small and medium enterprises (MSMEs) but affected by the pandemic for the third consecutive month since its launch in December of the year last.
Total loans guaranteed by PhilGuarantee reached 1.47 billion pesos at the end of March this year, according to the agency’s report submitted to Finance Secretary Carlos G. Dominguez III on Wednesday, May 5.
Alberto Pascual, President and CEO of PhilGuarantee, said secured loans represent a 612% increase over the 207 million peso guarantee pilot portfolio made when the MSME Credit Guarantee Program (MCGP) was launched. in December.
Pascual said the number of beneficiary MSMEs increased by 312% to 12,122 companies in March, compared to 2,948 that would have benefited from its guarantee program in December 2020.
He pointed out that the implementation of improved treatment and assessment parameters from this year has led to the increase in the number of beneficiaries under the MCGP.
Since the implementation of the MGCP began last year, the board of directors of PhilGuarantee chaired by Dominguez has so far approved a total of 37.7 billion pesos of credit guarantee facilities to 34 banks.
“The majority of MSMEs covered were in the wholesale and retail sector, which accounted for 67.26% of the total, or 503.5 million pesos with 9,113 MSMEs assisted,” Pascual said in his report.
Pascual said the second largest group with warranty coverage was the manufacturing sector, which accounted for 7.77% or 58.17 million pesos with 1,048 MSMEs assisted.
The agricultural sector was the third largest sector to benefit from the MGCP, with 158 MSMEs assisted by guarantees amounting to 33.91 million pesos, or 4.53 percent of loans covered so far under the framework. of this program, he said.
In the severely affected hotel and restaurant sector, Pascual said that 573 MSMEs received guaranteed loans amounting to 28.45 million pesos, while the personal services sector represented guarantees amounting to 31.82 million pesos.
The MGCP provides a 50% guarantee for working capital loans and a guarantee of up to 80% of the amount of term loans with a maximum term of seven years for capital expenditures.
The average loan size under the MGCP is less than 1 million pesos, with the minimum loan amount set at 100,000 pesos, which can be used mainly by micro-enterprises borrowing from savings banks and banks. rural.
“In terms of geographic distribution, all regions of the country have received assistance under the MGCP,” said Pascual.
The first 3 regions assisted in terms of guaranteed loan amounts were CALABARZON (Cavite, Laguna, Batangas, Rizal and Quezon) or region IV-A with 135.76 million pesos, central Luzon or region III with 118, 87 million pesos, and the provinces of Ilocos or Region I with 65.82 million pula.
Of three active banks in December 2020, Pascual said there are now 14 active banks participating in MGCP from
March 31, 2021.
“Twelve more banks are expected to start subjecting MSMEs to collateral coverage because their facilities will be operational,” Pascual said.
Under the Law of the Republic (RA) n ° 11494 or the Bayanihan to Recover as One Act (Bayanihan 2), MSMEs represent P 2 billion of the P 5 billion allocated to PhilGuarantee to help businesses affected by the pandemic. The Bayanihan 2 allocation for PhilGuarantee allowed it to further expand its margin of guarantee of economic activities and extend further assistance to viable but severely affected MSMEs, Pascual said.
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