State-run Philippine Guarantee Corp. (PhilGuarantee) has already guaranteed a total of P1.47-billion loans to micro, small, and medium enterprises (MSMEs) as of end-March this year to help cushion the impact of the Covid-19 pandemic.
PhilGuarantee continued to grow its guarantee program for viable but pandemic-hit MSMEs for the third straight month since its launch in December, with guaranteed loans surging by 612 percent, from the P207-million pilot guarantee portfolio.
PhilGuarantee President-CEO Alberto Pascual reported to Finance Secretary Carlos G. Dominguez III that there was a 312-percent jump in the number of MSME beneficiaries to 12,122 enterprises in March from 2,948 that have availed the guarantee program as of December last year.
Pascual attributed the rise in the number of MSME Guarantee Program (MGCP) beneficiaries to the implementation of improved processing and evaluation parameters starting this year.
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.
From the start of the MGCP’s implementation last year, the PhilGuarantee Governing Board chaired by Dominguez thus far approved a total of P37.7 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 P503.5 million with 9,113 MSMEs assisted,” Pascual said in his report.
Next to the wholesale and retail sector is the manufacturing sector, which accounted for 7.77 percent, or P58.17 million with 1,048 assisted MSMEs.
This was followed by agriculture sector with 158 MSMEs assisted through guarantees amounting to P33.91 million, which is 4.53 percent of the loans covered so far under this program.
In the severely affected hotel and restaurant sector, Pascual said 573 MSMEs were assisted with guaranteed loans amounting to P28.45 million, while the personal services sector accounted for guarantees amounting to P31.82 million.
The average loan size under the MGCP is less than P1 million, with the minimum loan amount set at P100,000, which can be availed of mostly by micro businesses borrowing from thrift banks and rural banks.
By geographical distribution, all regions in the country had received assistance under the MGCP, according to Pascual.
Topping the list of regions which received assistance under the program are Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) or Region 4A with P135.76 million, Central Luzon or Region 3 with P118.87 million, and Ilocos provinces or Region 1 with P65.82 million.
From three active banks in December 2020, Pascual said, there are now 14 active banks participating in the MGCP as of end-March.
“Twelve more banks are expected to start submitting MSMEs for guarantee coverage as their facilities will be operational,” he said.
Under Republic Act (RA) 11494, or the Bayanihan to Recover as One Act (Bayanihan 2), MSMEs account for P2 billion of the P5 billion appropriated for PhilGuarantee to aid pandemic-hit enterprises.
The Bayanihan 2 allocation for PhilGuarantee enabled it to further widen its guarantee headroom of economic activities and extend more assistance to viable but severely affected MSMEs, Pascual said.
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