PHILIPPINE Guarantee Corp. (PhilGuarantee) has extended nearly P3 billion in financial assistance to micro, small and medium enterprises (MSMEs) through credit guarantees since 2020, the Department of Finance (DoF) said.

PhilGuarantee President and Chief Executive Officer Alberto E. Pascual said the performance of the agency’s credit guarantee portfolio for MSMEs saw an improvement since its MSME Credit Guarantee Program (MCGP) started in December 2020 with an initial fund of P207 million.

The MCGP aims to increase credit available to MSMEs affected by the coronavirus disease 2019 (COVID-19) pandemic by providing starting capital.

As of March 10, P2.95 billion has been disbursed under the program, benefitting 20,310 entrepreneurs, Mr. Pascual said.

Broken down, the wholesale and retail sector benefitted the most from the MCGP, accounting for P1.95 billion of disbursed funds, followed by manufacturing (P230.54 million), transport, storage, and communication (P172.84 million), community, social, and other establishments (P140.68 million), agriculture and forestry (P130.36 million) and hotels and tourism (P114.53 million).

MSMEs benefitted by MCGP surged by 589%, or nearly seven times from the original coverage of 2,948 MSMEs in December 2020.

Mr. Pascual said more than 75% or 15,308 of all enterprises serviced by the program are in the wholesale and retail industry, while the rest are from manufacturing, transport, agriculture, and hotels and restaurants, among others.

There are currently 48 banks with approved PhilGuarantee facilities; 18 are currently active, while 28 banks have fulfilled their guarantee agreements.

“The growth in the MSME credit guarantee portfolio, with the support of 18 banks in the country, represented more than 13 times or 1,325 per cent since December 2020, and this was impacted further by PhilGuarantee in the implementation of its key assistance role,” Mr. Pascual said.

“The approval of the credit guarantee facilities enabled the availability and accessibility of credit from banks that would have otherwise been reluctant to lend to MSMEs owing to the uncertainties that prevailed with the onset of the COVID-19 pandemic,” he added.

“The sizable increase in this state-run corporation’s financing assistance to MSMEs at the height of the COVID-19 outbreak underlines this administration’s commitment to rescue small entrepreneurs hardest hit by the global downturn and ensure their swift and strong recovery from the prolonged pandemic.” Finance Secretary Carlos G. Dominguez III, who also chairs the PhilGuarantee Governing Board, said.

He added that the swift recovery of MSMEs is crucial for the economy’s recovery as they make up 99% of all businesses and account for 36% of output. — T.J. Tomas

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