Philippine banks continue to miss MSME lending quota
PHILIPPINE banks continued to fall short of the mandated quota for small business loans in the first half, data from the central bank showed.
Loans extended by the banking industry to micro, small and medium-sized enterprises (MSME) had reached P488.13 billion as of end-June, accounting for only 4.52% of their total loan portfolio of P10.8 trillion, well-below the required 10% quota.
Banks must allot 10% of their loan portfolio for small businesses under the Magna Carta for MSMEs.
Under the law, 8% must go to micro and small enterprises, while 2% must go to medium-sized businesses.
As of end-June, lending to micro and small enterprises stood at P196.834 billion, equivalent to 1.82% of their total loan portfolio and well below the 8% quota.
Loans for medium enterprises hit P291.296 billion, accounting for 2.7% of their total credits and exceeding the 2% quota.
Universal and commercial banks released P134.095 billion in loans to micro and small enterprises in the first semester, or 1.35% of their total loans.
Big banks’ loans to medium enterprises stood at P235.814 billion, or 2.38% of their total lending.
Thrift banks extended loans worth P24.604 billion to micro and small enterprises or 3.74% of their portfolio, while their loans to medium enterprises hit P35.532 billion, equivalent to 5.39% of their total lending.
Meanwhile, rural and cooperative banks exceeded the quota for lending to MSMEs. They extended loans to micro and small enterprises worth P37.884 billion, equivalent to 17.61%.
They also released loans to medium enterprises worth P19.923 billion or 9.26%.
Loans granted by digital banks to the micro and small enterprise sector stood at P250 million in the first half, accounting for 1.41% of their total credits.
They disbursed P30 million to medium enterprises, equivalent to 0.16% of their portfolio.
During the coronavirus pandemic, the Bangko Sentral ng Pilipinas (BSP) allowed banks to count MSME loans as alternative reserve compliance with the reserve requirements to help support the sector.
The relief measure expired on June 30, 2023. However, it was extended to thrift banks and rural and cooperative banks until Dec. 31, 2025. — Luisa Maria Jacinta C. Jocson
