THE PHILIPPINE Guarantee Corp. (Philguarantee) said it has approved credit guarantees on loans worth P37.7 billion.

The period covered is the start of the guarantee program in December until June this year.

Citing a report from the state-run firm, the Department of Finance said Tuesday that Philguarantee backed P2.1 billion worth of loans taken on by over 10,000 micro-, small-, and medium-sized enterprises (MSMEs) from banks.

When the program was launched in December, it had only P207 million in guaranteed loans.

The program typically provides 50% cover on business loans, according to Philguarantee President and CEO Alberto E. Pascual.

Currently, 19 lenders are participating the program: two universal banks, six thrift banks and 11 rural banks, up from only three lenders at the launch last year.

“The participating banks have sustained their lending activity. A total of 9,180 SMEs (small and medium enterprises) in the essential wholesale and retail trade sector (i.e., agricultural products distribution, medical support and medicine distribution) were granted additional working capital for their businesses,” Mr. Pascual said.

He added 1,332 manufacturers also benefited from the program.

Philguarantee is currently implementing the government’s P120-billion credit guarantee program for MSMEs, intended to help small businesses survive the pandemic by encouraging banks to lend them the capital they need.

Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) injected additional capital of P5 billion into the company to expand the program, P2 billion of which was set aside for MSMEs and the rest for guarantees on loans to bigger companies requiring up to P300 million in credit cover.

Philguarantee covers loans for small companies of between P100,000 and P1 million when they borrow mostly from thrift banks and rural banks.

It can also provide up to 80% guarantee cover on debt with a maturity of a maximum of seven years. — Beatrice M. Laforga