STATE-RUN Philippine Guarantee Corp. (Philguarantee) hopes to provide 50% guarantee cover on loans taken out by at least 12,000 micro, small and medium enterprises (MSMEs) affected by the coronavirus crisis.
In a statement Tuesday, the Department of Finance (DoF) said the Philguarantee governing board has approved the credit guarantee scheme valued at around P120 billion, which will offer guarantees to encourage institutions to lend to small businesses seeking working capital.
Philguarantee will charge a 1% annual guarantee fee while waiving origination fees.
Eligible lenders include universal, commercial, thrift and rural banks as well as other financial institutions supervised by the central bank.
“The program is intended to support those businesses who are facing economic difficulties as a result of the crisis. The guarantee program will also complement access to lending as it encourages more banks to provide assistance loans to MSMEs,” Philguarantee President and CEO Alberto E. Pascual was quoted as saying in the statement.
Philguarantee also waived all penalties incurred between March 16 and May 31 related to its housing programs, which is expected to benefit over 28,000 clients.
“The various relief and guarantee support mechanisms instituted beginning March 16, 2020 remain available for the agricultural, housing and MSME clients, accounts and partner lending institutions,” Philguarantee said.
It also provided a two-month moratorium on monthly amortization payments for long- and short-term rentals as well as those covered by joint venture agreements. — Beatrice M. Laforga