PHILGUARANTEE Inks Agreement with Six Banks to Guarantee MSME Loans
State-owned Philippine Guarantee Corporation (PHILGUARANTEE) has signed separate agreements with six banks providing MSME loans. A total of P10.2 Billion of these loans to MSMEs will provide cushion to small businesses affected by the COVID-19 pandemic.
The Bank of the Philippine Islands, Union Bank of the Philippines, Malayan Bank, BPI Direct BanKo, New Rural Bank of San Leonardo, Inc. and the Bangko Kabayan, Inc. have signed separate agreements with PHILGUARANTEE, which will provide partial guarantee against credit losses of these lending banks in the event of non-payment of MSME loans. A signing ceremony was held last August 5 via video conferencing, which was also attended by key officers of the six banks, as well as from PHILGUARANTEE led by President and CEO Alberto E. Pascual. National Treasurer and PHILGUARANTEE Board Alternate Chairperson Rosalia V. De Leon was also on hand to take part in the signing ceremony.
As of June 30, 2020, PHILGUARANTEE has approved a total of P37.5 Billion in credit guarantee facilities for 22 accredited banks, in line with the Corporation’s key assistance role of encouraging the banking sector to continue lending to MSMEs under the government’s economic recovery program due to the COVID-19 pandemic. PHILGUARANTEE is processing accreditation of more banks to have broader channels of credit support to MSMEs, which would ensure a nationwide reach.
Apart from its support to the MSME sector, PHILGUARANTEE also realizes its mandate objectives to mitigate the risk of banks in lending to small farmers and low-cost/socialized housing. During the first quarter of 2020, the Corporation extended P5.5 Billion in credit guarantees to 35 partner lending institutions in the agriculture sector. This benefited more than 31,000 agri-based workers. On the other hand, PHILGUARANTEE has a total of P159 Billion in approved guarantee lines for 77 partner banks in support of the housing sector. More than 109,000 loan borrowers have benefitted from the state guarantee facility.
The above activities of the Corporation that are benefitting the MSME sectors as well as the housing and agriculture sectors are also in line with the institutional thrust of corporate social responsibility through the relevant guarantee programs that redound to socio-economic impact and multiplier effects.
PHILGUARANTEE, the Principal Agency for State Guarantee Finance of the Philippines, is a government financial institution resulting from the merger and consolidation of five Philippine Guarantee Programs and Agencies as directed under Executive Order No. 58, s. 2018 by the President of the Philippines, of which the surviving entity was the Philippine Export-Import Credit Agency (PhilEXIM) and renamed as such.
