FREQUENTLY ASKED QUESTIONS

The Philippine Guarantee Corporation is a government institution dedicated to providing quality services and information to its clients, and one way of doing that is providing you with answers to the most common questions about the Corporation and its nature of business.

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PHILGUARANTEE Frequently Asked Questions cover

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  1. What is PHILGUARANTEE?
    PHILGUARANTEE is a government-owned and controlled corporation (GOCC) under the Department of Finance, providing credit guarantees to financial institutions to facilitate access to credit for various key sectors. The Corporation is the result of the merger and consolidation of five (5) Philippine Guarantee Programs and Agencies (PGPAs), pursuant to Executive Order No. 58, s. 2018 as directed by the President of the Philippines.
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  2. What is the primary objective of PHILGUARANTEE?
    PHILGUARANTEE’s primary objective is to perform its development financing role through the provision of a dependable credit supplementation through a system of sustainable guarantees. This is with the end in view of facilitating economic growth, and regional development, by way of supporting trade and investments, housing, MSMEs, agriculture, exports, infrastructure, energy, tourism, and other priority sectors.
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  3. Who are the beneficiaries of the programs of PHILGUARANTEE?
    The beneficial impact of PHILGUARANTEE’s programs redound to socio-economic multipliers that support the growth and competitive advantage of those housing borrowers, small farmers and fisherfolk, and MSMEs. Through productive and working capital loans granted by the financial and non-bank institutions to housing, agriculture, MSME and other priority areas, sectoral beneficiaries, in turn, are afforded financial and livelihood empowerment through access and availability of credit.
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  4. What is a credit guarantee?
    A credit guarantee is a pledge or commitment by a third party (guarantor) to assume responsibility for a debt, whether in part or in full, should the borrower be unable to pay its commitments to the creditor.
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  5. What are the benefits of obtaining a guarantee from PHILGUARANTEE?
    1. Banks benefit in having loans guaranteed since it is zero-risk weighted in their books and thus serves as capital multiplier to expand their loan portfolio.
    2. Bank loans to the extent guaranteed are exempted from the 1% mandatory loan loss provisioning which allows flexibility in negotiating for lower interest rates.
    3. Risk mitigation: Lender’s risk is mitigated, enabling financial institutions to extend credit to a broader range of borrowers.
    4. Tax/fiscal incentives to Banks, Real Estate Developers and Other Financial Institutions which grant loans, credits and financing for housing acquisition and development: It reduces tax liabilities that enhance profitability and increase capital reserves for an improve financial stability.
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  6. Who are the primary clients of PHILGUARANTEE?
    Partner Lending Institutions
    1. Rural Bank
    2. Universal/Commercial Bank
    3. Thrift Bank
    4. Cooperative Banks
    5. Cooperatives
    6. NGOs
    7. Farmers/Fisherfolk Associations
    8. People’s Organizations
    9. Housing Developers/Builders
    10. Loan Associations
    11. Microfinance and other Lending Institutions
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  7. What are PHILGUARANTEE’s various programs and services?
    1. Priority Sector Guarantee Programs
      1. MSME Credit Guarantee Facility
      2. Medium and Large Enterprises-Credit Guarantee Facility (MLE-CGF)
      3. Sustainable Energy Credit Guarantee Facility (SEGF)
    2. Housing Retail Guarantee Facility for:
      1. Socialized Housing
      2. Low-cost Housing
      3. Medium-cost Housing
    3. Agriculture Credit Guarantee Programs
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  8. Can an individual apply directly for guarantee loans?
    PHILGUARANTEE caters directly to lending institutions to enable the provision for guaranteed loans. Individuals may apply for loans through the partner financial institutions. (No comment po from PSGG)
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  9. How does PHILGUARANTEE ensure the sustainability of its operations?
    As a credit guarantee institution, the programs of PHILGUARANTEE are backed by the National Government. Based on its current risk-weighted assets, PHILGUARANTEE can support an economic portfolio that is up to 14x its qualifying capital, which would stimulate development of key sectors and encourage lending activities of the banking system. It manages its operations through a risk-based approach, carefully evaluating the financial stability of partner lending institutions. The Corporation also adheres to regulatory standards, thus maintaining adequate reserves to cover potential losses, and invests in technology and training to enhance its capabilities and efficiency.
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  10. Where can I find more information about PHILGUARANTEE’s programs and services?
    You may access the information through the links below:
    1. Priority Sector Guarantee Programs:
      https://www.philguarantee.gov.ph/programs/guarantee-programs/corporate-msme/
    2. Housing Credit Guarantee Programs:
      https://www.philguarantee.gov.ph/programs/guarantee-programs/housing-credit-guarantee-programs/
    3. Agriculture Credit Guarantee Programs:
      https://www.philguarantee.gov.ph/programs/guarantee-programs/agriculture-programs/
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You can also visit the official PHILGUARANTEE website or contact the office directly.

Website URL: https://www.philguarantee.gov.ph/

Trunk line no.: (02) 5322-8100