PHILGUARANTEE highlights its post-pandemic assistance, outlines development finance goals during international confabs
State-owned Philippine Guarantee Corporation (PHILGUARANTEE) underscored its key assistance role during the pandemic with the rest of its local and international counterparts during its virtual participation in three important annual meetings in the Asia-Pacific Region.
During the 44th Annual Meeting of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) held last October 27-28 with the theme “Development Financial Institutions Moving Forward: Opportunities for Growth”, PHILGUARANTEE underscored the meaningful role of its mandate in support of the MSME, housing and agriculture sector, and committed to further support strategic areas of the economy, including future technologies, energy and medium-to-large projects and segments.
The Corporation also participated in the 26th Annual Asian EXIM Banks Forum (AEBF) CEO’s Meeting on November 2, with the theme ““The Effects and Possible Consequences of the Covid-19 Pandemic on the Trade Flows and Investment in Asia”. The Corporation emphasized on its contributions to assist its clientele in the housing, MSME and agriculture sectors, particularly in terms of granting relief measures and moratorium on payment of amortizations and dues. It expounded further on the discussions pertaining to regional challenges and opportunities, for which PHILGUARANTEE’s role as the Principal Agency for State Guarantee Finance of the Philippines was highlighted.
Since the pandemic began in March 2020, PHILGUARANTEE has approved a total of P41.66 Billion in MSME credit guarantee facilities to 47 banks/financial institutions. Alongside the facilities covering the housing and agriculture sectors, as of November 30, 2021, the Corporation’s total credit guarantees issued amount to P195 Billion, and as a result of such, assisted more than a quarter of a million program beneficiaries – micro, small and medium entrepreneurs, low-cost/socialized homebuyers, and farmers and fisher-folks.
The Housing Guarantee Group has approved a total of P81.87 Billion in credit guarantee facilities to 13 banks, real estate developers and other financial institutions. As of October 30, 2021, the Corporation’s total outstanding credit guarantees issued for housing amounts to P187 Billion. This has made housing more affordable to the corresponding 140,250 buyers/borrowers of residential units, more than 81% of which belong to the microfinance, socialized and low-cost income sectors.
For the agricultural sector, a total of P5.76 Billion guarantee lines have been approved with 49 partner-lending institutions, with guaranteed loans amounting to P5.10 Billion as of November 30, 2021. This has provided guarantee coverage to banks, cooperatives, farmers/people’s organizations and corporations lending to small farmers, fisherfolk, other agri-based workers.
A major initiative of PHILGUARANTEE approved by its Governing Board chaired by Finance Secretary Carlos G. Dominguez III is the MSME Credit Guarantee Program (MGCP), which aims to support the mobilization of working capital from the banking sector to entrepreneurs affected by the COVID-19 pandemic.
In the years to come, PHILGUARANTEE assured other EXIM Banks of its continued collaboration and active engagement with the group, and highlighted its efforts toward creating credit guarantee facilities that will support fin-techs, energy and energy efficiency projects, and other projects that will stimulate investments from the private sector, including those covered under the Investment Priorities Plan of the government.
At the same time, PHILGUARANTEE also participated in the 33rd Asian Credit Supplementation Institution Confederation (ACSIC), last November 16 with theme “Financial Support for SMEs Impacted by Covid-19: Measures Implemented in Member Countries/Regions Through Credit Supplementation”. The event was hosted by Japan Federation of Credit Guarantee Corporations and Japan Finance Corporation. The Corporation once again emphasized on the role of supporting MSMEs through the provision of credit guarantee facilities, and the extent of the efforts made in assisting PHILGUARANTEE’S mandated sectors thus far.
As part of its business continuity, PHILGUARANTEE reassured its regional counterparts that it remains committed to its overall resilience, complemented by initiatives of digital transformation and service delivery, given its stability and reliability as a bigger, better and stronger state credit guarantor.
The state-owned credit guarantee corporation emphasized on its major covid-19 pandemic- related initiatives and measures taken to assist guaranteed borrowers in the housing, MSME and agriculture sectors. Serving as an economic tool, credit guarantees provide the means to encourage private banks to continue lending to priority sectors and essential industries while improving capital adequacy ratio, reduce intermediation costs, and achieve broader outcomes for socio-economic impact while ensuring effective risk management.