By Kris M. Crismundo
MANILA, July 19 (PNA) — The Philippine Exporters Confederation Inc. (Philexport) supports the bill of Senator Bengino Paolo “Bam” Aquino IV of institutionalizing the Credit Surety Fund (CSF) program of the Bangko Sentral ng Pilipinas (BSP) which aims for easier access to finance for micro, small, and medium enterprises (MSMEs).
“Addressing these issues is very critical, as it can spell the entry, expansion, success or closure of MSMEs that are more and more turning to informal lending to respond to their funding requirements,” Philexport president Sergio R. Ortiz-Luis Jr. said.
Ortiz-Luis also noted that making the CSF into law will allow MSMEs to get loans even they are lacking with collateral.
Aquino’s Senate Bill 2218 aims to institutionalize the CSF in which contributions from well-managed cooperatives and non-government organizations (NGOs), local government units (LGUs), and government financial institutions like Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), and Industrial Guarantee and Loan Fund (IGLF) will substitute as a collateral for MSMEs to borrow money from lending banks.
Institutionalizing the CSF will make the LGUs to commit in allocating financial contributions for the sustainability of the program.
Philexport has recommended that the financial contributions of LGUs must be declared as grants, and not as an investment, in order to avoid conflicts since LGU officials’ terms expire.
The central bank’s CSF program has 8,421 beneficiaries and has approved a total loan of Php 1.121 billion as of March 2014.
The BSP also established a total of 30 CSFs nationwide.
“We agree with the recognition that government plays a vital role in encouraging, promoting and institutionalizing a national program that will allow MSMEs and business cooperatives to obtain easier access to credit from banking institutions under a win-win situation such as what the CSF offers,” Ortiz-Luis said.
“After all, these government agencies clearly benefit from MSMEs through jobs, taxes, licenses and registration fees generated from (increased) economic activities by these MSMEs in their respective areas,” Philexport also noted. (PNA)