THE DEPARTMENT of Trade and Industry is set to establish “out-of-the-box concept of access to credit” to make financing more accessible to entrepreneurs, particularly the micro-, small- and medium-sized enterprises (MSMEs).
This move is expected to make local enterprises more competitive compared to their peers in the international market.
Speaking before members of the Philippine Exporters Confederation Inc., Trade Undersecretary Nora K. Terrado said the DTI would recommend the infusion of more capital into Small Business Corp. (SBCorp.), the financing arm of the agency, so it could lend more to MSMEs and guarantee their borrowings.
“So far, SBCorp has trained 70 rural and thrift banks to apply the risk-based lending scheme for MSMEs so they are not dependent on collateral,” the trade official was quoted by Philexport as saying.
Terrado said the DTI would continue extending credits to exporters through government financing institutions; strengthen loan guarantee programs via state run firms such as Philippine Export-Import Credit Agency (PhilExim) and SBCorp., and explore new credit sources and crowd sourcing for the growing start-up sector.
“By improving exporters’ access to finance, we expect to ensure market prospecting, product development and market diversification,” she said.
Providing MSMEs easier access to innovative financing was among the strategies outlined in the Philippine Export Development Plan (PEDP) 2015 to 2017 to achieve merchandise and service export growth. These strategies also included a program involving building on and hastening implementation of the Startup Ecosystem Development Program (SEDP).
Terrado said SEDP aimed to create a pipeline of new businesses that would thrive in the innovation economy—products and services that were “run by algorithms which enable SMEs to scale even further.”
Citing latest figures from the Philippine Statistics Authority, Philexport said merchandise exports declined by 3.8 percent in May this year compared to year-ago level—the 14th consecutive month that the country had posted a decline. On a cumulative basis, merchandise exports posted a decline of 6.6 percent, it said.
Terrado also vowed to push for the “full and faithful implementation” of the Magna Carta for MSMEs, especially the mandatory allocation of credit resources to target beneficiaries of the law. She noted that while there was an existing Magna Carta for MSMEs, which provided a mandatory lending of banks to MSMEs, the lack of financing assistance remained a major problem in the country. Amy R. Remo