Government interventions are in place to address trade finance gaps in the Philippines as part of overall efforts to narrow the global trade finance gap, which stands at around $1.5 trillion annually, according to the National Economic and Development Authority.
On the sidelines of the 2018 Annual Meetings of the International Monetary Fund-World Bank Group, Socioeconomic Planning Secretary Ernesto Pernia said these efforts of the government were meant to make financing more inclusive.
“We need to boost financial services to help our small and medium enterprises,” he said. “More importantly, such services will establish an inclusive financial sector.”
Pernia said the Personal Property Security Act, among other government initiatives, would strengthen the legal framework for the use of personal property as collateral, and establishes a modern, centralized online collateral registry. This law was enacted on Aug. 17.
“We expect this to make financing more accessible to Filipino SMEs, including export-oriented firms,” he said.
“The Bangko Sentral ng Pilipinas is also strengthening retail payments systems by adopting the National Retail Payment Systems framework, or NRPS,” Pernia added. “This should facilitate more convenient, affordable and secure electronic fund transfers and payments.”
The Neda chief also said the government was increasing credit guarantees to P50 billion from P10 billion for SME exporters through the Philippine Export-Import Credit Agency (PhilEXIM), an attached agency of the Department of Finance.
PhilEXIM provides guarantees to facilitate foreign loans of export-oriented industries, public utilities and those registered with the Board of Investments.
Pernia noted the Philippine Development Plan for 2017-2022 identified the need for a resilient and inclusive financial sector. It lays down strategies such as strengthening the effectiveness of financial inclusion initiatives, encouraging efficiency and innovation in microfinance and microinsurance, and developing the legal infrastructure for Islamic finance, among others.
Pernia is attending this year’s IMF-World Bank annual meetings in Bali, Indonesia, with Budget Secretary Benjamin Diokno, Finance Secretary Carlos Dominguez and Central Bank Deputy Governor Diwa Guinigundo. The 2018 edition is focused on “harnessing disruption to shape inclusive economies of the future.” —DAXIM L. LUCAS