BSP: P40.6B in loans granted to MSMEs during ECQ

MANILA, Philippines — Banks have granted a total of P40.6 billion in loans to help micro, small and medium enterprises (MSMEs) largely affected by the government’s imposition of enhanced community quarantine (ECQ) due to the coronavirus pandemic, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

During the online hearing of the House committee on banks and financial intermediaries, BSP Managing Director Lyn Javier said banks continued to generate MSME loans even during the ECQ period.

“For the initial impact of the measures undertaken by the BSP, the BSP is very pleased to note that the banking system has responded to the BSP’s relief measures,” Javier told lawmakers.

“Based on a survey we conducted on the country’s top 30 banks composed of the top 10 banks for bank category, that’s top 10 universal commercial banks, top 10 thrift banks, and top 10 rural banks, we note that banks continue to generate new MSME loans even during the ECQ. A total of P40.6 billion in loans were granted by these banks during the ECQ,” she added.

Of the P40.6 billion loans granted to MSMEs, BSP said P30.8 billion were reported at the end of March this year while P9.8 billion were recorded at the end of April.

To recall, President Rodrigo Duterte placed the entire Luzon region under ECQ in March as part of government measures to prevent the spread of COVID-19.

Javier further said banks also extended financial relief to their MSME partners through amendments in their financing terms.

“You can note that from March to April 2020, P25.6 billion in MSME loan accounts were renewed while P1.8 billion in MSME loan accounts were restructured,” Javier said.

Moreover, Javier said that since the effectivity of BSP Circular No. 1083, which allows the recognition of loans granted to MSMEs as a form of alternative compliance with the reserve requirement, the central bank “has been diligent in monitoring the banks’ usage of reserves on a weekly basis.”

“As of the reserve week June 26, 2020, P71 billion in MSME loans were reported as compliance by 90 banks with the reserve requirements. This amount represents MSME loans that were either granted or refinanced after March 15, 2020,” Javier said.

“This is a substantial increase from only P9.9 billion in MSME loans used by 55 banks immediately after the effectivity of the relief measures,” she added.

KGA