PhilGuarantee offering P300-million loan guarantee for large firms
MANILA, Philippines — To aid large businesses badly hit by the pandemic-induced recession, the state-run Philippine Guarantee Corp. (PhilGuarantee) is offering a facility covering as much as P300 million of their bank loans.
PhilGuarantee president and chief executive Alberto E. Pascual told members of the Chamber of Thrift Banks (CTB) last Wednesday that they will “soon” relaunch the guarantee program for bigger firms, just as they currently provide credit guarantees to micro, small and medium enterprises (MSMEs), small farmers and fisherfolks, as well as housing loans.
In a separate interview on Thursday, Pascual said that while loan guarantees had been provided to large enterprises in the past, the new program will be funded by the P5-billion additional capitalization to be poured into PhilGuarantee by the Bayanihan to Recover as One or Bayanihan 2 Law.
The maximum guarantee cover of P300 million per borrower will allow PhilGuarantee to cover as many struggling firms as possible, Pascual said.
PhilGuarantee was already crafting the Bayanihan 2 Law‘s implementing guidelines on credit guarantees, which will list down the types of companies and which sectors can avail.
Pascual nonetheless noted that the Bayanihan 2 Law wanted to help “critically impacted” industries, which he said included trade, transportation, as well as tourism and hospitality.
Bayanihan 2 also identified healthcare, education and manufacturing among the sectors it will support financially through guarantees, Pascual said.
Only those included in the “negative list” of economic activities to which the government does not extend guarantees cannot avail of the facility, Pascual added.
The additional capitalization under Bayanihan 2 will bring PhilGuarantee’s equity to about P28 billion, which Pascual said had a guarantee capacity or leverage of 20 times or about P560 billion.
“As of now, our outstanding guarantees went down a little bit because of the pandemic, so I think we have an extra guarantee capacity of P300 billion available for all the banks,” Pascual told CTB members.
Pascual said the implementation of PhilGuarantee’s special MSME credit guarantee program approved at the height of the COVID-19 lockdown in April to assist small businesses had been delayed, but it was finally rolled out this month.
As such, Pascual said the MSME facility may be extended beyond the quarantine period.
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