By Ernie Reyes
MANILA — To facilitate post-pandemic recovery in the Philippines, senatorial aspirant and incumbent Sorsogon Gov. Francis “Chiz” Escudero is urging banks to ensure that 10% of its loan portfolio goes to micro, small and medium enterprises (MSMEs) financing.
MSMEs, especially in the provinces, are in dire need of financing and capacity-building assistance so they can regain their footing after the COVID-19 pandemic caused business closures, displacement of workers, and pay cuts due to a reduction in working hours.
“What MSMEs need now is a credit line that will allow them to start anew and pump fresh resources into businesses that are barely surviving. Banks have the opportunity and responsibility to help our local entrepreneurs, as dictated by the Magna Carta for Micro, Small and Medium Enterprises,” Escudero said.
Under the Magna Carta for MSMEs Act, or Republic Act 6977, banks must set aside at least 8% of its loan portfolio for micro and small enterprises and at least 2% for medium enterprises. The period covered for such mandate was from 2008 to 2018, although the Bangko Sentral ng Pilipinas (BSP) continues to monitor MSME lending.
In the first quarter of 2021, only 5.2% of banks’ P8.6 trillion loan portfolio went to MSMEs, or around PHP 448 billion as banks continued to be wary of extending loans to MSMEs. (ai/mtvn)