Ex­porters want ₧20B slashed from CCT funds for MSMEs

Business Mirror - - BM REPORTS - BY Cather­ine N. Pil­las

PHILIP­PINE ex­porters want the govern­ment to es­tab­lish a P20-bil­lion emer­gency lend­ing fund, which can be sourced from the P64-bil­lion Con­di­tional Cash Trans­fer (CCT) Pro­gram, to spur the de­vel­op­ment and com­pet­i­tive­ness of mi­cro, small and medium en­ter­prises (MSMEs).

As­sis­tant Vice Pres­i­dent for Ad­vo­cacy and Com­mu­ni­ca­tions the Philip­pine Ex­porters Con­fed­er­a­tion Inc. (Philex­port) Ma. Flordeliza Leong said the pro­posal has been trans­mit­ted to the of­fice of Trade Sec­re­tary Adrian S. Cris­to­bal Jr. The fund, as pro­posed by Philex­port, should be ad­min­is­tered by the Small Busi­ness Corp. (SB Corp.), the fi­nanc­ing arm of the Depart­ment of Trade and In­dus­try cater­ing mainly to the MSMEs.

“The con­cept is, be­cause MSMEs are hav­ing dif­fi­culty sourc­ing or ac­cess­ing funds from the bank, we’re look­ing for all sources, and we are sug­gest­ing carv­ing out P20 bil­lion from the CCT Pro­gram, which is P64 bil­lion, to serve as an emer­gency fund for MSMEs to be ad­min­is­tered by the SB Corp., which has a man­date for SME de­vel­op­ment,” Leong said in a re­cent in­ter­view.

To make the avail­ment of funds easy for MSMEs, Philex­port sug­gests im­pos­ing no col­lat­eral and set­ting a low in­ter­est rate with min­i­mum doc­u­men­tary re­quire­ments.

Since the amount will serve as an emer­gency fund to fi­nance what the or­ga­ni­za­tion de­fines as “high-im­pact pro­grams” for ex­port com­pet­i­tive­ness, the govern­ment should con­sider credit ex­po­sure of about 25 per­cent of the pro­posed P20 bil­lion.

Leong em­pha­sized that sub­stan­tial funds are needed to be di­rected to prod­uct de­vel­op­ment and ex­port pro­mo­tions, es­pe­cially for traders com­ing from trade shows abroad.

“We can­not guar­an­tee ev­ery­one of our mem­bers could be ben­e­fi­cia­ries; but there are projects that are just wait­ing to be funded,” she added. The SB Corp. could set the met­rics for the vi­able projects el­i­gi­ble for fund­ing.

Philex­port un­der­scored the ur­gency of govern­ment sup­port for ex­port pro­mo­tions, as the on­set of eco­nomic in­te­gra­tion in the Asean re­gion is pit­ting Philip­pine-made ex­ports with those of its neigh­bors.

Ac­cord­ing to the group, be­cause of pro­duc­tion costs, Philip­pine prod­ucts are still more ex­pen­sive than their Asean coun­ter­parts even with the lower tar­iffs. This is ag­gra­vated fur­ther by the fact that other Asean ex­porters re­ceive govern­ment fi­nan­cial aid for trade-fair par­tic­i­pa­tion.

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