Empowering,

he spoke with approval about the outgoing administration’s Pantawid Pamilyang Pilipino Program that distributes health and education grants among impoverished families. But he also had a reservation about it. “That program is successful but that requires continuous funding,” he said. “If we give out money, pretty soon there’ll be no more money to help out the others.”

For Mr. SyCip, the key to microfinance is in the small, unsecured loans that can go for as low as P5,000 with very frequent amortizations in small amounts. The risk is built into the price. “Most MFIs would charge from 2.5% to 3.5% interest per month which, to some may be considered high, but this is so much lower than the outrageous 20% interest rate charged by the informal ‘5- 6’ lenders,” he said.

On the surface, that P5,000 seems scanty. But Mr. SyCip is mindful of the impact that such a sum can have on a family that is hard up. “…[T]o a family of five [the average Filipino family], it means a potential daily income of P200- 300 per day that the mother earns from her sari- sari store. This can spell the difference between having three square meals a day instead of the typical one or two.”

Mr. SyCip attributes the success of MFIs to the credit discipline that they impress on their clients, as made evident by their high collection rates. Even so, he acknowledges that there remains the challenge of increasing the number of Filipinos with the capability of expanding their microbusinesses and who can be integrated into the mainstream economy.

“Let us not belittle the financial power of the poor. Their absolute number could make a significant improvement in our economy,” he wrote in the 2012 article. “To my mind, the real value of microfinance is that it gives hope to many in the midst of despair.”