PHILGUARANTEE TOOPEN FACILITY FORBIGFIRMS

The state-run Philippine Guarantee Corp. (Philguarantee) is offering a facility covering as much as P300 million of bank loans of large businesses badly hit by the pandemic-induced recession.

Philguarantee president and chief executive Alberto E. Pascual told members of the Chamber of Thrift Banks (CTB) last Wednesday that they would 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 fisherfolk as well as housing borrowers.

In a separate interview on Thursday, Pascual said that while loan guarantees had been provided to large enterprises in the past, the new program would be funded by the P5-billion additional capitalization to be poured into Philguarantee by the Bayanihan to Recover as One Law, or Bayanihan 2.

The maximum guarantee cover of P300 million per borrower will allow Philguarantee to cover as many struggling firms as possible, Pascual said.

Philguarantee is already crafting the Bayanihan 2’s implementing guidelines on credit guarantees, which will list the types of eligible companies and sectors.

Pascual 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 health care, education and manufacturing among the sectors it would support financially through guarantees, Pascual said.

He said the facility would not include those in the “negative list” of economic activities that are not given government guarantees.

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.