Exporters laud passage of credit surety bill
Measures seen to boost the development of micro, small and medium enterprises (MSMEs) in the country are slowly shaping up.
Exporters have welcomed the recent passage of a bill facilitating access to bank credit for MSMEs along with the release of the five-year industry roadmap that would enable e-commerce to contribute 25 percent to the country’s gross domestic product by 2020.
Philippine Exporters Confederation Inc. (Philexport) president Sergio Ortiz-Luis Jr. said Republic Act (RA) 10744 institutionalizing the credit surety fund (CSF) program of the Bangko Sentral ng Pilipinas would provide alternative funding source for small businesses.
The act was passed by the Senate and the House of Representatives on Nov. 26 and Dec. 2 last year and it lapsed into law last Feb. 6 without the signature of President Aquino.
RA 10744 provides for the creation of local government units-partner cooperatives to manage the CSF.
The CSF is designed to provide MSMEs, cooperative and non-government organizations (NGOs) with more inclusive access to bank credit, thereby enhancing their sustainability and growth.
“Such funds shall serve as security for the loans that will be obtained by qualified borrowers from lending banks by way of a surety cover issued by the board of directors of the CSF cooperative, in lieu of hard collaterals,” Philexport said.
According to the group, MSMEs currently account for 99.6 percent of total establishments in the country and contribute 61.2 percent of the Philippines’ total employment and 35.7 percent of total value added.
In line with RA 10744, Ortiz-Luis said the group is hoping the government would grant the P20-billion emergency loans for the MSMEs to be administered by the SB Corp.
Ortiz-Luis said such funds could be sourced from the P62.7-billion conditional cash transfer budget which may not be fully utilized until June 2016.
He said the proposed emergency loans project is expected to increase by 10 to 15 percent the number of jobs created and the number of MSMEs having access to finance.
Meanwhile, exporters also welcomed the release of the Philippine E-Commerce Roadmap (PECR) seen to boost trade and competitive advantage of more MSMEs in the country.
“This is a positive development towards increased competitiveness of exporters, especially MSMEs that will be able to adapt to and adopt the changes. In this context, government and private sector need to work together for capacity building and setting up of the necessary soft and hard infrastructure,” Ortiz-Luis said.
According to Philexport, the PECR targets 100,000 MSMEs and 40 to 50 percent of Internet users doing e-commerce in the next five years as it addresses a number of issues in the e-commerce ecosystem.
The PECR presented recommendations in six key areas namely infrastructure, investment, innovation, intellectual capital, information flow and integration.