P180.7-B loans backed by PhilGuarantee in ‘20

STATE-RUN Philippine Guarantee Corp. (PhilGuarantee) guaranteed a total of P180.67 billion in loans in 2020, exceeding its target by 8 percent to help cushion the financial impact of the Covid-19 pandemic.

PhilGuarantee President-CEO Alberto Pascual said in a report to Finance Secretary Carlos G. Dominguez III that the loans the state firm guaranteed last year exceeded its goal of P167.21 billion.

Of this amount, PhilGuarantee provided guarantees to P175.1 million loans of micro, small and medium enterprises (MSMEs) under the MSME Credit Guarantee Program (MCGP).

Pascual added that MCGP, which accounted for P37.73 billion of approved credit guarantee lines, will be extended until September this year to provide continuous support to affected MSMEs via   available access to working capital loans under credit-risk sharing arrangements with accredited banks.

“This was   extended to 34 banks across the country to encourage them to continue lending to small businesses affected by the Covid-induced crisis,” Pascual said.

Under the program, a total of 2,943 new MSME beneficiaries were served and this number is expected to increase this year.

PhilGuarantee made available its SME Credit Guarantee Facility to cover loans of micro and small businesses amounting to P100,000 to P50 million, and its Medium and Large Enterprises Credit Guarantee Facility to support loans above P50 million and up to P300 million.

In 2020, PhilGuarantee opened over P655 billion in credit guarantee lines as the state firm supported MSMEs, manufacturing, housing, agriculture and other key sectors of the economy to help keep businesses afloat in the middle of the pandemic.

Pascual also reported to Dominguez, who sits as PhilGuarantee chairman, that the state-run firm’s strong partnership with 53 banks resulted in P612.81 billion in approved guarantee facilities as of December 2020 to provide these lenders coverage against credit losses from socialized, low- and medium-cost housing loans. Of these, a total of P501.34 billion was availed of by the accredited banks.

Housing loans guaranteed last year by PhilGuarantee amounted to P175.71 billion, surpassing its target of P160.11 billion in 2020. This benefitted over 11,000 new housing loan borrowers last year, increasing its coverage to a total of 138,800 housing borrowers.

Farm sector

As for the agriculture sector, PhilGuarantee guaranteed loans amounting to P4.25 billion in 2020, benefitting around 48,000 small farmers, fisherfolk and other agri-based workers. It approved guarantee lines of P5.14 billion with 41 partner-lending institutions for this purpose.

PhilGuarantee is also the administrator of the Agricultural Guarantee Fund Pool (AGFP), which provides guarantee coverage to banks, cooperatives, farmers/people’s organizations and corporations lending to small farmers and fisherfolk. Its AGFP-guaranteed loans of P4.25 billion is 21.4 percent beyond its goal of P3.5 billion in 2020, Pascual said.

As program manager of the Electric Cooperative-Partial Credit Guarantee Program (ECPCGP), PhilGuarantee also guaranteed in 2020 a total of P625 million in commercial loans of 16 electric cooperative-borrowers to help finance their respective power distribution system upgrades and cut systems losses.

In partnership with local government units (LGUs) and cooperatives, the state-run firm has also supported the Credit Surety Fund which will allow it to invest equity to guarantee cooperative loans.

To further support the government’s Covid-19 response programs, he said PhilGuarantee also implemented a 60-day grace period for the payment of the premium on renewal of guarantee coverage for housing loans worth a total of P7.2 billion.

Likewise, PhilGuarantee provided a 60-day grace period for all existing, current and outstanding loans in the agriculture sector, which benefited 3,527 small farmers and fisherfolk; and a 60-day grace period under its housing programs and those with restructured accounts, which was availed of by 191 borrowers.

The state-run firm also waived penalties amounting to P56.9 million for its housing guarantees covering 51,084 loans in line with the provisions of the Bayanihan to Heal as One Act (Republic Act or RA 11469) and the Bayanihan to Recover as One Act (RA 11494).

Pascual vowed that PhilGuarantee will continue expanding its  credit guarantee support to key economic sectors and essential industries such as export, trading, health, manufacturing, renewable energy and commercial agriculture this year.

PhilGuarantee also aims to speed up its digital transformation and modernization initiatives, dispose of its big-ticket nonperforming assets in 2021, and comply with good governance standards, which include the renewal of its International Organization for Standardization (ISO) 9001 certification.

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