Cayetano urges banks to give loans to MSMEs, farmers amid COVID-19 crisis
MANILA, Philippines — House Speaker Alan Peter Cayetano has urged public and private banks to provide loans to small and medium-scale enterprises (MSMEs) and farmers affected by the coronavirus pandemic.
During the online meeting of the House’s Defeat COVID-19 Committee (DCC) on Tuesday afternoon, Cayetano said that the move seeks to “help people but at the same time keep the financial institutions healthy.”
The House Speaker urged Finance Secretary Carlos Dominguez, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, Land Bank president Cecilia Borromeo, and Government Service Insurance System (GSIS) general manager Rolando Macasaet to simplify and shorten banking and lending process and to reduce documentary requirements.
According to Cayetano, many small borrowers “are intimidated by the formal banking system.”
“Even farmers with land titles who apply for small loans are told the application/approval process is very tedious. They are being dissuaded,” Cayetano said.
Borromeo said they have simplified the process and trimmed down requirements for its P15,000 loan to farmers.
“We can strike a good balance of maintaining prudence and the other due diligence processes that we need to undertake before we lend out precious government funds,” Borromeo said.
“One key success factor was that we had a list of beneficiaries identified by Department of Agriculture. So we can do it in the case of small and medium-scale enterprises. We will continue to look for solutions,” she added.
Diokno, meanwhile, said that the BSP has eased the requirement for banks to set aside a portion of their funds as reserves. From this, Diokno said they have freed up P180 billion to P200 billion and have asked banks to lend the money to MSMEs.
For his part, Dominguez said that the government, through the Philippine Export and Foreign Loan Guarantee Corp., would guarantee a large portion of the loans banks extend to MSMEs to boost lending to small borrowers.
A consolidated bill, known as the “Philippine Economic Recovery Act” or PERA, proposed by Albay Representative Joey Salceda and Marikina City Representative Stella Quimbo is currently being finalised within the DCC Technical Working Group.
The bill addresses the implementation of a stimulus package to ensure that the small businesses will be able to recover faster, sustain their businesses and retain their employees after the outbreak.
READ: Solon proposes P370-B stimulus package to address economic fallout of COVID-19
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