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Senate urged to act on bill on better MSE loan deals

/ 12:00 AM March 01, 2024


MANILA, Philippines — Bicol Saro party-list Rep. Brian Raymund Yamsuan has appealed to the Senate to act on a bill that seeks to provide easier-to-pay loans to micro and small enterprises (MSEs).


In a statement, Yamsuan said that House Bill (HB) No. 7363 or the proposed Pondo sa Pagbabago at Pagasenso (P3) Act aims to authorize the Department of Trade and Industry (DTI) to extend loans to MSEs “without collateral and through easy-to-pay, low-interest terms.”

The said bill, which was approved by the House of Representatives last March 16, 2023, seeks to protect MSEs from “five-six” money lenders who seek high interests for small loans.

 “The proposed P3 program under this measure will free micro-entrepreneurs from the clutches of  ‘five-six’ money lenders and loan scammers and offer them the opportunity to expand their businesses through easy-to-pay, low-interest credit,” Yamsuan, one of the principal authors of the measure, said on Wednesday.

“If they are able to expand their businesses, then they would have to hire more workers. This means more jobs, more investments and more consumers spending money. The long-term gains under the P3 will make the program a prime driver of our economic growth,” he added.

 According to Yamsuan, MSE owners usually resort to ‘five-six’ lending schemes because of a need for capital and to cover other business costs. 

He and other authors of the bill, however, believe that such schemes only drive MSEs deeper into debt because of excessively high-interest charges and other hidden fees.


Under HB No. 7363, the Small Business Corporation (SBC), DTI’s financing arm, will be tasked to extend no-collateral loans.

The amount that would be allowed will be set and regularly reviewed by the  Micro, Small, and Medium Enterprises Development Council.

The usual loanable amounts offered to MSEs ranged from P5,000 to P200,000 when the DTI was still operating a similar program in the past. 

“With the goal to achieve greater outreach to all provinces and barangays of the country, financial technology-enabled systems and processes can be utilized in the implementation of the P3 program,” the bill states.  (With reports from Barbara Gutierrez, INQUIRER.net intern)


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