Philguarantee extends P180B loan guarantees in 2020

Published February 22, 2021, 7:00 AM

by Chino S. Leyco

The Philippine Guarantee Corp. (PhilGuarantee) has extended P180.67 billion only in loan guarantees in 2020 as against the P655 billion credit guarantee lines opened for businesses as economic activities substantially slowed down during the pandemic year.  

In a report to Finance Secretary Carlos G. Dominguez III, Alberto Pascual, PhilGuarantee president and chief executive said that over P655 billion in credit guarantee lines had opened last year for the businesses, but only P180.67 billion in loans were extended guarantees.

Nonetheless, PhilGuarantee noted that the guaranteed loans exceeded its P167.21 billion target by 8 percent, as it broadened its support to micro, small and medium enterprises (MSMEs), manufacturing, housing, agriculture and other key sectors of the economy to help keep businesses afloat amid the coronavirus pandemic.

Pascual said the state firm’s MSME Credit Guarantee Program (MCGP) accounted for P37.73 billion of the approved credit guarantee lines. 

“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. 

Pascual said the program will be extended until September this year to provide continuing support to affected MSMEs via available access to working capital loans under credit-risk sharing arrangements with accredited banks.

A total of 2,943 new MSME beneficiaries were served under this program, which, as of December 2020, provided guarantees to loans totaling P175.1 million. The number of MSME-beneficiaries is expected to increase in January 2021. 

Pascual also said 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. 

A total of P501.34 billion of this guarantee facility was availed by the accredited banks, he said.

With P175.71 billion in guaranteed housing loans, over 11,000 new housing loan borrowers benefited from this facility in 2020, increasing its coverage to a total of 138,800 housing borrowers, Pascual said.  

The amount of guaranteed housing loans was 9.7 percent above PhilGuarantee’s target of P160.11 billion in 2020, he added.

For the agriculture sector, he said PhilGuarantee approved guarantee lines of P5.14 billion with 41 partner-lending institutions, with guaranteed loans amounting to P4.25 billion that benefited around 48,000 small farmers, fisherfolk and other agri-based workers.

PhilGuarantee is 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, said Pascual.