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Manila Bulletin devider Business devider Banking & Finance devider Philguarantee, Discovery Capital partner to reduce risk of SME loans

Philguarantee, Discovery Capital partner to reduce risk of SME loans

Published Dec 4, 2025 02:59 pm
In the Philippines, micro, small, and medium enterprises (MSMEs) are the backbone of the economy, creating millions of jobs. But these vital businesses face hurdles from technological gaps to limited access to training.
In the Philippines, micro, small, and medium enterprises (MSMEs) are the backbone of the economy, creating millions of jobs. But these vital businesses face hurdles from technological gaps to limited access to training.
from left, Trizza Anne Marie D. Martino, Discovery CFO; Allan L. Yumul, Discovery CTO; Diosdado C. Salang, Jr., Discovery President & CEO; Alberto E. Pascual, PHILGUARANTEE President & CEO; Celso R. Gutierrez, PHILGUARANTEE Senior Vice President/Group Head, Priority Sectors Guarantee Group; and Luigi Martin L. Martino, Discovery CTO, during the signing of the strategic partnership between Discovery Capital Finance Corporation and PHILGUARANTEE to expand nationwide SME financing. Trizza Anne Marie D. Martino, Discovery CFO; Allan L. Yumul, Discovery CTO; Diosdado C. Salang, Jr., Discovery President & CEO; Alberto E. Pascual, PHILGUARANTEE President & CEO; Celso R. Gutierrez, PHILGUARANTEE Senior Vice President/Group Head, Priority Sectors Guarantee Group; and Luigi Martin L. Martino, Discovery CTO, during the signing of the strategic partnership between Discovery Capital Finance Corporation and PHILGUARANTEE to expand nationwide SME financing.
from left, Trizza Anne Marie D. Martino, Discovery CFO; Allan L. Yumul, Discovery CTO; Diosdado C. Salang, Jr., Discovery President & CEO; Alberto E. Pascual, PHILGUARANTEE President & CEO; Celso R. Gutierrez, PHILGUARANTEE Senior Vice President/Group Head, Priority Sectors Guarantee Group; and Luigi Martin L. Martino, Discovery CTO, during the signing of the strategic partnership between Discovery Capital Finance Corporation and PHILGUARANTEE to expand nationwide SME financing. Trizza Anne Marie D. Martino, Discovery CFO; Allan L. Yumul, Discovery CTO; Diosdado C. Salang, Jr., Discovery President & CEO; Alberto E. Pascual, PHILGUARANTEE President & CEO; Celso R. Gutierrez, PHILGUARANTEE Senior Vice President/Group Head, Priority Sectors Guarantee Group; and Luigi Martin L. Martino, Discovery CTO, during the signing of the strategic partnership between Discovery Capital Finance Corporation and PHILGUARANTEE to expand nationwide SME financing.
State-owned Philippine Guarantee Corp. (PHILGUARANTEE) has partnered with Discovery Capital Finance Corp. (DCFC), one of the fastest-growing financing institutions in the Philippines, to expand credit access for small and medium enterprises (SMEs) across the country.
The strategic alliance leverages PHILGUARANTEE’s mandate as the principal agency for state guarantee finance to share in micro, small, and medium enterprise (MSME) credit risk, allowing DCFC to channel more capital into the SME sector, which is considered as the backbone of the Philippine economy.
The partnership centers on PHILGUARANTEE providing credit guarantees on loans extended by DCFC under its various financing programs.
This critical sovereign guarantee shares the credit risk exposure of DCFC. A key factor that often limits lending to smaller, growing businesses is information asymmetry, which increases the risk in lending.
“This is a transformational partnership for us and, more importantly, for the Filipino entrepreneur. The guarantee from PHILGUARANTEE covers a portion of outstanding principal, protecting us, the financial institution, from credit risk,” said DCFC President and Chief Executive Officer (CEO) Diosdado C. Salang Jr.
He noted that, “This significantly reduces our risk, which in turn allows us to lower our cost of funding for these loans, enabling us to be more competitive and extend credit to a broader segment of the market.”
The direct impact of this partnership will be immediately felt by SMEs, particularly those located in the provinces and in underserved areas where DCFC maintains a strong physical presence.
The core benefit of this partnership is to encourage DCFC in increasing its lending volume to sectors and businesses it might otherwise have considered too risky.
This means that more SMEs—from micro-entrepreneurs to mid-sized firms—will have higher chances to qualify for much-needed working capital and loans crucial for expansion.
With a reduced risk profile owing to PHILGUARANTEE’s partnership, DCFC can now offer more favorable and competitive interest rates on their SME loan products. This reduces the financial burden on small businesses, making their repayment terms more manageable and improving their cash flows.
Meanwhile, by removing financing bottlenecks, the alliance directly supports national development goals. The swift injection of capital into businesses nationwide, supported by DCFC’s wide network, fuels job creation and stimulates local economic activity across Luzon, Visayas, and Mindanao.
This partnership is viewed by both institutions as a strong commitment to financial inclusion, ensuring a level playing field for MSMEs with high-growth potential and never hampered by a lack of capital access.

Related Tags

Philippine Guarantee Corporation Discovery Capital Finance Corporation
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