Aside from providing financial support for micro, small, and medium enterprises (MSMEs), provincial governors are also calling on the national government to make loans affordable for them.
“We are asking the national government to support to lend to MSMEs at a lower interest rate, kung pwede 1% lang nga pahiramin natin ang MSMEs natin (if possible, we only lend at one percent to MSMEs),” Bohol Gov. Arthur Yap said.
“So ang dami nating kailangang gawin at pag-aralan and we cannot do that kung papahiramin natin sila sa normal 5%, 6%, 8%, 10% interest (We have a lot of things to do and take into consideration, and we cannot do that if we lend them with the normal 5%, 6%, 8%, 10% interest),” Yap added.
Some experts said market rates should be considered when banks adjust to the amount to avoid the risk of heavy losses.
Meanwhile, the Monetary Board approved the amendments to the regulatory capital treatment of exposures to MSMEs which include “temporary reduction in the credit risk weights of loans granted to MSMEs that are current in status” and “assignment of a zero percent risk weight for MSME exposures that are covered by guarantees.”
The BSP has already trimmed policy rates by 125 basis points this year while the Philippine Guarantee Corporation has approved an MSME guarantee credit program of Php 120 billion in working capital with a 50 percent guarantee.
