Cebu biz leaders laud P19B funding for small enterprise
CCCI GENERAL MEETING/MAY 28, 2016 Mrs. Melanie Ng – 20016 CCCI president. (CDN PHOTO/CHRISTIAN MANINGO)
Business leaders in Cebu lauded the initiative of the Duterte administration to make financing more accessible to micro, small, and medium-scale enterprises (MSME), saying this will help spur the growth of these businesses.
Melanie Ng, Cebu Chamber of Commerce and Industry (CCCI) president, said access to finance has always been a major concern for MSMEs.
“We laud the government for allocating P19 billion through Small Business Corporation (SBC) to fund the financial requirements needed for the growth and development of MSMEs,” she said in a text message.
In a statement earlier this week, Trade Secretary Ramon Lopez announced that the administration has earmarked such amount to fund MSMEs in the Philippines over the next five years.
Through Pondo sa Pagbabago at Pag-asenso (P3), the government will make financing more accessible to small ventures, particularly those in the poorest provinces.
Mandaue Chamber of Commerce and Industry (MCCI) president Glenn Soco, meanwhile, said this will stimulate the growth of MSMEs as this will provide them with much-needed access to capital.
“The key is in the execution, which should be fair, equitable and more accessible for MSMEs to create a good impact on the sector that would generate more opportunities and economic activity,” he said.
For Cebu Business Club (CBC) president Gordon Alan Joseph, this was an excellent initiative as it was timely and should spur inclusive growth in the country.
Pilot areas
“I hope to see this take place in our region as well,” he said, referring to Central Visayas, which covers Cebu, Bohol and Siquijor.
A pilot test of the program will be rolled out this month, covering Mindoro, Sarangani and Leyte, which are among the 30 poorest provinces in the country.
DTI’s Lopez said the P3 was designed to bring down the interest rate for micro enterprises.
The announcement came at the heels of President Rodrigo Duterte’s directive to replace the “5-6” money lending system.
An initial P1 billion was included in the 2017 General Appropriations Act (GAA), which will be managed by SBC, the financing arm of the Department of Trade and Industry (DTI).
Fund delivery to micro enterprises shall be carried out either by wholesale lending to non-bank financial institutions like micro finance institutions (MFIs) and cooperatives, which shall lend the fund to beneficiaries, or by direct lending by SBC, Lopez said.
MSMEs can avail of loans from as low as P5,000 to as high as P300,000 with an annual interest rate of up to 26 percent and with no collateral needed.
Borrowers of first concern are small enterprises in priority and emerging industries, as well as start-up businesses and technology innovators.
Willingness to pay
Cebu biz leaders laud P19B funding for small enterprisesPhilip Tan, MCCI past president, said that while the initiative of the government was great, DTI should be clear with its requirements since it would be a loan.
He said the problem with most micro and small companies is that they lack the willingness to pay the right taxes as well as take up financial management.
Access to financing should be a priority second to making these small businesses competitive first because, according to Tan, MSMEs have a very low survival rate.
Tan said that lenders should be able to distinguish between those that will put the loan to good use and those that are only taking advantage of the government’s generosity.
Ma. Elena Arbon, DTI Cebu provincial director, said her office is still waiting for word on the schedule for the program roll out in Cebu and other provinces other than the pilot areas.
DTI recognizes MSMEs’ major role in driving the Philippine economy, making up 99.6 percent of the country’s registered businesses and employing around 70 percent of its total workforce.
Aside from access to financing, other problems faced by MSMEs in the country today are access to market, productivity and efficiency, and enabling business environment.
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