By Elijah Felice Rosales, November 27 2018; Business Mirror
Image Credit to Department of Trade and Industry
The country’s trade chief and a Mindanao legislator on Monday called on Senators to pass the measure that seeks to institutionalize the Pondo sa Pagbabago at Pag-asenso (P3) program.
In his speech at the P3 National Congress in Pasay City, Trade Secretary Ramon M. Lopez said the measure’s passage will provide a boost for micro, small and medium enterprises (MSMEs), and will ensure annual funding for the government’s microfinance scheme.
“If now [the P3 program] has P1 billion every year, in Rep. Peter Unabia’s proposal, the budget will be made P4 billion for every year. Let’s hope that this measure breezes past Congress and the Senate,” Lopez said.
“If every year we have this allocation for the P3 program, we will be able to reach more MSMEs and it will be easier to eradicate the P30-billion industry of ‘5-6’ moneylending,” he added. The P3 program is intended to replace the notorious 5-6 lending scheme viewed by the government as usurious for its 20 percent per day, week or month interest.
As of November, the Small Business Corp., tasked to manage the P3 fund, released some P1.7 billion to over 52,000 MSMEs across 79 provinces. According to Lopez, P68.7 million of this total was issued directly by SB Corp., while the remaining chunk through microfinance conduits.
“The total number of borrowers from the Pondo sa Pagbabago at Pag-asenso is now at 52,000 microenterprises in 79 provinces, almost covering the entire country,” Lopez reported.
Unabia, representative of the First District of Misamis Oriental, vowed to pressure the Senate to pass the bill institutionalizing the P3 program. He said it is vital for the measure to be enacted, as this will secure the microfinance scheme’s continuity even after the Duterte administration.
“If the Senate prioritizes this, if this is passed by Congress, we will be able to ensure the continuity of the program,” Unabia argued. He promised to regularly check with Senate to know the status of the bill.
House Bill 7446, or the P3 bill, was approved in May by the House of Representatives. However, its counterpart measure in the upper chamber—Senate Bill 2017—filed by Sen. Aquilino L. Pimentel III—is pending on second reading.
The measures seek to create the P3 fund, which will be lent out to qualified MSMEs under terms and conditions. The SB Corp., as in present, will be mandated under the proposals to handle the fund delivery either through direct lending to small businesses, or wholesale lending to microfinance conduits, rural banks and credit cooperatives.
MSMEs can borrow P5,000 up to P200,000 depending on its business needs and repayment capacity with no collateral requirement under the P3 program.
Interest rate and services fees do not exceed 2.5 percent monthly. The government expects this microfinance scheme to veer small businesses from onerous moneylending.