MICROCAPITAL BRIEF: Department of Trade and Industry to Allocate $66.8m for On-Lending via MFIs, Capacity Building for MSMEs in the Philippines

The Philippine Department of Trade and Industry (DTI) reportedly has released its budget proposal for 2013, which includes a PHP 2 billion (USD 47.8 million) incentive fund for microfinance institutions (MFIs) and a PHP 800 million (USD 19 million) capacity-building program for micro-, small and medium-sized enterprises (MSMEs). According to a statement attributed to DTI Undersecretary Ms Merly Cruz, the department aims to encourage MFIs to loan more to MSMEs by also offering MFIs additional funds worth five percent of their capital to be allotted to MSMEs, making a total of PHP 120 billion (USD 2.8 billion) in loans available to MSMEs. DTI reportedly is planning to implement the incentive program for three years or until the end of the current administration, whichever comes sooner.

To implement the capacity building program, DTI will partner with nongovernmental organizations and the private sector to provide business and livelihood training in rural and agricultural areas. The program will target 609 municipalities that were identified as “poor” by the National Anti-Poverty Commission, a government agency of the Philippines.

The 35 Philippine MFIs that reported 2011 data to the US-based nonprofit Microfinance Information Exchange (MIX) held an aggregate loan portfolio of USD 424 million disbursed to approximately 2.1 million borrowers.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

Business World: “P2.8-billion Support for MSMEs Planned,” http://www.bworldonline.com/content.php?section=Economy&title=P2.8-billion-support-for-MSMEs-planned&id=52812

MicroCapital.org story, May 22, 2012, “MICROCAPITAL BRIEF: Online Microfinance Firm Lenddo Receives $8m in Equity to Support Its Lending in The Philippines, Colombia,” https://www.microcapital.org/microcapital-brief-online-microfinance-firm-lenddo-receives-8m-in-equity-to-support-its-lending-in-the-philippines-colombia/

MicroCapital.org story, May 9, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC), BPI Globe BanKO to Develop Sustainable Energy Project for Microfinance Institutions in the Philippines,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-bpi-globe-banko-to-develop-sustainable-energy-project-for-microfinance-institutions-in-the-philippines/

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