Source: Philippine Information Agency
Original article available here.
TACLOBAN CITY, PHILIPPINES, April 6 — In answer to President Gloria Macapagal-Arroyo’s call to mitigate the impact of the global financial meltdown on the Filipino people and with the hope of contributing in a concrete and focused way to the poverty alleviation program which is the centerpiece program of the Arroyo Administration, Bangko Sentral ng Pilipinas is promoting a financial environment that will encourage banks to lend to the marginalized sector.
Bangko Sentral believes that by involving itself in microfinance, it is helping the poor help themselves.
Bangko Sentral Governor Amando M. Tetangco, Jr. said, “as long as there remains nearly 40 percent of our population living in poverty, there is an urgent need for microfinance to provide them with opportunities to increase their economic activity, foster their spirit of entrepreneurship, facilitate employment and improve the quality of their lives and that of their community.”
In order to encourage the participation of banks in microfinance, Bangko Sentral formulated guidelines that will implement the provisions of the General Banking Law of 2000 on microfinance operations.
Bangko Sentral also partially lifted the moratorium on the issuance of licenses for opening of new thrift and rural banks and branches in order to accommodate microfinance-oriented banks.
By opening a rediscounting facility, Bangko Sentral enabled to refinance the loan portfolio of microfinance-oriented banks, as contained in circulars 282 and 324.
Furthermore, Bangko Sentral issued Circular 409 which provides the guidelines for the measurement of portfolio-at-risk and provisioning requirements for microfinance loans to ensure prudent and sound microfinance operations by banks.
Circular 505 was issued by Bangko Sentral in order to provide new guidelines for branching, providing further incentives for microfinance-oriented banks and branches to expand their reach all over the country.
Aside from the policy and regulatory aspects, the Bangko Sentral has undertaken significant initiatives for training and capacity-building as well as promotions and advocacy.
The Bangko Sentral established a Microfinance Committee and a Microfinance Unit within the Bank. The Microfinance Committee recommends to the Monetary Board appropriate policies and regulations in support of microfinancing within the banking sector.
The Microfinance Unit provides technical support to the Committee and coordinates relevant activities such as briefings, exposures, trainings, workshops and other advocacy activities to promote sustainable and viable microfinance programs in the Philippines..
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